Healthcare VC continues to Slide
Venture capital deal volume in the healthcare industry continued its downward trend in Q3.
The number of Q3 healthcare venture deals stood at 143, the lowest in at least 5 quarters. The number represented a decline of 22% from the year-ago quarter; a drop of just 3% from Q2.
- In a survey, nearly 40% of firms said they had decreased their investments in medical technology companies in the past 3 years and expect the slide to continue for another 3 years;
- In terms of dollars, healthcare firms collected $1.7B in venture investment during Q3;
- A drop of 4% from the year-ago quarter and a decline of 11% from Q2.
The Bottom Line: The report did contain some good news for the health industry, particularly early stage companies. Health investors are increasingly turning their attention to seed deals. As a percentage of overall deals, healthcare seed investment (11%) hit a record high in Q3. The seed VC investment gives investors a relatively low-cost option on companies they invest in. (Source: CB Insights) Special notation -an unfriendly regulatory landscape is getting voiced … louder. An uncertain exit environment is also causing healthcare venture capital to continue its consistent trend downwards. Industry complaints about regulators — never the most popular people with the business community— have grown louder this year.The survey was sponsored by the National Venture Capitalists Association‘s Medical Innovation & Competitiveness Coalition.
