It was only four months ago that Fortune painted a picture of unicorpses littering the tech landscape. "The atmosphere has turned undeniably sour for startups," Jessica Mathews wrote—a particularly bitter pill to swallow after a period where it seemed like the money tap couldn't be turned off.
That reckoning certainly reached health. After an extraordinary post-pandemic period of growth, health tech startups took it on the nose—though how bad the bruise was depended heavily on the category. (Biopharma? 'Tis but a scratch. DTC? Bring in the stretcher.)
The headlines were bleak. ("Gold rush over." "Resetting expectations." "Sinking valuations." "Brutal.") But talk to investors now, as I did at Fortune's Brainstorm Health summit this week in Southern California, and there's some relief that reality is finally catching up to the hype.
"If you're an entrepreneur right now, it can feel like fundraising is really, really hard," said Maveron's Anarghya Vardhana. But "now is the time to build an incredible company," she said, because "the resilience, the grittiness, the forced constraints" are allowing for companies to refine their business models, market approaches, and more.
"The bar is higher. What investors are looking for is different than what investors were looking for in the past," added 7wireVentures' Alyssa Jaffee. "I have not heard so many conversations about profitability in all my years of being a venture capitalist than I have in the last 18 to 24 months."
Getting back to business basics and unmet needs? That's reason to be hopeful—whatever the time horizon.
"There is money to be made and patients to be served," GV's Cathy Friedman said. "So I am optimistic."
P.S. We'll be discussing this topic and many more at Fortune's annual, invite-only Brainstorm Tech summit in July. Want to join us? Register here.
Andrew Nusca
Editorial Director, Brainstorm
Twitter: @editorialiste
Email: andrew.nusca@fortune.com
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Joe Abrams curated the deals section of today's newsletter.
Correction: Tuesday's newsletter incorrectly said that Databricks Ventures’s first VC fund invested in 23 startups. The correct number of startups that the fund invested in is 25.
