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    Healthcare Industry Trends
    Mid-Year 2023 Update

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    Key takeaways

     
    A new healthcare investment landscape is emerging marked by fewer deals, slower investment pace, smaller check sizes and more scrutinous investors. Yet, there are reasons for optimism. The rightsizing of valuations is leading to more sustainable, long-term growth and profitability targets. Venture fundraising rebounded, with investors sitting on record capital for right-sized investment into the healthcare innovation economy.

    $14B

    Venture capital raised in H1’23. At this pace, 2023 healthcare fundraising could near 2021’s record pace.

    $35B

    Venture capital raised in the last 18 months, resulting in an unprecedented amount of dry powder to fund new healthcare companies.

    1,482

    The number of VC deals in H1’23. Quarter-over-quarter investment has stabilized in the last three quarters, signaling an end to the dramatic pullback in investment.

    The data

     
    Our proprietary insights report takes an in-depth look at the key investments and exits trends within biopharma, healthtech, dx/tools and device. New to this year’s report is a deep-dive on the thriving women’s health subsector.
    HEALTHCARE VC FUNDRAISING

    Venture fundraising on the rebound

     

    Fundraising in H1’23 accelerated slightly after a relatively slow H2’22, hitting $6.8B in Q1’23 and $6.9B in Q2’23. This uptick is driven by expectations for lowering Fed interest rates, a resetting of valuations and very early signs of a rebounding stock market.

    There is still an unprecedented amount of healthcare-dedicated venture capital to be deployed to top companies at rational, investor-driven valuations.

    US Healthcare Venture Capital Fundraising HCIE MY 2023Notes: 1) US Healthcare Venture Capital Fundraising defined as an approximation of healthcare investment dollars to be invested by firms that historically invest in +50% US companies. 2) Estimates based off of anecdotal conversations with investors and expert analysis of last fund deal pace and focus on healthtech.
    Source: PitchBook and SVB proprietary data.
    VC Dollars and Deals by Healthcare Sectors HCIE MY 2023Note: Healthtech deals that overlap with other sectors are not included in healthtech totals on this chart. Financing data include private financings by venture-backed companies in the US, EU and UK. Dates of financing rounds are subject to change based on add-on investments.
    Source: PitchBook and SVB proprietary data.
    HEALTHCARE INVESTMENTS

    Investments reach a plateau

     

    Investment dollars and pace have remained relatively flat for the last three quarters, signaling the dawn of a new market cycle marked by rightsized valuations, slower investment pace, smaller check sizes and more concentrated cohorts of investors.

    Valuations are being recalibrated to align with current market conditions, rooted in fundamentals such as clinical assets and paths to profitability.

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    Written and researched by SVB experts

     

    Our deep relationships with top entrepreneurs and investors inform our insights and give us a vantage point unlike any other bank.

    Down Arrow
    Jackie Spencer Headshot
    Jackie Spencer
    Head of US Relationship Management, Life Science and Healthcare
    Jackie leads the US relationship management team for life science and healthcare accelerator and growth.
    Kale Frank Headshot
    Kale Frank
    Managing Director, Life Science and Healthcare
    Kale is responsible for providing insights, advice, venture financing and banking solutions to help life science and healthcare companies scale from Series A and beyond.
    Raysa Bousleiman Headshot
    Raysa Bousleiman
    Vice President, Venture Capital Relationship Management, Life Science and Healthcare
    Raysa partners with venture capital firms focused on healthcare and life science innovation, and drives global research exploring venture healthcare trends.
    Ben Johnson Headshot
    Ben Johnson
    Head of Early Stage
    Ben leads SVB’s seed stage life science and healthcare effort in the US, spending his time building relationships with early stage companies and key forces in the healthcare ecosystem.
    Bill Sideris Headshot
    Bill Sideris
    Director, Life Science and Healthcare
    Bill is a director with the northeast medical device and healthtech practice, where he provides comprehensive financial products and services as well as flexible lending solutions to clients.
    Dennis He Headshot
    Dennis He
    Managing Director, Life Science and Healthcare
    Dennis and his team partner with venture-backed and publicly-traded biopharma, diagnostics, tools, device and healthtech clients covering Northern California and the Pacific Northwest.
    This material, including without limitation to the statistical information herein, is provided for informational purposes only. The material is based in part on information from third-party sources that we believe to be reliable but which has not been independently verified by us, and, as such, we do not represent the information is accurate or complete. The information should not be viewed as tax, accounting, investment, legal or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment, or to engage in any other transaction.

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