Health care venture fundraising soared to $17 billion in 2020, a fifty seven% improve about 2019’s document, according to Silicon Valley Financial institution. Financial investment in venture-backed organizations also rose to a new higher of $51 billion.
SVB’s tenth yearly Health care Investments and Exits Report, launched Thursday at SVB’s Innovate Up coming digital summit, analyzes and predicts tendencies for world wide venture funds fundraising, investing and exits that form the biopharma, healthtech, diagnostics/tools and clinical device sectors.
What is THE Effect
Sturdy IPO atmosphere and sturdy private merger and acquisition activity propelled U.S. health care venture fundraising to a fourth-consecutive document yr to $17B. The 3rd quarter of 2020 established a higher-water investment mark of $fifteen billion, the premier health care investment quarter ever recorded. Every single sector — biopharma, healthtech, dx/tools and device — knowledgeable document investment.
IPOs in all sectors established or tied document figures. Write-up-IPO efficiency for venture-backed 2020 health care IPOs has been outstanding, with average efficiency of +a hundred%.
History biopharma investment was led by huge mezzanine rounds that rapidly transitioned to IPOs. Thirty-three biopharma organizations shut mezzanine rounds in 2020 and went public in the exact same yr. The time between mezzanine spherical and IPO averaged just three months.
The quantity of healthtech deals surpassed biopharma for the 1st time ever (614 vs. 570), but biopharma investment rated best with $24.five billion invested. Biopharma and dx/tools just about every noticed a number of $one billion-as well as private M&A in 2020, leading the two sectors to document returns for the yr.
Healthtech organizations reached a marketplace cap of $nine.eight billion at IPO. In comparison to 2019’s total of $five.seven billion, this year’s course of IPOs were being just about twice as important at IPO.
System M&A was down in 2020, but the sector has noticed sustained IPO activity and document put up-IPO efficiency Write-up-IPO efficiency for the course of 2020 reached a health care very best of +150%.
In conditions of outlook for the coming yr, SVB anticipates steady biopharma investment in Collection A and afterwards-phase mezzanine financing, somewhat underneath 2020’s document figures. Meanwhile, healthtech investment will stay solid as digital and hybrid treatment products see continued progress, additional venture-backed healthtech organizations will broaden to offer different treatment.
Dx/tools could realize document investment again in 2021. Offer figures will probable slide, but the bucks invested should be in line with 2020 volumes.
THE More substantial Development
2020 also noticed an improve in digital health funding. Mercom Money Group this 7 days launched its tally: $fourteen.eight billion in fairness elevated throughout 637 deals, as well as $six.eight billion in credit card debt and public marketplace financing throughout 26 deals.
These characterize a respective 66% and 278% improve about the firm’s count for 2019. In total, one,694 distinct buyers took component in these deals, and the business tracked a total of 184 mergers and acquisitions during the earlier yr, a slight improve about the 169 transactions of 2019.
In just the fourth quarter of 2020, there were being 139 fairness funding deals totaling $4.five billion, a a hundred sixty five% improve about Q4 2019.
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