Health care venture fundraising soared to $seventeen billion in 2020, a fifty seven% raise more than 2019’s file, according to Silicon Valley Bank. Financial commitment in venture-backed companies also rose to a new high of $fifty one billion.
SVB’s 10th annual Health care Investments and Exits Report, introduced Thursday at SVB’s Innovate Following digital summit, analyzes and predicts tendencies for global venture money fundraising, investing and exits that form the biopharma, healthtech, diagnostics/equipment and professional medical machine sectors.
What’s THE Effect
Strong IPO surroundings and sturdy non-public merger and acquisition action propelled U.S. health care venture fundraising to a fourth-consecutive file calendar year to $17B. The third quarter of 2020 set a high-water expense mark of $15 billion, the largest health care expense quarter at any time recorded. Every single sector — biopharma, healthtech, dx/equipment and machine — seasoned file expense.
IPOs in all sectors set or tied file figures. Write-up-IPO performance for venture-backed 2020 health care IPOs has been exceptional, with regular performance of +one hundred%.
Report biopharma expense was led by substantial mezzanine rounds that rapidly transitioned to IPOs. 30-three biopharma companies closed mezzanine rounds in 2020 and went public in the same calendar year. The time involving mezzanine spherical and IPO averaged just three months.
The number of healthtech promotions surpassed biopharma for the 1st time at any time (614 vs. 570), but biopharma expense rated highest with $24.5 billion invested. Biopharma and dx/equipment each individual observed numerous $one billion-moreover non-public M&A in 2020, foremost each sectors to file returns for the calendar year.
Healthtech companies achieved a industry cap of $9.8 billion at IPO. In contrast to 2019’s overall of $5.7 billion, this year’s class of IPOs ended up virtually twice as important at IPO.
Device M&A was down in 2020, but the sector has observed sustained IPO action and file submit-IPO performance Write-up-IPO performance for the class of 2020 achieved a health care very best of +a hundred and fifty%.
In conditions of outlook for the coming calendar year, SVB anticipates steady biopharma expense in Sequence A and later on-phase mezzanine funding, somewhat down below 2020’s file figures. In the meantime, healthtech expense will continue being solid as digital and hybrid care versions see continued growth, a lot more venture-backed healthtech companies will increase to provide alternative care.
Dx/equipment could attain file expense once more in 2021. Offer figures will most likely fall, but the dollars invested need to be in line with 2020 volumes.
THE Greater Trend
2020 also observed an raise in electronic wellness funding. Mercom Capital Group this week introduced its tally: $14.8 billion in fairness raised across 637 promotions, as perfectly as $six.8 billion in credit card debt and public industry funding across 26 promotions.
These represent a respective 66% and 278% raise more than the firm’s rely for 2019. In overall, one,694 distinct buyers took aspect in these promotions, and the business tracked a overall of 184 mergers and acquisitions throughout the earlier calendar year, a slight raise more than the 169 transactions of 2019.
In just the fourth quarter of 2020, there ended up 139 fairness funding promotions totaling $four.5 billion, a a hundred sixty five% raise more than Q4 2019.
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