Digital health is red hot

The third quarter has just slipped into history, but already investment in digital health companies has blasted past last year’s 12-month numbers. The latest report from venture fund Rock Health is decidedly upbeat, a trend mirrored by Startup Health Insights. Per Rock Health, there’s a steady climb in venture dollars invested in the industry ($6.8 billion through September compared to $5.7 billion last year), and the average deal size is ballooning ($23.6 million this year vs. $16.4 million for all of last year). The biggest deals: Butterfly Network ($250 million), American Well ($291 million), 23andMe ($300 million), and Peloton Interactive($550 million).

Competition from Amazon’s PillPack deal, Apple’s afib-sensing watch, and Google’s newly health-minded Nest could disrupt the sector, Rock Health says. Or it could “stoke demand and educate consumers, expanding the market for all players.” The only downside? The pace of exits — acquisitions or IPOs — is “sluggish.” Wait til next year.