Generative AI is set to revolutionize healthcare through significant advancements in efficiency, precision, and patient outcomes. Despite the overall healthcare startup funding dropping by 65% from January 2022 to June 2024, investments in generative AI healthcare startups have increased from $81 million to $439 million during the same period. This reflects the strategic focus and widespread adoption of generative AI by healthcare companies, says GlobalData, a leading data and analytics company.
Manish Dixit, Practice Head for Disruptive Tech at GlobalData, says: “In 2024, there is a significant increase in venture capital (VC) investments and strategic partnerships focused on generative AI. This surge is driven by the technology's potential to revolutionize healthcare operations, enhance precision in diagnostics, and improve patient outcomes. AI-assisted decision-making is becoming a cornerstone for healthcare companies aiming to reduce operational costs and optimize their services.”
Prathyusha Paruchuri, Senior Disruptive Tech Analyst at GlobalData, adds: “Startups are leveraging generative AI to interpret vast amounts of medical data, reduce paperwork, and optimize AI-driven workflows to further advance in their fields. Companies like DeepCure, Automera, BeeKeeperAI, Alaffia Health, and InpharmD are addressing diverse healthcare challenges, with funding ranging from $6.05 million to $24.6 million in 2024, underscoring their innovative solutions and market potential.”
An analysis of GlobalData’s Deals Database reveals that during the first half (H1) of 2024, healthcare sector's VC deals in the generative AI theme stood at a total value of $444.7 million.
Some of the notable VC funding deals during this period include: $150 million fund raised by Kore.ai to continue the advancement of AI platform, $70 million raised by Ambience Healthcare to grow both its operations and business clientele, and $60 million capital secured by Omniscient Neurotechnology (o8t) to increase US market share and advance product development efforts.
Non-VC deals during the review period included a $1.7 billion partnership agreement between Isomorphic Labs and Eli Lilly to advance drug design approaches. Another notable partnership was between VantAI and Bristol Myers Squibb, valued at $674.0 million, to expand therapeutic programs. Additionally, Stemline Therapeutics and Insilico Medicine entered a $512.0 million licensing agreement to develop AI-powered treatments for hormone-sensitive cancers and other oncology indications
Paruchuri concludes: “Even though healthcare companies are facing funding squeeze, investments in generative AI are an exception. The technology has a transformative impact on diagnostics, patient engagement, and remote care. However, concerns about its ability to handle emergencies and its finite knowledge base highlight the need for cautious and regulated adoption.”
Note: Historic data may change in case some deals get added to previous months because of a delay in the disclosure of information in the public domain.
