The One Healthcare AI Deal That Defined December’s Funding Trends

Stay Updated for Free | Follow us on X

The end of the year tends to quiet things down, and December was no exception for healthcare AI. Without the few mega deals, the funding pool would have looked slim.

Investors were probably more interested in tying up loose ends and focusing on what’s already working than exploring new deals.

I’ll admit, it wasn’t the flashiest month to dig into, but there are a few subtle shifts that could be clues on what could happen in 2025.

Also, if you missed our last month’s report, you can read it all here.

If you’re all caught up, then let’s dig into December and how healthcare AI spent its holiday season!

1. Overview

December wrapped up the year with $883.5 million raised across 36 startups. A seemingly large amount but really driven only by a few standout deals that defined the month’s direction.

SandboxAQ led with $300 million to expand its Large Quantitative Models (LQMs) and AI tools in biopharma and medical devices. This accounted for over a third of the total funding this month.

Cleerly secured $106 million for their AI-powered heart disease diagnostics, while Precision Neuroscience raised $102 million for its brain implant technology, designed to improve accessibility for individuals with severe paralysis.

Economic conditions may have played a role in shaping these decisions. Stabilizing inflation and steady U.S. interest rates created an environment where there could be large, more risky investments.

Meanwhile, geopolitical factors, such as the U.S.-China trade tensions and restrictions on advanced AI technologies, kept much of the funding concentrated within the U.S.

Policy discussions are becoming more relevant. The Forbes Healthcare Summit highlighted AI’s potential to reduce costs and improve care, while the NHS AI Conference centered on efficiency and accessibility in national healthcare systems.

These events steered attention toward practical solutions addressing immediate challenges in healthcare.

2. Funding Breakdown by Application

There was a clear split: some categories remained steady, while others relied on a single big raise to carry the numbers. It wasn’t exactly the most balanced month with the top three startups accounting for more than half of this month’s total funds raised.

AI-Enhanced Scientific Research: SandboxAQ’s $300 million overshadowed this category, accounting for nearly all of the $318 million. Without it, the numbers would have looked pretty bleak. November, by comparison, felt more evenly distributed with funding spread across multiple startups.

Diagnostics and Treatment Planning: Diagnostics continued to do well, bringing in $239 million across nine startups. But similar to the AI-Enhanced Scientific Research sector, we see major outliers as the top two fund raiser accounted for the majority of the capital raised.

Cleerly’s $106 million round made up almost half of this total, while Precision Neuroscience’s $102 million makes up nearly the other half at $208 million out of the total of $239 million for this category.

Patient Monitoring and Care Technologies: At $102 million across eight startups, patient monitoring remained consistent but dipped from November’s $164 million.

This decline could reflect a cooling off from the pandemic-era rush toward remote monitoring and wearables. Even so, the steady flow of investment shows this area is still a priority for addressing chronic disease management and reducing physician burnout.

Administrative Efficiency and Drug Discovery: Administrative tools picked up $158 million, slightly outperforming November’s totals, as investors kept backing solutions to streamline healthcare operations.

Drug discovery, however, took a hard hit, dropping from $139 million in November to just $66 million in December. It’s likely an outlier rather than a trend as drug discovery has always received major funding, even before the AI era.

Surgical Assistance: Still Silent. Surgical assistance saw no funding for the second month in a row. With its high costs and narrow applicability, it seems to be losing ground to broader-impact areas like diagnostics and patient monitoring. For now, this category appears to be on the back burner. I think this will change in 2025!

3. Funding Breakdown by Stage

December biased heavily toward mature startups, with Series C rounds pulling in the largest share of funding. Early-stage deals stayed active, but mid-stage companies seemed to have hit a funding wall for this month.

Series C Takes the Spotlight: Most of the money is pooled around Series C, with investors focusing on startups that have proven their value and are ready to scale aggressively. Again, SandboxAQ’s $300 million raise is most likely the cause for this skew in data.

Early-Stage Steady but Selective: Seed and Series A rounds funded the largest number of startups, especially in diagnostics and patient monitoring. That said, the dollars raised were noticeably smaller compared to November.

It’s hard to say if this reflects caution or just holiday timing, with startups delaying their funding rounds until the new year. Either way, early-stage innovation isn’t going anywhere, but the bar for investment might be getting higher.

Series B Stuck in the Middle: Series B funding took a significant hit in December. It’s the awkward middle stage, where startups need to prove scalability but haven’t yet reached the stability of later-stage players.

Investors seem to be gravitating toward the extremes this month. Either the risky ideas of early-stage companies or the reliability of mature startups. This gap does make me wonder if some AI technologies are struggling to scale or if investors are just being extra cautious in this market.

4. Geographical Trends

As with any other month, the United States continues to be number one. But dig a little deeper, and you’ll notice a few shifts worth paying attention to.

United States Still Leads the Pack: Unsurprisingly, the U.S. claimed 90.1% of the $883.5 million raised, driven by a strong venture capital ecosystem. Even without SandboxAQ’s $300 million raise, the U.S. would still hold the majority share.

However, I feel that this level of centralization does raise concerns about whether innovation in healthcare AI is becoming too U.S.-centric, and could potentially stifle global collaboration.

Canada and France Step Up: Canada stood at 4.6% of the total, boosted by growing health tech hubs like Toronto and Montreal. France wasn’t far behind, contributing 2.4% as its national AI strategy continues to push for more healthcare applications.

These aren’t big numbers, but they could hint at a slow diversification of funding, with smaller players starting to carve out their own niches.

Where’s Everyone Else? The rest of the world was almost silent this month. Europe, outside of France, barely registered, and Asia’s presence was virtually non-existent. Part of this could be economic caution—investors seem to prefer the relative stability of U.S. and Canadian markets.

I do want to point out that funding activity in places like Asia simply isn’t making it onto our tracking radar. Healthcare AI in regions such as China, for example, is notoriously difficult to track due to limited public data, so there’s a good chance we’re missing part of the story.

5. Final Thoughts

December’s funding trend is as much about timing as it is about strategy. The holiday season likely played its part; this month isn’t exactly prime deal-making territory.

But this wasn’t just about the festive season. The $883.5 million raised was solid, yet heavily reliant on SandboxAQ’s $300 million. Without it, December would look a lot more subdued.

Still, there are signs of progress. Canada and France’s modest contributions hinted at a slow but steady shift toward a more globally distributed funding landscape.

Looking ahead, it’s likely we’ll see more investors prioritizing proven solutions while keeping a close eye on emerging players, waiting for clearer results before diving in deeper.

The real question for 2025 is whether new regions and sectors will rise to share the spotlight or if healthcare AI will stay as concentrated as it is now.

Hope you enjoyed this month’s review, see you back next month!