Notes: US Healthcare Venture Capital Fundraising defined as an approximation of healthcare investment dollars to be invested by firms that historically invest in +50% US companies.
Source: PitchBook and SVB proprietary data
| 2020 | 2021 | 2022 | Q1 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sectors ($M) | US | EU & UK | Total | US | EU & UK | Total | US | EU & UK | Total | US | EU & UK | Total |
| Biopharma | 22,594 | 4,795 | 27,389 | 31,730 | 6,919 | 38,649 | 25,379 | 4,914 | 30,292 | 3,498 | 831 | 4.328 |
| Healthtech¹ | 11,760 | 1,613 | 13,373 | 33,031 | 2,869 | 35,900 | 13,074 | 3,865 | 16,940 | 2,584 | 203 | 2.786 |
| Dx/Tools | 9,116 | 1,784 | 10,900 | 11,964 | 2,703 | 14,667 | 8199 | 1619 | 9,817 | 1,020 | 369 | 1.389 |
| Device | 5,769 | 821 | 6,590 | 6,774 | 2,429 | 14,667 | 7,084 | 1,598 | 8,683 | 979 | 357 | 1.335 |
| Total | 49,239 | 9,013 | 58,252 | 83,499 | 14,920 | 98,419 | 53,736 | 11,996 | 65,732 | 8,092 | 1,759 | 9.851 |
Note:
1) Healthtech deals that overlap with other sectors are not included in healthtech totals on this slide but are included in healthtech-specific analyses on page 11. Financing data include private financings by venture-backed companies in the US, EU and UK. Dates of financing rounds are subject to change based on
add-on investments.
Source: PitchBook and SVB proprietary data.
Note: Financing data include private financings by venture-backed companies in the US, EU and UK. Dates
of financing rounds are subject to change based on add-on investments.
Source: PitchBook and SVB proprietary data.
| Q3'22 | Q4'22 | Q1'23 | ||||
|---|---|---|---|---|---|---|
| Indications | Dollars | Deals | Dollars | Deals | Dollars | Deals |
| Oncology | $268M | 15 | $310M | 15 | $125M | 17 |
| Platform | $594M | 18 | $190M | 8 | $342M | 11 |
| Neurology | $57M | 4 | $130M | 4 | $224M | 4 |
| Auto-Immune | $129M | 6 | $5M | 2 | $4M | 1 |
| AgBio/Animal Health | $28M | 5 | $0M | 0 | $12M | 2 |
| Anti-Infective | $53M | 4 | $0M | 0 | $58M | 1 |
| Respiratory | $412M | 4 | $25M | 1 | $6M | 1 |
Note:
1) Seed/Series A includes first-time investments from institutional or corporate venture investment in the US, EU and UK and any first-round investments equal to or greater than $2M, regardless of investor. Dates of financing rounds are subject to change based on add-on investments.
Source: PitchBook and SVB proprietary data.
This year saw the lowest quarterly investment activity
since Q4’19, with dollars hitting just $4.3B.
The shortfall in biopharma investment was driven by
two main factors. First, crossovers funded fewer
LIPO1 rounds in 2022 as public market performance
remains poor while uncertainty around inflation and
the federal pace of interest rate hikes remains. There
is a worsening mismatch between 2021-vintage latestage biopharma valuations and current public
comps for VC-backed biopharma publics. Second,
new investors demanded more progress before
funding the next round (mostly at Series B), forcing
companies to close smaller extensions or insider
rounds.
In 2023, biopharma companies will continue trying to
avoid down rounds that discourage follow-on
investors, instead raising insider/bridge and
extension rounds to give the companies more time
and runway to meet new investor’s expectations.
However, existing investors may be nearing
allocation caps which would force valuations resets
or company closures.
In this notoriously difficult fundraising environment,
companies are focused on cash preservation and
narrowing focus to one or two therapeutic areas. Big
bets on platform companies are less appetizing to
investors as focus shifts to achieving in-human
proof-of-concept. Oncology, neurology, and
orphan/rare companies lead Q1’23 investment.
 |
Auto-Immune | $715M post |
 |
Platform | $602M post |
 |
Orphan/Rare | $491M post |
 |
Platform | $455M postt |
 |
Oncology | $380M post |
 |
Platform | $330M post |
 |
Oncology | $315M post |
 |
Oncology | $273M post |
 |
Neurology | $271M post |
 |
Neurologyy | $263M post |
 |
Oncology | $255M post |
| Quarter | LIPO Deals |
Median Pre-Money ($M) |
Median Deal Size ($M) |
IPO % |
|---|---|---|---|---|
| Q1’20 | 17 | $245 | $108 | 88% |
| Q2’20 | 21 | $150 | $86 | 62% |
| Q3’20 | 28 | $140 | $92 | 54% |
| Q4’20 | 15 | $140 | $87 | 53% |
| Q1’21 | 38 | $184 | $100 | 53% |
| Q2’21 | 31 | $200 | $105 | 10% |
| Q3’21 | 24 | $169 | $90 | 13% |
| Q4’21 | 16 | $172 | $102 | 0% |
| Q1’22 | 17 | $160 | $100 | 5% |
| Q2’22 | 11 | $147 | $102 | 0% |
| Q3’22 | 6 | - | - | 0% |
| Q4’22 | 7 | - | - | 0% |
| Q1’23 | 3 | - | - | 0% |
Note:.
1) The LIPO (Likely to IPO) list tracks the top 15 crossover-funded private mezzanine deals ($40M+) as a proxy for IPO sentiment and pipeline. 2) Only includes private post-money values from publicly disclosed 2023 financings in PitchBook. 3) Financing data includes private financings by venture-backed
companies in the US, EU and UK. Dates of financing rounds are subject to change based on add-on
investments.
Source: PitchBook and SVB proprietary data.
While 2022 marked a rightsizing in the healthtech investment landscape as a whole, early-stage investment flourished. This trend has continued into
2023, with Q1’23 investment up 60% from Q4’22.
Healthtech companies were especially prone to high valuations in 2021, spurred by tech investors deploying capital into the space at unprecedented rates. Early-stage companies presented new opportunities in 2023 to invest at conservative
valuations driven by company performance, revenue and ability to improve healthcare outcomes and costs.
| Seed/Series A | Later Stage |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Note:
1) Seed/Series A includes first-time investments from institutional or corporate venture investment in the US, EU, and UK and any first-round investments equal to or greater than $2M, regardless of investor.
2) Biopharma drug discovery companies excluded from healthtech data. Dates of financing rounds are subject to change based on add-on investments.
Source: PitchBook and SVB proprietary data.
Dx/tools early-stage investment increased in Q1’23 from late 2022 while late-stage investment fell flat. Options for late stage dx/tools companies remain restricted as the shrinking public market limits near- term opportunities to match the huge dx/tools exits from 2020 and 2021 (including three $1B+ private M&A and 13 US/UK IPOs with $1B+ market caps).
Three of the four largest early-stage 2022 dx/tools deals closed in Q4’22 as many investors wait out the public market downturn by putting dollars to work in seed/Series A deals. Q1’23 activity was led by Artera’s $90M Series A, a dx analytics precision medicine company developing artificial intelligence (Al) tests for cancer patients.
Dx tests investment decreased sharply from Q4’22 ($421M) to Q1’23 ($167M), likely because the subsector has a historically difficult reimbursement and revenue ramp. Interestingly, R&D tools investment spiked this year despite exceptionally poor public market performance. Investment hit $727M in Q1’23, up 132% from Q4’22 ($314M). The top three earners in the space are all highly technical, gene therapy-enabling platforms utilizing computational biology and Al, showing investors’ continued appetite for Al and advanced analytics in the diagnostics space.
Leading companies include Asimov ($175M), Colossal Laboratories & Biosciences ($150M) and Evonetix ($55M). We’ve also seen at-home chronic condition monitoring continue to attract investment as these tools offer better prevention and early detection for value-based care delivery.
| Seed/Series A | Later Stage |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
 |
 |
 |
 |
 |
 |
Note:
1) Seed/Series A includes first-time investments from institutional or corporate venture investment in the US, EU and UK and any first-round investments equal to or greater than $2M, regardless of investor.
2) These companies overlap with the healthtech sector and are included in both sets of sector-specific analyses. Dates of financing rounds are subject to change based on add-on investments.
Source: PitchBook and SVB proprietary data.
Device investment is down from 2022’s pace, but
early-stage investment remains a bright spot and is
up 24% from Q4’22. This could indicate a shift from
2022 investor activity, which migrated away from
new early-stage deals and instead to portfolio
preservation to help existing later-stage portfolio
companies extend cash runways.
We saw the biggest drop in non-invasive monitoring
deals. Many non-invasive monitoring companies
include consumer apps and attracted nontraditional investors in 2020 and 2021, driving
valuations up. The recent pullback is possibly a
correction after exceptional investment activity in
this indication over the past two years.
Device companies in 2023 remain focused on many
of the same challenges that emerged in 2022: cash
preservation and difficulty attracting new investors
for fundraising. This year, some companies are
facing increased challenges selling devices into
hospitals, especially expensive devices. However,
there is heightened demand for advanced Internet
of Things (IoT) and AI/machine learning (ML) based
devices, especially those focused on early
detection and chronic condition management to
improve early interventions and avoid acute, highcost health expenses. As hospitals face increased
pressure to improve profit margins and drive cost of
care down, they will be most receptive to devices
that improve value-based care model adoption.
| Seed/Series A | Later Stage |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
 |
|
 |
Note:
1) Seed/Series A includes first-time investments from institutional or corporate venture investment in the US, EU and UK and any first-round investments equal to or greater than $2M, regardless of investor. Dates of financing rounds are subject to change based on add-on investments.
Source: PitchBook and SVB proprietary data.
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