Key Takeaways
The SVB Healthcare Investments & Exits 2021 edition covers data for the entire year of 2021. Healthcare trends reveal venture fundraising almost doubled in 2021 over the previous year, with phenomenal growth across sectors: biopharma, healthtech, dx/tools, and device. Download the report for a deep dive into the current healthcare landscape and critical trends to watch.
01 30% higher investment
Funding for healthcare companies exceeded $80 billion, beating 2020’s record by more than 30% in the US and Europe.
02 Record dx/tools exits
IPOs tripled and M&A doubled over 2021.
03 157% more healthtech investment dollars
42 healthtech unicorns emerged this year. This is more than 4x the activity of 2020.
All four sectors showed record investment in 2021
Investments exceeded $80 billion, beating 2020’s record by more than 30% (in the US and Europe). Healthcare investment into companies has doubled every two years since 2017, from $16 billion to $34 billion to >$80 billion in 2021.
Investments will continue however we may not see the record numbers like we did in 2021. The focus will be on current investments to move toward exit readiness.
Biopharma activity remains strong
Seed/Series A deals and dollars are up, with seed investments regularly hitting $10-20 million, most backed by institutional investors. Platform investments led early-stage biopharma for the second year in a row with a significant increase in anti-infective activity.
Companies like Nano Cures and Pardes Biosciences are two examples of anti-infective companies focusing on technology to prevent infectious diseases, epidemics and pandemics. It is companies like these that will pave the way for how healthcare providers will respond to future pandemics.
Healthtech top indications
Provider operations companies comprised a record 35% of total seed/series A funding, up from 20% in 2020.
As the demand for healthcare providers to digitize their practice continues to grow, we expect increased early-stage investment into provider operations companies, including video consultations and virtual chat boxes with providers.
R&D Tools and dx analytics
R&D Tools had four $20+ million deals. Computational bio and R&D tools companies continue to experience increased investment in this sector. Dx analytics leveraging AI/ML technology to help clinicians determine a course of treatment experienced a significant increase in financing as well.
Computational bio is changing the development process for drug discovery. It combines software innovation, biological or biochemical insights and differentiated data sets.
NIM leads device investment in both dollars and deals
Early-stage device investment jumped over $1 billion for the first time ever. The increase was led by non-invasive monitoring (NIM) investment, a tech-enabled service model for device, up 92% over 2020 and 152% over 2019.
The need to monitor patients outside the hospital setting has become paramount in the Covid-19 world. We have already seen multiple M&A in NIM, including Preventice Solutions and Bardy Dx and anticipate more in 2022.
Biopharma post-IPO performance cools down
Average post-IPO performance for the class of 2021 is negative 21%. Private M&A activity was down in 2021 to the lowest number we have seen since 2013. However pre-clinical M&A is up, generating three $1B+ exits in 2021.
The low number of M&A is directly related to the open IPO window, as most early-stage companies have embraced mezzanine rounds and path to IPO (at excellent valuations) versus an early-stage exit.
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