Venture capital funding for health tech innovators is “often considered an important indicator of their value propositions and potential for long-term success,” notes the Deloitte Center for Health Solutions in an article, “Trends in Health Tech Investments.”
And, if that’s true, 2021 definitely hinted at a successful future for medtech. The year-end report from market research firm Evaluate Vantage puts this trend into perspective.
Biopharma and Medtech Review 2021 presents it this way: “Medical device companies have just concluded a storming year for both acquisitions and flotations, and that means venture backers felt justified in ploughing their cash into the sector. They have done so in a big way — medtech has had its strongest ever year for venture financing, with a total haul of $9.9 billion.”
With the focus squarely on the development of tests to address the COVID-19 pandemic, it is no surprise that diagnostics developers “have done best over the year, with liquid biopsy and COVID test makers represented in the top 10.” The report notes that cancer testing company Caris Life Sciences, which employs the “investor catnip of artificial intelligence in its technology,” raised the greatest single deal of the year with an $830 million infusion in May.
The second-largest investment went to UK-based CMR Surgical. The robotic surgery group closed a $600 million series D round in June. According to Evaluate, the combination of these two deals helped the second quarter of 2021 set a new record at $4.4 billion. This compares to the previous record of $2.9 billion in the first period of 2017.
Diagnostics companies were strongly represented among the top 10 investments. Many are liquid biopsy developers, with Caris, Freenome, and Intervenn all developing products in this area. The others offer COVID tests or testing services.
The pandemic appeared to play a major role in the blockbuster infusion of cash. According to the report, the pandemic was a likely driver of the funding rounds closed by Kry and Quanta. Kry, which operates in the UK and France under the name of Livi, provides video consultation technology to connect patients with healthcare professionals, and Quanta makes home-based dialysis machines.
“It seems that nearly two years after the coronavirus emerged, VCs still see test makers as promising investment prospects,” says the report. “In some ways, there are encouraging signs that the cash is being spread around to a greater degree than in prior years. The top 10 rounds made up just 31 percent of the total VC haul, a relatively low proportion, and the year’s largest round is smaller than in either 2019 or 2020.”
The report also provides insights into the year’s medtech M&A and IPO activity along with analyses of the biopharma sector.
Editor and Director of Medical Content
For a copy of the report, go here .