<p><strong>SANTA CLARA</strong> – Venture investment in healthcare reached new heights in 2021, with more than $80 billion invested in biopharma, medical device, diagnostics/tools (dx/tools) and healthtech companies, according to <a href="https://www.svb.com/">Silicon Valley Bank’s</a> annual <a href="https://www.svb.com/trends-insights/reports/healthcare-investments-and-exits?utm_source=press-release&;utm_medium=organic-social&;utm_campaign=us-2022-01-aw-tl-na-na-lh-na&;utm_content=lp_na"><em>Healthcare Investments and Exits Report</em></a>.</p>
<p>The more than 30% increase over 2020’s record is punctuated by a banner first half of the year.</p>
<p>&#8220;Venture fundraising and investment in healthcare has continued at a torrid pace this year due to the great exit environment and lofty step ups in valuations,” said report author Jon Norris, Managing Director of SVB&#8217;s Life Science and Healthcare Practice. &#8220;With newly closed venture funds dedicated to healthcare this year, there is a large pool of capital to support new investments and create a well-funded venture healthcare ecosystem for years to come.”</p>
<p>SVB&#8217;s annual report analyzes and predicts trends for venture capital investing, fundraising and exits that shape the biopharma, medical device, diagnostics/tools and healthtech sectors in the US and Europe.</p>
<p><strong>Notable Results of 2021</strong>:</p>
<ul>
<li>Healthcare venture fundraising nearly doubled 2020’s record at $28.3 billion, providing a large pool of dedicated capital to support new investments in the coming years.</li>
<li>All sectors saw records in investment activity, highlighted by healthtech more than doubling 2020’s investment levels, with later-stage $1B+ valuations surging to create 42 new unicorns in 2021 – more than 4x 2020’s total.</li>
<li>Biopharma investment totaled $36B, as Biopharma Seed/Series A saw an outsized increase in anti-infective investment. There continued to be a drop in orphan and rare disease activity.</li>
<li>Mega deals in dx/tools tripled compared to 2020 with 38 $100M financings due to robust activity from late-stage investors.</li>
<li>Early-stage device investment hit a record at $1.2B, driven by (non-invasive monitoring) NIM investment, which was up 92% over 2020.</li>
<li>Overall, deal investment declined slightly in the second half of the year as investors worked through a difficult public market environment.</li>
<li>Venture healthcare exits also set records in 2021 with record IPO activity across every sector and private M&;A records for healthtech, dx/tools and device sectors.</li>
</ul>
<p><strong>Outlook for 2022:</strong></p>
<p>&#8220;Looking ahead to 2022, we anticipate a slight decrease in fundraising and investment more closely mirroring the record levels seen in 2020, as VCs prep their existing portfolio for exits but continue to invest recently-closed funds,” said Norris.</p>
<ul>
<li>SVB expects venture fundraising to hit $16B and investment in companies to total $64B.</li>
<li>Biopharma will likely see lower overall investment in the sector and a slowdown in IPO activity. However, M&;A should pick up in 2022 with a strong pace of private pre-clinical M&;A continuing.</li>
<li>Heathtech should see a continued strong year of M&;A as SVB anticipates massive consolidation in this sector. Investments will be healthy but not at 2021 levels. The IPO market will remain open to more mature companies.</li>
<li>In dx/tools, SVB estimates slightly fewer IPOs in 2022 and at lower valuations. Private M&;A will remain strong with more than 20 deals predicted in 2022.</li>
<li>SVB expects that investment in the device sector will decline as hybrid investors slow down mezzanine investing. M&;A should continue to be robust, but the IPO market will be more discerning.</li>
</ul>

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