The healthcare space saw record investment in Q3 says CB Insights report

Steven Loeb · October 23, 2020 · Short URL:

Spaces like AI, women's health and telemedicine all saw big increases in dollars and deals

2020 has been a wild year for healthcare around the globe, to put it mildly, with the coronavirus putting undue stress on the system, while also totally upending the way patients receive their care. At the same time, though, the disruption has also created opportunities for innovation, and that is reflected in the amount of venture capital activity the space is now seeing.

Case in point, the third quarter of 2020 saw a record amount of venture capital go into the healthcare space, according to The State of Healthcare Report Q3'2020 report, released by CB Insights earlier this week.

In all, there was $21.8 billion invested across 1,539 deals in Q3, representing an increase of over 18 percent in dollars, and deals from Q2. Year-over-year, dollars went up over 61 percent, from $13,490, while deals went up 14 percent, from 1,350. The amount invested rose in Asia, Europe and North America by 20 percent, 4.5 percent and and 21 percent, respectively.

Among the biggest deals of the quarter were JD Health, a Chinese online pharmacy that raised $830 million; insurtech startup Bright Health, which raised $500 million; XtalPi, an AI platform for drug R&D, which raised $384 million; and Tizona Therapeutics, a developer of cancer immunotherapies that raised $300 million. 

When broken down by sector, a number of them saw major increases this quarter, including artificial intelligence, where there was $2.2 billion invested across 121 deals, up from $1.5 billion invested in 88 deals in Q2. That's a 36.5 percent increase in dollars, and a 37.5 percent increase in deals. 

Telehealth, unsurprisingly, saw a huge increase in the quarter. While deals only rose around 4 percent, from 156 to 162, dollars into this subsector exploded, going from $1.6 billion to $2.8 billion, for a 72 percent increase. Year-over-year, dollars went up 92 percent, while deals went up 45 percent. 

The biggest deals included VillageMD, which raised $275 million; Ro, which raised $200 million; Grand Rounds, which raised $175 million; Preventice Solutions, which raised $137 million; and Lyra Health, which raised $110 million. Those five deals made up nearly $900 million of total funding.

Another space that saw a big upswing was women’s health, where funding more than doubled in the third quarter, from $228 million to $544 million, while deals grew 17 percent. The mental health space, however, saw a decline in dollars, dropping 16 percent from $496 million to $417 million, even as deals rose 15 percent, from 59 to 68. This is the second consecutive quarter in which that happened, after the space rose sharply in Q1. 

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