Investment pace remains stable as valuations
reset
SAN
FRANCISCO, Oct. 4, 2023 /PRNewswire/ -- Despite
ongoing public market headwinds, the healthtech sector is showing
signs of resilience, according to the Future of Healthtech
2023 report from Silicon Valley Bank (SVB), a division of
First Citizens Bank. In the first half of 2023, the sector saw the
first positive public performance trends in over a year with stock
trading up the first two quarters. M&A deal volume is also on
the rise with activity expected to increase into 2024.
"While the current investment environment presents ongoing
challenges, the healthtech sector is showing signs of stabilization
with improvement in the public market and an increase in M&A
volume," said Julie Ebert, SVB
Managing Director for Healthtech. "We've also seen promising
investment trends in value-based care where an increase in
strategic acquisitions is creating positive momentum."
The pressure on valuations continues to impact investment
activity across the sector. While many companies likely had enough
runway from 2021 to avoid raising capital in 2022, those that
previously avoided down rounds by raising insider capital
extensions must now consider valuation resets.
"Following a steep drop in 2022, venture fundraising has
rebounded and there is significant dry powder for right-sized
investment into the healthtech sector. We expect to see more
stabilization as the investment environment resets valuations to
match growth and profitability targets," said Ebert.
SVB's Future of Healthtech 2023 report examines the
latest investment, fundraising and deal activity across the sector
and provides analysis for subsectors including value-based care,
alternative care, provider operations, clinical trial enablement,
wellness & education, healthcare navigation, medication
management and insurance. SVB has released a healthtech report
annually since 2018.
Future of Healthtech 2023: Key Data Points
- $8.2 billion in venture
capital invested into private healthtech companies
- Healthtech publics trading up 6% in Q1 and 25% in
Q2
- 75 private venture-backed M&A deals in 2023
- 78% of healthtech deals have undisclosed valuations
- 50% of healthtech mega-deals (deals that are greater
than or equal to $100 million) were
focused on value-based care
- $530 million of venture
capital was invested into private women's health companies in
2023
Ebert, along with other leaders from SVB's Life Science and
Healthcare Banking practice, will be sharing the report at the
upcoming HLTH conference.
Learn More
To read the complete Future of Healthtech
2023 report, click here:
The Future of Healthtech report 2023 | Silicon Valley Bank
(svb.com)
A leader in providing market insights about the innovation
economy, SVB has produced six new market reports to date in 2023.
For the complete library of SVB's signature reports, please visit
Market Research Industry Trends & Insights | Silicon Valley
Bank (svb.com)
About Silicon Valley Bank
Silicon Valley Bank (SVB), a
division of First Citizens Bank, is the bank of some of the world's
most innovative companies and investors. SVB provides commercial
and private banking to individuals and companies in the technology,
life science and healthcare, private equity, venture capital
and premium wine industries. SVB operates in centers of innovation
throughout the United States,
serving the unique needs of its dynamic clients with deep sector
expertise, insights and connections. SVB's parent company,
First Citizens BancShares, Inc. (NASDAQ: FCNCA), is a top 20
U.S. financial institution with more than $200 billion in assets. First-Citizens
Bank & Trust Company, Member FDIC. Learn more at svb.com
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SOURCE Silicon Valley Bank