Galen Growth is a global leader in digital health actionable market intelligence, founded in 2016 by Julien de Salaberry to solve the challenge of biased or unreliable data hindering innovation. Through trusted data, AI-driven tools and domain expertise, Galen Growth helps HealthTech stakeholders – including startup ventures, Pharma and investors – navigate and accelerate meaningful change across the global digital health landscape. This is Galen Growth’s summary of the first half of 2025 for the European HealthTech sector…
The first half of 2025 has marked a turning point for global digital health – and Europe is stealing the spotlight. While U.S. funding slumped to a five-year low, Europe’s share of global investment surged to a record 26%, cementing its role as a rising powerhouse in health innovation.
This shift isn’t about hype anymore. Investors are demanding results, and European ventures are delivering.
Funding restructured: From early bets to mega deals
Europe saw $3.4 billion invested across 182 deals in the first half of 2025, a 52% year-over-year increase. More importantly, capital is shifting toward scale-ups – late-stage ventures experienced a 4.7x jump in deal value compared to last year. That appetite for maturity fueled seven mega deals, representing over half of Europe’s funding value.
In short, the region has broken away from dependence on government grants, finding its footing in robust private investment.
AI takes center stage
Artificial intelligence continues to dominate healthcare innovation in Europe. AI-powered ventures drew 65% of total funding, or $2.3 billion, in just six months. The majority of that flowed into research solutions (40%) and medical diagnostics (23%), underscoring investor confidence in AI’s ability to transform drug discovery and disease detection.
Top AI-driven clusters – including Research Solutions, Health Management Solutions, and Medical Diagnostics – captured 51% of all funding, indicating where the real momentum lies.
Partnerships: Quality over quantity
Partnerships have slowed, with 35% fewer in Q2 compared to Q1. However, this isn’t a sign of weakness – it’s a strategic move. Corporations and investors are now prioritizing focus and efficiency over “spray and pray” experiments. Medical diagnostics, research solutions, and patient solutions still account for nearly half of all collaborations, reflecting their central role in healthcare transformation.
Therapeutic hotspots: Oncology still leads
Oncology remains the top-funded therapeutic area in Europe, attracting $515 million in the first half of 2025 – a 66% increase year-over-year. Cardiovascular diseases and dermatology followed closely, while geriatrics experienced explosive growth, thanks to a $148 million mega deal for the home healthcare venture Cera.
The bigger picture
Europe’s digital health ecosystem is maturing fast. With 3,537 active ventures (growing at a 7% CAGR, outpacing global averages), the region is now home to nearly one-third of the world’s digital health startups. Notably, 42% of European ventures show strong clinical evidence, setting Europe apart in a sector where validation is everything.
What’s next?
Looking ahead to the second half of 2025, the winners will be those who use venture capital strategically – deploying capital not just to scale, but to prove real-world impact and cost savings. AI will remain the backbone, but ventures with strong evidence and operational efficiency will capture the attention of investors.
Europe isn’t just catching up – it’s setting the pace.
To read the full report, click here.
Galen Growth is a supporting partner of the DayOne Accelerator for the third consecutive year.
