Health care venture fundraising persists amid market woes

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Word: Fundraising outlined as an approximation of healthcare funding {dollars} to be invested by companies that traditionally put money into +50% U.S. corporations; Reproduced from SVB; Chart: Axios Visuals

Enterprise fundraising into well being care hit $15.8 billion midway by means of 2022, which already interprets to the third-highest 12 months in historical past, SVB’s new mid-year report on well being care investments and exits reveals.

Why it issues: In a market fraught with public market volatility and a slowdown in dealmaking, buyers are having no drawback elevating new automobiles with devoted allocations to well being care.

  • That validates the business’s longer-term tailwinds and resilience as market (and macro) headwinds proceed dominating headlines.

Zoom in: Enterprise funding in well being tech, particularly, may be characterised by a report degree of seed and Collection A fundings throughout 1H 2022, which features a larger frequency of $50 million-plus Collection A rounds, SVB says.

  • Fueled by medical trial enablement offers, the median seed and Collection A funding valuation elevated to $13 million, versus $10 million the 2 prior years, per the report.

Actuality test: Total, Q2 funding fell 40%, from Q1, the report reveals. Plus…

  • There have been no VC-backed well being tech public debuts within the first half of the 12 months following the 2021 IPO occasion.
  • Whereas early-stage fundings thrived, late stage exercise dropped off with the IPO window shut down.

Between the strains: Should you have a look at the market from a historic perspective, issues nonetheless look fairly good.

  • Throughout well being care, Q2 funding totaled $15.5 billion, which is decrease than each quarter in 2021 however greater than each 2020 interval, per SVB.
  • In well being tech, quantity and capital invested declined notably relative to 2021, however at $10.2 billion of investments already properly on tempo to surpass 2020.

Sure, and: Well being tech, in contrast with different sub-sectors, witnessed the strongest step-up multiples, each in early- and later-stage fundings, SVB says.

  • Early stage standouts had been Patient12 (17.9x) and Homeward Well being (10x), Atlas Well being (13.7x) and AcuityMD (12.3x).
  • Late stage standouts had been CareBridge Well being (10x) and Well being Gorilla (5.5x).

Essentially the most lively: Accounting for enterprise exercise total, Gaingels has been probably the most lively well being tech investor since 2021, clinching 33 complete investments, SVB says.

  • Common Catalyst, Alumni Ventures Group, Andreessen Horowitz, and Perception Companions adopted go well with.

What’s subsequent in well being tech: SVB predicts…

  • Q3 funding in well being tech will drop to 2020 ranges however bounce again in This autumn to ~$7 billion.
  • Exercise will likely be characterised by decrease valuations and fewer mega-deals as public market chaos weighs on personal markets.
  • High corporations will see extra insider and bridge rounds, however extra down rounds are seemingly.
  • Non-traditional buyers will take part in fewer new venture-backed offers in contrast with 2021.

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