Healthcare Industry Trends
Q1 2023 Update
Key takeaways
$55B
Venture capital raised since 2021. Sitting on record dry powder, VCs are well-positioned to fund new healthcare companies.
27
Funds closed in Q1 2023, signaling that overall interest in healthcare investment remains strong.
586
The number of US VC deals in Q1 2023 held steady as investors focused on their portfolio companies.
Venture fundraising continues
Despite a slowdown, venture funds raised nearly $22B in 2022, the second-largest fundraising year ever. In Q1 2023, the fundraising pace accelerated slightly to $6.8B with early-stage investors preferring seed and Series A over late-stage strategies.
With an unprecedented amount of venture healthcare capital yet to be deployed, it’s anticipated that the top companies will continue to attract investor interest, albeit at investor-driven valuations.
Source: PitchBook and SVB proprietary data.
Source: PitchBook and SVB proprietary data.
Investors remain cautious
The overall investment pace continued to slow in Q1, as investors weathered macro uncertainty and the market downturn. Investors are focusing on their promising later-stage portfolio companies via insider extensions and bridge rounds.
There will likely be an increase in larger, outsider-led rounds in H2 2023. We anticipate valuations will rightsize as many of rounds will be down rounds or flat “engineered” rounds with incentives for new investors.
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