Key Takeaways
- ANDHealth awarded AUD $9 million to five digital health startups amid rising capital access concerns.
- Survey indicates 92% of small healthcare businesses plan to seek growth capital, while 86% cite capital access as a top challenge.
- Women’s leadership in the sector shows improvement, yet female-led businesses still face significant barriers in funding.
Awarding Digital Health Startups
ANDHealth has allocated up to AUD $9 million to five Australian digital health startups—Australis Scientific, Corcillum, Earflo, Kraken Coding, and More Good Days. This funding round, part of the ANDHealth+ program, saw a competitive surge with 90 applications, a 65% increase from previous cohorts.
Research accompanying the funding release reveals significant disparities between investment demand and supply. According to the FY2026 Industry Sentiment Survey, 92% of small and medium-sized businesses in digital health intend to raise capital within the next year, while 90% aspire for geographical expansion. However, amidst this growth, 86% ranked capital access as one of their top five challenges, a steep rise from 60% in FY2023.
The digital health sector in Australia has been rapidly growing, with a 55% compound annual growth rate since 2018. The domestic market is estimated to surpass AUD $45 billion by 2033, while the global market could reach USD $946 billion by 2030.
Challenges in Capital Access
The funding shortage is affecting business strategies, with 46% of companies indicating they are seeking capital merely for survival, and others reporting staff reductions and halted expansion plans. A bleak outlook on investor competence exists, as less than 10% feel confident in Australian investors’ abilities to support scaling businesses. Furthermore, economic conditions have amplified these challenges—66% noted that market conditions hinder their capital-raising capabilities.
Some businesses are calling for policy reforms, with 80% advocating for dedicated investment funds in digital health, and 74% supporting public procurement changes to prioritize local innovations.
Bronwyn Le Grice, CEO of ANDHealth, considers these findings alarming, emphasizing the need for improved capital access and procurement practices to allow local technologies to flourish in Australia.
Progress in Gender Diversity
The survey shows a positive trend in leadership diversity: 60% of firms have at least one female founder, an increase from 47% in FY2022. However, female-led companies often face inequities, with smaller capital raises and lower confidence in domestic investor support compared to their male counterparts.
Rachel Yang from Giant Leap highlights a broader issue where women’s predominant roles in healthcare do not translate into equitable access to capital. Similarly, Dr. Elaine Stead points to a systemic failure in the investment ecosystem, where a significant number of founders struggle to secure necessary funding.
As market conditions tighten, the significance of non-dilutive funding programs, such as ANDHealth+ and the R&D Tax Incentive, has grown. Dr. Kath Giles stresses that such funding sources are critical for enabling Australian companies to advance without the need to seek capital abroad prematurely.
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