Oct 10, 2017

VCs invest record amount into health care startups

Venture capitalists already have invested more into U.S. life sciences companies in 2017 than in any other prior year, according to data released today by PitchBook and the National Venture Capital Association.

Data: PitchBook-NVCA Venture Monitor; Chart: Lazaro Gamio / Axios

Dollar details: $12.1 billion into 804 U.S.-based, life sciences companies through the end of September. The dollar volume easily tops last year's record haul of $11.8 billion, and means that life sciences so far this year represents 19.7% of all U.S. venture capital, which is up from 16.5% in 2016. All investment stages have seen median size growth between 2016 and 2017, but early-stage took the biggest bounce from $6.1 million to $10 million.

Three trends driving the boom:

  1. Advancements in areas like computational biology now mean that tech investors can participate in life sciences deals.
  2. Silicon Valley founders and investors have been stung by years of criticism for investing in silly app companies that don't "matter," and many have responded by pushing into health.
  3. Patent cliff issues continue to haunt big pharma, driving new startups that can be acquired to restock the new product shelves.
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