ANDHealth News

The comprehensive report, The Rising Giant: Creating a New Economic and Health Future for Australia, shows that Australia is now home to 1,005 digital and connected health companies, with the sector growing at a compound annual growth rate (CAGR) of 52% since 2019.

“The growth we're witnessing in Australia's digital health sector is nothing short of remarkable,” said Bronwyn Le Grice, Chief Executive Officer of ANDHealth.

“This exponential expansion demonstrates that Australia has firmly established itself as a significant player in the global digital health landscape, with the potential to become a world-leading hub for health innovation.

“The pandemic gave Australians, both patients and health care providers, a reason to use digital and connected heath solutions, and since then we’ve seen the arrival of AI in healthcare, the improvement of apps for self-management and connected data and systems, which have turned concepts from the future into reality,” Ms Le Grice said.

The report highlights a significant maturation of the sector, with the proportion of mid to late-stage companies outpacing growth in early-stage ventures. Early-stage companies now represent 55% of all digital health companies, down from 73% in 2020, while mid-stage companies have increased to 33% from 20%. Companies in the later stages of market uptake and exit have grown from 7% to 12%.

“While we celebrate this impressive maturation of our digital health ecosystem, we must acknowledge that 88% of companies are still in the trenches of commercialisation,” Ms Le Grice noted.

“This underscores the critical need for continued support and development initiatives, including access to private and public capital sources, to help these promising companies reach their full potential and deliver both health and economic benefits to Australia.

“On the surface, financial investment in the sector has also increased with those companies that have raised capital now reaching $440,000, up 58% from two years ago. It is worth noting that this reflects an increase in larger amounts raised for more mature companies, meaning it is still very difficult for early-stage companies to secure critical capital injections,” Ms Le Grice said.

The report also reveals significant regional growth variations. South Australia led percentage growth since 2022 with a 125% increase, while Victoria experienced 106% growth, adding the highest absolute number with 217 new companies. New South Wales grew by 79% to be home to 326 companies, while Queensland is now home to 103 companies and Western Australia 95.

“These figures tell a compelling story of a sector that is rapidly evolving and maturing,” added Le Grice. “However, to fully capitalise on this momentum, we need sustained investment, clearer reimbursement pathways, and dedicated programs to ensure these innovative technologies make it to market and deliver on their promise to transform healthcare delivery and outcomes.”

The Rising Giant report follows ANDHealth's previous industry analyses, including The Awakening Giant (2022) and The Sleeping Giant (2020), which have tracked this emerging sector's remarkable trajectory.