The capital drought pushing Australia’s digital health sector offshore
Australia’s digital health sector is growing fast — but the companies building the next generation of regulated medical technologies say they are being cut off from the capital they need to survive.
Some of the country’s biggest startup success stories have come from digital health — Eucalyptus, acquired by US giant Hims & Hers earlier this year in a deal worth up to USD1.15 billion ($1.61 billion), and Heidi Health, which Blackbird has described as the fastest-growing company in its portfolio since Canva.
But leaders in the sector say those names distort the reality for most in the sector. Both built unregulated products that could earn revenue from day one. The majority of digital health companies must complete clinical trials before they can sell a single product — and it’s those companies that are being starved of capital.
ANDHealth, which runs Australia’s largest digital health accelerator program, released its FY2026 Industry Sentiment Survey this week, and the findings put numbers to the problem.
Now, 86% of digital and connected health SMEs cite access to capital as a top five challenge, up 26 percentage points from 60% in 2023. More than half rank it as their single biggest challenge. And 46% are raising capital to survive rather than grow while 21% have cut staff.
