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Medical device is “sector darling” when it comes to healthcare VC deals in fourth quarter

January 16, 2013 7:10 am by | 0 Comments

There might be a lot of griping about how tight the venture capital world is when it comes to funding medical devices, but reality seems to be spinning a different yarn altogether.

A new funding report from CB Insights, a venture capital database, describes the medical device industry as the “sector darling” of VCs who invested in healthcare in the fourth quarter of 2012. In fact medical device deals comprised 42 percent of the overall number of healthcare deals done in the fourth quarter of last year. By comparison biotech deals stood at 15 percent, drug development at  13 percent and pharmaceuticals at 10 percent.

Overall, healthcare deals in the fourth quarter jumped to a four quarter high in deal volume – 164 deals in Q4 compared with 153 in Q1, whereas investment dollars jumped to a five-quarter high – $1.99 billion in Q4 compared with $1.89 billion in the fourth quarter of 2011. The increase also reverses a downward trend in deal volume and investment dollars in the previous three quarters.

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But it is true that investors are more attracted to later-stage deals. In fact, Series E and later deals accounted for the lion’s share of the investment dollars (26 percent of amount invested) although VCs deal the most number of deals (26 percent) in the Series C stage.

[Photo Credit: Expensive healthcare from BigStock Photo]

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Arundhati Parmar

By Arundhati Parmar

Arundhati Parmar is the Medical Devices Reporter at MedCity News. She has covered medical technology since 2008 and specialized in business journalism since 2001. Parmar has three degrees from three continents - a Bachelor of Arts in English from Jadavpur University, Kolkata, India; a Masters in English Literature from the University of Sydney, Australia and a Masters in Journalism from Northwestern University in Chicago. She has sworn never to enter a classroom again.
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