SANTA CLARA, Calif.,
Jan. 7, 2021 /PRNewswire/
-- Healthcare venture fundraising soared to $17 billion in 2020, a 57% increase over 2019's
record, according to Silicon Valley Bank (SVB), the bank of the
world's most innovative companies and their investors. Investment
in venture-backed companies also rose to a new high of $51 billion.
SVB's 10th annual Healthcare Investments and Exits
Report, released today at SVB's Innovate Next virtual summit,
analyzes and predicts trends for global venture capital
fundraising, investing and exits that shape the biopharma,
healthtech, diagnostics/tools (dx/tools) and medical device
sectors.
"2020 was a remarkable year for venture fundraising and
investment in healthcare at a time when innovation is more
important than ever," said Jonathan
Norris, Managing Director of SVB's Life Science and
Healthcare Practice and author of the report. "One of the bright
spots this year has been the investment dollars pouring into
Dx/tools and biopharma companies developing solutions to battle
COVID-19."
Notable results from 2020:
- A strong IPO environment and robust private M&A activity
propelled US healthcare venture fundraising to a fourth-consecutive
record year to $17B.
- The third quarter of 2020 set a high-water investment mark of
$15 billion, the largest healthcare
investment quarter ever recorded. Each sector – biopharma,
healthtech, dx/tools and device – experienced record
investment.
- IPOs in all sectors set or tied record numbers. Post-IPO
performance for venture-backed 2020 healthcare IPOs has been
exceptional, with average performance of +100%.
- Record biopharma investment was led by large mezzanine rounds
that quickly transitioned to IPOs. Thirty-three biopharma companies
closed mezzanine rounds in 2020 and went public in the same year.
The time between mezzanine round and IPO averaged just three
months.
- The number of healthtech deals surpassed biopharma for the
first time ever (614 vs 570), however, biopharma investment was
highest with $24.5B invested.
- Biopharma and dx/tools each saw multiple $1B+ private M&A
in 2020, leading both sectors to record returns for the year.
- Healthtech companies achieved a market cap of $9.8 billion at IPO. Compared to 2019's total of
$5.7 billion, this year's class of
IPOs were nearly twice as valuable at IPO.
- Device M&A was down in 2020, but the sector has seen
sustained IPO activity and record post-IPO performance Post-IPO
performance for the class of 2020 achieved a healthcare best of
+150%.
"Following the record highs seen in 2020, we don't expect
healthcare fundraising to have the same momentum in the year
ahead," said Norris. "However, with fresh capital to invest and a
continued open IPO window, the flow of investments into
venture-backed companies should continue at a healthy pace."
SVB's outlook for 2021:
- SVB anticipates stable biopharma investment in Series A and
later-stage mezzanine financing, slightly below 2020's record
numbers.
- Healthtech investment will remain strong. As virtual and hybrid
care models see continued growth, more venture-backed healthtech
companies will expand to provide alternative care.
- Dx/tools could achieve record investment again in 2021; deal
numbers will likely fall but dollars invested should be in line
with 2020 volumes.
Norris will present the key findings from the annual report at
Innovate Next at 11:40 am PST today.
Innovate Next is a new virtual summit convening executives and
investors from around the world to discuss the most pressing topics
and innovative solutions transforming healthcare. The event is
hosted by SVB Financial Group entities Silicon Valley Bank,
healthcare investment bank SVB Leerink, and SPD Silicon Valley Bank
(SSVB), SVB's joint venture bank in China. The Innovate Next agenda features
keynotes from Dr. Sanjay Gupta,
Chief Medical Correspondent for CNN, and Sylvia Mathews Burwell, President of
American University and the 22nd
Secretary of the US Department of Health and Human Services (2014
to 2017), in addition to panels and breakout sessions with
change-makers from the world's most pioneering companies and
institutions.
The Life Science and Healthcare Practice at Silicon Valley Bank
delivers specialized solutions and market expertise in the areas of
biopharma, healthtech, medical device, diagnostics/tools (dx/tools)
and healthcare services, with a focus on helping companies of all
sizes grow. Learn more about SVB's Life Science and Healthcare
Practice at
svb.com/industry-solutions/global-life-science-healthcare.
Read the full 10th annual Healthcare Investments
and Exits report here:
svb.com/trends-insights/reports/healthcare-investments-and-exits/2021-annual
About Silicon Valley Bank
For more than 35 years,
Silicon Valley Bank (SVB) has helped innovative companies and their
investors move bold ideas forward, fast. SVB provides targeted
financial services and expertise through its offices in innovation
centers around the world. With commercial, international and
private banking services, SVB helps address the unique needs of
innovators. Learn more at svb.com.
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SOURCE Silicon Valley Bank