According to a recent report by Pitchbook, the healthcare sector's portion of global private equity and venture capital deals is expected to continue decreasing in 2024. After reaching a peak in 2020, healthcare's share of private equity deals fell to 10.8% in 2023, and its share of venture capital deals dropped from 18.4% in 2020 to 16.5% in 2023. The decline is attributed to the ongoing economic impact of the pandemic rather than a lack of innovation in the healthcare industry.

Generative AI has garnered significant investor interest in 2023, particularly in clinical documentation and medical imaging interpretation. The trend is expected to persist in 2024, with a shift towards companies focusing on generative AI products improving care coordination and addressing employee queries about benefits. The report emphasizes the suitability of large language models for tasks such as appointment scheduling and summarizing provider information.

Surgical robotics has been a lucrative area for investors in 2023, with over $860 million raised in venture capital. Pitchbook analysts anticipate increased funding for surgical robotics startups in 2024 due to a growing demand for soft tissue procedures among the aging population, emerging opportunities in untapped sectors, and the attractiveness of robotic solutions in addressing healthcare workforce and burnout issues.

While there was an IPO freeze in the digital health space in 2023, the report predicts a thaw in 2024, with at least three digital health companies expected to go public. However, late-stage digital startups may face challenges, including a limited number of acquirers, low investor demand for unprofitable IPOs, and economic headwinds. The report cautions that even with predicted declines in interest rates, a quick fix for significant deal flow and IPOs is unlikely.