ANDHealth News

According to ANDHealth’s FY2026 Industry Sentiment Survey, 92% of digital and connected health SMEs plan to raise growth capital in the next 12 months, and 90% want to expand geographically in the same timeframe (up from 49% in FY2023).

In Australia, digital health is also one of the fastest-growing health technology segments, growing at a 55% compound annual growth rate since 2018 and nearly doubling in size in the past three years.

Globally, the industry is projected to reach US$946 billion by 2030.

Yet despite this high growth potential and clear demand for capital, 86% of SMEs in the Australian sector cited “access to capital” as one of their top five key challenges, up 26 percentage points from 60% in ANDHealth’s FY2023 survey.

The majority (51%) also ranked access to capital as their single biggest challenge, highlighting the level of funding urgency now facing the industry.
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Specialist capital and policy settings fuelling bottleneck

In searching for a solution, 80% called for digital and connected health-specific investment funds to attract more capital into the sector, with 39% expressing uncertainty about whether domestic investors could support scaling digital health companies.

Participants also called for reforms to public sector procurement to prioritise local innovation and accelerate growth (74%) and pointed to a need for a dedicated health technology assessment and reimbursement framework (66%).

The findings mirror the federal government’s Ambitious Australia: Strategic Examination of R&D (SERD) report, which identified “health and medical” innovation and “technology” as two of the six key national innovation priorities, calling for stronger capital availability and government procurement settings to prioritise Australian research and development.
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Leadership diversity improving as sector matures

Positively, the survey also found signs of improving leadership diversity across the sector.

Sixty percent of companies reported one or more female founders (up from 47% in FY2022), and 39% reported a female CEO or managing director (up from 33% in FY2022).

However, the survey also found that women-led companies are typically smaller, have raised less median capital, and report lower confidence in local investor support than their male-led peers.
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Companies preserving runway over growth

Capital scarcity was also forcing many companies into defensive decisions, rather than growth strategies, despite the sector’s maturity.

46% were raising capital as a survival measure, 21% had laid off staff, and 17% had paused market expansion plans. Less than 10% of respondents believe Australian investors have the knowledge and skills to support them.

The proportion of companies reportin that current economic conditions have negatively impacted their ability to raise capital has more than doubled since FY2022, rising from 32% to 66%, while 49% said the same conditions were affecting their ability to secure government funding.
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Why this matters for patients

ANDHealth warned the capital bottleneck is a broader health system issue, because digital and connected health technologies can expand access to care, support remote patient monitoring, reduce pressure on hospitals, and improve health and care delivery for rural and regional patients.

ANDHealth is now calling for a coordinated national response, including dedicated digital health investment funds, greater mobilisation of institutional capital, local procurement reforms, and a fit-for-purpose reimbursement framework for digital and connected health technologies.
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Bronwyn Le Grice, CEO and Managing Director of ANDHealth, said: “This is an alarming signal for a sector that has the ability to transform Australia’s health and care sector to drive patient outcomes and economic benefits.

“Australia has the foundations of an internationally competitive digital and connected health sector, but too many companies are being held back by the settings that determine whether local innovation can reach patients and scale.

“The ‘if not, why not’ procurement principle recommended in the SERD report is one example of the reform needed to give Australian-developed technologies a fair opportunity to be adopted locally.

“But procurement is only one part of the bottleneck. Companies also need access to capital that understands the complex pathway from clinical evidence to commercial scale, and reimbursement frameworks that reflect how health and care delivery is changing.”

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