The Future of Healthtech
2022
Key takeaways
1
Investments are down but rebalanced from 2021 with shifts to earlier stages
US, EU and UK healthtech investments hit $23 billion in the first three quarters of 2022, with an especially sharp drop in Q3 2022. Investments have shifted to earlier stages where valuations aren’t as inflated.
2
IPO window shut, but M&A on the rise
Inflation, global geopolitical factors and interest rate hikes all created a tumultuous public market and shut healthtech’s IPO window. However, private VC-backed M&A are up 16% versus the first three quarters of 2021.
3
Mental health valuations and deal sizes up despite broader downturn
Mental healthcare demand soared this year, fueled by rising mental health conditions and growing provider shortages.
Market rebalances from 2021’s boom
Investment slowed in 2022 with a 40% decline in mega-deal investments as the market rebalances from last year's unsustainable activity.
With a record amount of dry powder available to healthtech startups, and M&A on the rise, there is still a tremendous growth opportunity with US/EU healthtech investments predicted to reach $27 billion by the end of the year.
Source: PitchBook, SVB proprietary data and SVB analysis.
Source: S&P Capital IQ, Pitchbook and SVB analysis.
Healthtech IPO window closes
After a record 19 IPOs in 2021, market conditions and poor returns brought healthtech IPOs to a halt in 2022.
With the majority of healthtech stocks trading negatively at a median performance of -58%, healthtech companies are expected to delay IPO plans and remain private, while considering M&A opportunities.
Provider operations eclipses alternative care in 2022 investment
Provider operations leads 2022 investment at $7.0 billion, closely followed by clinical trial enablement at $6.8 billion and alternative care at $5.6 billion.
Alternative care earned the bulk of healthtech investment in 2021 but saw the sharpest drop in 2022, while provider operations investment remains steady due to soaring demand for technology adoption to compete with the growth of alternative care solutions.
Source: PitchBook, SVB proprietary data and SVB analysis.
Source: PitchBook, SVB proprietary data and SVB analysis.
Virtual and hybrid care are here to stay
Now that virtual care is ubiquitous in 2022, investment is shifting to companies delivering quality outcomes.
Mature alternative care companies must not only prove their profitability but also their ability to take on risk and accountability with buyers to deliver quality outcomes.
Explore other SVB reports
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.
