Healthcare venture funding rebounded in 2025 on the back of large AI rounds, but investors expect the spotlight to shift in 2026. After a year dominated by AI scribe startups and administrative automation tools, venture capitalists say the next wave of funding will favor companies that can prove cost savings, data quality, and decision transparency. Rather than backing “black box” models, investors are signaling interest in what some describe as “glass box” platforms—AI systems that document how decisions are made and create auditable trails for providers, payers, and regulators. At the same time, insurers are expected to step up their own AI investments, contracting with specialized platforms to counter provider-side gains in coding and revenue capture.
Exit activity is also likely to evolve. While two digital health companies went public in 2025, most investors aren’t forecasting a flood of healthcare IPOs next year. Instead, many anticipate a more active M&A environment, particularly from private equity firms and strategic buyers seeking AI assets to integrate into existing healthcare platforms. Lower interest rates and pent-up demand for liquidity could drive dealmaking, even if public markets remain selective. The result may be a year defined less by splashy IPO debuts and more by targeted acquisitions, as capital shifts toward infrastructure that underpins AI governance, cost containment, and scalable tech-enabled services.
