Angel investors are flocking to healthcare.
A new report shows that healthcare companies received a greater percentage (37 percent) of angel investment dollars than startups from any other industry in 2011.
Within the healthcare sector, medical devices dominated angel investment. Sixty percent of healthcare investments went to medical devices and equipment, far exceeding pharmaceuticals, drugs and biotechnology, which received about 21 percent of all healthcare dollars.
The data from the report is based on 573 deals that total $873 million in investment dollars. The so-called “Halo Report” was produced by the Angel Resource Institute, Silicon Valley Bank and CB Insights.
The importance of the healthcare sector to angel investors stems in part from the fact that angels typically are more comfortable investing in areas in which they have expertise, and several angel investors are prominent former healthcare executives, said Anand Sanwal, CEO of CB Insights.
“The other factor driving interest in healthcare is that many of these angels are motivated by more than financial returns in that they are also aiming to give back,” Sanwal said. “And part of that giving back comes from helping a new generation of entrepreneurs and part of that also comes from backing companies in healthcare that are often attacking some of our most intractable problems.”
A few other notable data points from the report:
- The median amount invested per angel round grew 40 percent to $700,000, compared with 2010
- Sixty-seven percent of angel deals were co-invested with at least one nonangel
- In terms of total deals, the five most active angel groups in 2011 were: Tech Coast Angels, Band of Angels, Golden Seeds, Central Texas Angel Network and Launchpad Venture Group
Of course, much of angel investment occurs under the radar, so no report could truly measure the full breadth of all angel activity in the U.S., but the Halo Report may offer the best available data.
Angel groups and investors interested in including their data in future Halo Reports should contact the Angel Resource Institute’s research manager.