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GSR Ventures Survey: Generative AI Shaking Up Digital Health Investors’ Funding Strategies and Industry Outlooks

GSR-Ventures

Digital health investors say generative AI, oncology care and the challenges posed by clinician shortages are transforming their startup funding strategies and investment outlooks for the healthcare industry, according to the results of an online survey from Menlo Park, CA-based early-stage digital health investment firm GSR Ventures.

The firm invited its investment community to participate in an online poll in September 2023, garnering responses from more than 40 participants from some of the world’s leading firms. The online poll asked investors about topics ranging from the volume and valuations of deals this year compared to 2022 as well as industry opportunities and the sectors of most and least opportunity for startups.

Notable poll results include:

  • Nearly two-thirds (62.5%) of investors expect to make the same number or more tech investments for the remainder of 2023 compared to 2022.
  • Most investor valuation expectations for seed stage, Series A and Series B companies decreased by 20% or more compared to 2022 – with the vast majority expecting lower valuations to continue for the remainder of 2023.
  • Nearly 9 out of 10 (87%) said generative AI solutions have influenced their investment strategies.
  • The oncology specialty holds the most promise for startups, according to 55% of investors, followed by cardiovascular care (37.5%). Nearly one-third (31%) of investors say ophthalmology offers the least opportunity.
  • Half of investors (50%) said the provider shortage and burnout crisis presents the biggest problem-solving opportunity for startup companies, followed by changing reimbursement models (26.3%).

Startup company valuation expectations among backers, however, are significantly lower than in 2022.

Founded in 2004, GSR Ventures is an early-stage digital health investment firm with over $3.5 billion in AUM, investing in digital health companies that leverage emerging technology to drive improvements in efficiency and effectiveness – transforming the healthcare landscape. The GSR portfolio includes Medable, Osso VR, Deep 6 AI, Kinsa, Alpha, and Artisight.

VCWire

14/11/2023