Healthtech sees record $21B invested in 2015

Series A rounds see $4.1 billion put into 337 deals

Vator has been closely following the rise of the healthtech sector in recent years, even holding our own event last year (we have another one coming up in February; ger your tickets here).

It's an exciting space, and one that venture capitalists have been pouring a ton of money into. VC investments now have reached record levels, as 2015 has seen almost $21 billion invested globally as of December 8, according to data out from PitchBook, record amount of money for the space. 

That is an increase of around 11 percent, or $2 billion, over the $18.84 billion invested in 2014, which was also the previous high. If you go all the way back to 2000, you'd see that the amount invested was a fraction of what we’re seeing now, with a mere $5.13 billion. 

The data shows that a lot of the investing this year is coming in the early stage rounds, specifically Series A, which has already seen $4.1 billion invested this year. 

The data shows a space where there is more money going into fewer companies. The median Series A deal size in the healthcare sector doubled from 2014 to $6.3 million. However, the number of deals declined for the second year in a row to 337, down from 363 in 2013. The $4.1 billion includes 25 rounds valued at at least $50 million.

When broken down by sector, pharma and biotech easily lead in Series A deals, with 151, followed by healthcare device, which saw 90 deals. Healthtech systems saw 53 deals, and healthcare services had 43. 

"The large increase in early stage funding can be attributed to the relatively quick investment-to-exit cycle that healthcare, especially biotech, has seen over the past couple years," said PitchBook in its report. "Not only has the quick turnover given investors great returns, but it's freeing up capital to be used on new investments, rather than being tabbed for portfolio follow-on rounds."

The example the company gives is Juno Therapeutics, which went public last year less than a year after raising its first round of VC funding. The company had raised over $316 million in the year before its IPO and debuted with a $1.9 billion valuation.

With the return its early investors received, they could then go and invest that money back into the healthcare sector. Hence why so there has been such a big increase this year, as more than half. 57 percent, of the investments made by Juno's backers have been made in the healthcare sector.

There were five such exits this year, none of which were founded earlier than 2012. 

Voyager Theraputics, for example, which had raised $105 million, and was founded just this year, already went public. It raised $364.5 million and currently has a market cap of $777 million. 

The five biggest funding rounds in 2015 were:

• Theranos, which raised $537 million in March for a $9 billion valuation

• Immunocore, which raised $320 million in July

• Intarcia Theraputics, which raised $300 million in June for a  $5.5 billion valuation

• Stem CentRx, which raised $250 million in August, for a $5 billion valuation

• Denali Theraputics, which raised $217 million in May, for a $270 million valuation

(Image source: blogs.vancouversun.com)