Moving digital health from wellness to clinical reality | redalpine x Sifted European Dynamism report

redalpine and Sifted recently published the European Dynamism report- a deep dive into six sectors where Europe is accelerating fast and where we believe the next wave of global leaders will emerge. Over the coming weeks, we're going deeper on each one: the thesis, why we believe Europe has a structural advantage, and the top startups to watch. In this edition: Digital health.

Digital health is no longer about keeping people healthy. It’s about transforming medical care.

The era of step counters and meditation apps is fading. In its place: medical-grade consumer technology and AI-powered tools that connect directly into healthcare systems. What were once lifestyle products are becoming core infrastructure.

This shift is happening predominantly across three layers - hardware, AI, and data, each reinforcing the other.

Hardware is redefining what can be measured in the human body. Devices are moving from tracking behaviour to diagnosing and managing disease. Continuous monitoring, from blood pressure to hormones, is turning health from something episodic into something real-time. This marks a shift from reactive to continuous care.

Meanwhile, AI is changing how care is delivered. The first wave focused on reducing admin. Tools like AI note-takers proved just how real the problem is. But the next wave is more targeted. General-purpose AI is giving way to systems built for specific roles, workflows and environments.

Healthcare is not a single workflow but a collection of highly specialized ones. The companies that win will not be horizontal AI tools, but deeply integrated solutions that understand how care is actually delivered. Increasingly, these systems do not just assist humans, but execute tasks end to end, from documentation and billing to referrals and compliance.

Hardware generates the signals. AI interprets them. But the layer that compounds over time - and ultimately determines who wins - is data.

Healthcare is entering a new phase where continuous, real-world patient data becomes the foundation for treatment, drug development and care delivery. The rise of weight-loss drugs like Ozempic has accelerated this shift, creating demand for digital infrastructure that can track outcomes at scale and support millions of patients outside clinical settings.

The funding signals are already there. After a slowdown, digital health investment in Europe is rebounding sharply, more than doubling from 2024 to 2025, driven in particular by a surge in late-stage capital.

This shift signals a maturing market. Capital is concentrating around companies that move beyond wellness into clinical-grade products and infrastructure, where validation, outcomes and scalability start to define the winners.

In this model, the winners will not just build apps or devices. They will own the systems that sit at the centre of care delivery, integrating data, verifying outcomes, and continuously improving care.

Europe’s advantage

By building under stricter regulatory frameworks from day one, European companies are forced to prove clinical validity early. The result is products that do not just engage users, but actually work in real healthcare settings. At the same time, Europe’s strength in hardware, science and engineering creates a natural advantage in building defensible products, particularly in areas like medical-grade devices and continuous monitoring.

Europe’s healthcare systems also provide a powerful testing ground. Founders are tackling real bottlenecks, from clinical documentation and payments to remote monitoring and care coordination. The focus is not novelty, but utility - building tools that are adopted because they actually work.