Digital health startups are shattering funding records, but is the market overheating? 

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Venture-capital investments in digital health are soaring to new heights and helping startups lock down on growth, but some experts are concerned that the market may be overheating, according to a July 15 Wall Street Journal report. 

Digital health startups raised $14.7 billion in the first six months of 2021, already surpassing the $14.6 billion raised in all of 2020, according to digital health venture fund Rock Health. 

Doximity, a San Francisco-based health IT and telehealth networking platform often referred to as "LinkedIn for doctors," went public in June and now has a market capitalization around $8.8 billion, according to the report. Recent successes like Doximity have encouraged investment, as investors are increasingly interested in companies tackling tech problems in healthcare, David Samuels, CFO of healthcare software company DrFirst, told the Journal. 

While investors increase deal-making, one concern arising is that entrepreneurs feel pressure to raise more capital than they need, Larry Cheng, a managing partner with venture firm Volition Capital, told the publication. 

It also isn't completely clear whether companies that have benefited from the rising demand of healthcare tech during the pandemic will be able to sustain their growth once the crisis subsides, Mr. Cheng said.

 

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