Funding is back – selectively: What investors want in leaders

With funding rebounding, Odgers’ Chris Hamilton and Mike Drew explain what investors are looking for in health tech leadership teams

After a sharp downturn, funding in digital health is beginning to rebound.

According to Galen Growth, global digital health venture funding climbed back to $25.1 billion in 2024, a 5.5 per cent year-over-year increase after two years of decline.

The momentum has carried into 2025.

Rock Health reports that in the first quarter alone, digital health startups raised $3 billion across 122 deals, up significantly from $1.8 billion in Q4 2024.

This rebound is cautious and selective.

Investors are directing capital primarily to AI-driven ventures and business models that demonstrate tangible value.

Innovation alone no longer secures investment.

Today, leadership quality is the factor most likely to determine whether a company attracts or misses out on funding.

The New Investor Lens in Digital Health

For much of the last decade, digital health was fuelled by growth capital that rewarded rapid expansion and bold visions.

The market correction shifted investor priorities.

The emphasis is no longer on scaling at any cost but on sustainability, profitability, and clinical credibility.

Investors are now evaluating companies through a far sharper lens, with leadership teams under particular scrutiny.

A strong executive bench has become a proxy for resilience and long-term value creation.

Operators Who Can Scale Profitably

Investors are looking for leaders who know how to translate innovation into sustainable growth.

The ability to build operational discipline, manage costs, and scale without sacrificing quality is now non-negotiable.

Leaders who combine commercial acumen with strategic foresight stand out in an environment where efficiency matters as much as vision.

Navigators of Complex Reimbursement Landscapes

Reimbursement has emerged as a decisive battleground for digital health.

No longer satisfied with pilot programmes or potential savings, investors want clear pathways to revenue.

This requires leaders who understand payer dynamics, who can interpret evolving reimbursement codes, and who are able to integrate these into viable business strategies.

The leaders who thrive are those who can bridge the worlds of policy, providers, and product.

Competitors Against the Giants

Every digital health start-up must contend with entrenched incumbents such as EHR providers and established health systems.

Winning in this environment requires more than technology.

Leaders must be politically aware, commercially resilient, and capable of navigating long enterprise sales cycles while differentiating against much larger competitors.

The ability to carve out market share in the shadow of giants is increasingly viewed as a test of leadership strength.

Leadership as a Signal of Investor Confidence

For investors, leadership is now the clearest signal of future value.

Many are willing to back companies with less polished technology if the leadership team demonstrates the ability to execute.

A strong executive bench reduces risk, builds credibility, and reassures investors that the company can withstand inevitable challenges.

Boards that prioritise leadership hiring at every stage of growth send a powerful message that they are building for durability rather than short-term wins.

Building the Leadership Bench of the Future

The companies that continue to attract capital will be those that build leadership capacity as deliberately as they build products.

Succession planning, diverse executive teams, and alignment between CEOs, CFOs, and commercial leaders are no longer optional.

Investors want to see cohesive leadership units capable of guiding companies through complex markets.

Boards are increasingly turning to executive search partners and external advisors to ensure they have the right mix of skills and experience to inspire confidence in the investment community.

Leadership as the Differentiator

Funding in digital health is back, but it is selective and disciplined.

Investors are focusing on companies that can demonstrate commercial viability, real-world outcomes, and leadership teams capable of delivering both.

In the next wave of digital health growth, leadership will not be viewed as a support function.

It will be the decisive factor in determining which companies thrive and which are left behind.