Australia’s digital and connected health sector is facing a critical funding shortfall, according to new data released by ANDHealth, the nation’s health commercialisation engine. Despite the industry’s rapid growth — projected to surpass A$45 billion by 2033 — access to capital remains a major barrier for startups seeking to scale.
ANDHealth’s FY2026 Industry Sentiment Survey found that 92 percent of digital health SMEs plan to raise growth capital within the next year, yet 86 percent cite funding access as one of their top challenges. The organisation’s ANDHealth+ program saw a record 65 percent increase in applications, with $9 million awarded to five standout startups: Australis Scientific, Corcillum, Earflo, Kraken Coding, and More Good Days.
The report highlights that while the sector has grown at a 55 percent compound annual rate since 2018, many companies are struggling to secure investment. Over half of respondents ranked capital access as their single biggest challenge, forcing some to cut staff or pause expansion plans.
Industry leaders, including Bronwyn Le Grice, CEO of ANDHealth, and Dr Elaine Stead of Main Sequence Ventures, called for dedicated digital health investment funds and procurement reforms to prioritise local innovation. They warned that without structural changes, Australia risks losing talent and breakthroughs to better‑funded global markets.
The survey also revealed encouraging progress in leadership diversity, with 60 percent of companies reporting at least one female founder. However, women‑led firms still face lower investor confidence and smaller funding rounds.
ANDHealth emphasised that the funding bottleneck extends beyond startups — it affects patients nationwide. Digital health technologies can improve remote care, reduce hospital strain, and enhance outcomes for rural communities. The organisation is urging a national response to mobilise institutional capital and create a reimbursement framework tailored to digital health innovation.
