SANTA CLARA, CA – January 4, 2018 –Healthcare
venture capital fundraising set a record of $9.1 billion in 2017, increasing 26
percent over 2016, according to Silicon Valley
Bank (SVB), the bank of the world’s most innovative companies and their
investors. Investments into venture
capital-backed biopharma, medical device and diagnostics/tools companies also
are expected to break a record in 2017 when the final numbers are compiled for
SVB today released its annual Trends in Healthcare
Investments and Exits Report
that analyzes and makes predictions about the top venture capital investing,
fundraising and exit trends that are shaping the biopharma, medical device and diagnostics/tools sectors.
“This year’s report points to
healthcare innovations leading to increased investments,” said Jon Norris, Managing
Director of Silicon Valley Bank’s Life Science and Healthcare Practice and
author of the report. “New technologies such as artificial intelligence and
machine learning have led to more generalist investors entering the healthcare space.
They are leveraging their tech expertise, particularly in the diagnostics/tools
Results from 2017:
investment and fundraising in the healthcare sector set new records,
underscoring the strength of biopharma Series A deals, new interest in medical
devices and the promise of technology to advance diagnostics/tools opportunities.
- Investors making big bets on new technologies led biopharma and device
Series A investments to record levels. Spikes in Q1 and Q4 biopharma Series A
deals propelled the sector to another record year, posting $2.8 billion in
- Biopharma saw a wave of IPOs, beating 2016’s total. IPOs had a significant
upswing in pre-money valuations.
- While biopharma big exit M&A
activity slowed, focus continued on early-stage companies while IPOs shifted to
later-stage companies. SVB’s report defines big exit M&A as acquisitions of venture
capital-backed companies with at least $75 million upfront in biopharma and $50
million upfront in device and diagnostics/tools.
- Non-invasive monitoring
deals took off in medical device and traditional healthcare venture investors have returned to the
- M&A activity in the device sector was steady, however, in 2018, SVB
expects neuro and drug delivery technologies to drive investor interest and also
become an emerging exit area.
companiessaw no M&A
activity, though investors were drawn to the potential of next-generation
sequencing (NGS) and liquid biopsy companies. The sector raised more than $2.8
billion in 2017, a record.
“On the heels of the healthy 2017 investment
and fundraising environment, we anticipate M&A exits to increase in 2018
across biopharma and diagnostics and tools,” Norris said. “Specifically, we
anticipate more exits in biopharma as acquiring companies continue to restock
their pipelines with early-stage assets.”
SVB’s outlook and expectations for 2018:
- U.S. healthcare
venture capital fundraising will decline in 2018 to $6-7 billion, as larger
firms closed funds in the last year.
- Biopharma M&A
will increase from 14 deals in 2017 to at least 20 deals in 2018 due to
available acquirer cash and the need to replenish their pipelines.
- Medical device investments
are expected to increase. M&A will
be stable, buoyed by PMA/De Novo 510(k) pathway companies that have achieved
healthy returns and spend less time between raising Series A and exiting.
- Diagnostics/tools investments in 2018 will dramatically decline by at
least 25 percent from 2017’s record; although, the number of deals is expected
to be steady. SVB expects large tech
companies to continue to invest in and potentially buy companies in this
The Life Science and
Healthcare Practice of Silicon Valley Bank delivers specialized solutions and
market expertise in the areas of biopharma, medical device, diagnostics and
tools, digital health and healthcare services, with a focus on helping
companies of all sizes grow.
Read the full Trends in Healthcare Investments and Exits
2018 report here: https://www.svb.com/healthcare-investments-exits-report/
About Silicon Valley Bank
For more than 30 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.