"2025 saw a welcome surge in healthcare venture funding as investors rushed to back top AI startups. Last December, VCs predicted huge funding rounds for AI scribe startups like Abridge and Ambience Healthcare; indeed, both Abridge and Ambience landed hundreds of millions of dollars in venture funding this year. Investors also said in December 2024 that they anticipated a race for those startups to expand beyond AI health scribing into other product lines, like medical coding and billing."
"With Epic in the mix and tech giants like OpenAI working on their own healthcare AI plays, VCs told Business Insider that they're expecting different profiles of healthcare startups to grab funding next year as companies focus on cost savings, securing patient and provider trust, and ensuring high-quality data. "AI has diffused nicely for passive listening in clinical settings, and administrative simplification," said Dan Mendelson, the CEO of Morgan Health, JPMorgan's healthcare investing arm."
Venture funding for healthcare accelerated in 2025, driven largely by investments in AI startups focused on clinical documentation and administrative tasks. Major AI scribe companies received hundreds of millions of dollars, and investors expected those companies to expand into coding and billing. Competition intensified as large vendors and tech giants developed their own healthcare AI tools. Investors are shifting attention toward startups that deliver measurable cost savings, bolster patient and provider trust, and produce high-quality data. Market watchers anticipate more M&A activity and selective exits in 2026, with continued investment in administrative-focused AI solutions.
Read at Business Insider
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