Israel is becoming a hotbed of digital health activity: There were a total of 537 digital health companies in 2018 — up from 327 in 2014:
The bigger picture:
Several trends suggest Israel will emerge as a major player in the international digital health scene — and may pull capital away from the US. US investors are flocking to Israeli digital health startups. Forty-seven US investors — 67% of Israel's foreign investors — gave funding to Israeli digital health companies in 2018. And Israel's digital health industry relies heavily on foreign investment, with 69 of 124 investors coming from across country lines.
But US digital health startups might struggle to attract foreign investment following the government's recent regulatory crackdown. Israel's governmentits dedication to advancing the country's development of AI solutions and has pushed for efforts to drive and incentivize investments in the emerging field, which will likely continue to catapult the country's AI innovation forward.
And AI healthcare startups are attracting the lion's share of digital funding in Israel — but the same's not true in the US. AI-based digital health companies far outshined other digital health startups in funding in 2018, but AI healthcare companies in the US brought in only 25% of the capital in the sector, compared with Israel's 85%.
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