Healthcare Industry Trends
2023 Annual Report
Key takeaways
$19B
Raised by U.S. VC firms for health-focused funds
2023 was the third best year for healthcare fundraising in the past decade.
42%
Of healthcare deals were spoon-fed
The proportion of deals involving later-stage companies valued at more than $20M raising $15M or less is on the rise.
19
Total number of biopharma IPOs
Biopharma exits are historically low, but the IPO market is showing signs of life.
Fundraising is bright spot for healthcare
Investors are cutting smaller checks, deploying capital more slowly and focusing more on diligence. But total fundraising for new health-focused VC and growth funds is down only 14% from 2022 and remains the third highest total over the past decade.
This year’s wave of down and flat rounds of funding have undoubtedly been painful for companies and their shareholders in the short term, but it has also led to a right-sizing of the market, laying the groundwork for a more sustainable future.
Source: PitchBook and SVB proprietary data
Source: PitchBook and SVB proprietary data
Investors keep companies alive with spoon-fed deals
The proportion of spoon-fed deals has increased dramatically for all but one healthcare sector since 2021, as investors increasingly use inside and extension rounds to help companies weather a challenging market.
While biopharma, diagnostics and healthtech all saw a large spike, the percentage of biopharma spoon-fed remains relatively low, likely because the sector is driven more by clinical milestones.
Late-stage biopharma companies find exits
The total value of biopharma IPOs and disclosed M&A deals remained flat in 2023 — and well below the 2021 peak. But the sector saw 19 IPOs, more than all other healthcare sectors combined.
Public exits in biopharma have been restricted to later-stage companies with robust clinical milestones. Most biopharma IPOs were Phase II or beyond, and none were pre-clinical.
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