Black Book's latest survey, conducted in Q3 2024, offers an in-depth look at the shifting priorities and trends in healthcare IT investment as we head into 2025.

With insights from over 1,160 professionals in venture capital, private equity, and healthcare banking, the report highlights the technologies attracting attention and those that are falling out of favor.

For over a decade, Black Book has been gathering data from VCs, PEs, and bankers, focusing on the viability, creativity, and growth potential of healthcare IT startups. With more than 15,000 industry experts contributing to date, the 2025 survey continues this tradition, revealing key insights into where the industry is headed.

What’s Not Hot

As the landscape evolves, 69% of venture capitalists are now prioritizing scalable innovations that promise a clear return on investment. According to Doug Brown, President of Black Book, “Healthcare startups must demonstrate that their solutions can seamlessly integrate into existing healthcare systems without causing disruptions.” The current market demands practical applications and tangible results, leading to fewer deals but at higher values, signaling a more selective approach among investors.

While early-stage investments, particularly in AI and digital health, continue to attract interest, VCs are now focusing on sustainable business models with proven ROI. Investor confidence in unproven AI solutions is waning, with 71% of respondents expressing skepticism toward technologies that lack clear clinical outcomes or cost-saving potential.

Key Areas Losing Investor Interest in 2025:

• Legacy EHR Systems: A staggering 97% of respondents reported declining interest in traditional EHR systems that fail to innovate, especially those lacking interoperability or advanced data analytics.

• Standalone Health Apps: Apps that do not integrate into the broader healthcare ecosystem are falling out of favor, with 88% of respondents citing concerns over revenue generation and scalability.

• Untested Digital Health Solutions: Investors are increasingly wary of digital health startups that cannot demonstrate tangible outcomes or scalability. This trend is particularly evident in AI-driven diagnostic tools, which 79% of investors view as high-risk due to the need for extensive validation, regulatory approval, and clinical integration challenges.

• Payer Blockchain Technology: While blockchain holds promise for enhancing data security and patient privacy, 85% of respondents indicated a low adoption rate among healthcare payers due to regulatory concerns and integration difficulties.

• AI for Hospital Clinical Decision Support: Despite AI’s potential, 81% of investors remain cautious about solutions that have yet to overcome regulatory hurdles, integration challenges, and liability concerns.

What’s Hot

Despite these challenges, there is a growing demand for digital health solutions that demonstrate measurable outcomes. According to 81% of investors, the focus is shifting towards technologies that can provide strong evidence of their impact on patient care. Startups that can prove their effectiveness in improving healthcare outcomes are more likely to secure funding.

In 2025, 68% of VCs are expected to favor startups with strong partnerships with established healthcare providers or technology companies. These collaborations are seen as essential for scaling solutions and achieving rapid market penetration.

Top Investment Areas for 2025:

• Artificial Intelligence (AI) and Machine Learning (ML): 83% of respondents plan to prioritize investments in AI and ML applications that drive automation, data analytics, and predictive modeling, particularly in finance/revenue cycle management and cybersecurity.

• Cloud Computing and Infrastructure: Scalable cloud solutions that enhance data storage, processing, and remote work capabilities are attracting 21% of VC interest.

• Cybersecurity: With the increasing threat of digital attacks, 19% of investors are looking to fund innovative cybersecurity solutions that protect data across healthcare providers and payers.

• Edge Computing: As medical IoT devices proliferate, 13% of VCs are interested in edge computing solutions that process data closer to the source, reducing latency and bandwidth usage.

• Quantum Computing: Although still in its infancy, 8% of respondents see potential in quantum computing for revolutionizing areas like cryptography and complex problem-solving.

What’s Safe

Healthcare IT investments deemed safe for 2025 include non-routine telehealth, remote patient monitoring, proven AI-based clinical decision support, and interoperability platforms. These areas address critical needs in healthcare and offer clear paths to scalability and ROI, making them low-risk investments according to 76% of respondents.