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2 charts that show how VCs are bypassing early-stage deals in healthcare

12:19 am by | 2 Comments

For a nice visualization of the changing funding environment for emerging healthcare companies, check out this this graph of VC deals over the past five quarters.

 CB insights Series A crunch

Early-stage healthcare funding – defined as seed and Series A rounds – accounted for 30 percent of the VC deals done in the first quarter of this year, according to a new analysis by CB insights, which tracks venture capital firms. That percentage has dropped consistently over at least the past five quarters, from 41 percent in Q1 of last year.

In that sense, healthcare is bucking the national trend where VCs are doing more seed deals despite the growing concern about a Series A crunch. More than half of the VC deals done in Q1 were early-stage.

CB insights overall VC

But, the seed rounds that do happen in healthcare are getting bigger; the median size for a VC seed round has been inching upward over the past five quarters.

Healthcare VC deals as a whole also strayed from national trends. After finishing 2012 with a strong Q4, they dipped back to the volume and value seen throughout most of 2012. Medical devices continued to gobble up the most deals and funding, while drug development made gains over last quarter.

Meanwhile, over all sectors, VC funding was up and the number of deals reached a multi-year high.

Here’s the link for the full VC funding report.

[Chart from CB Insights]

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Deanna Pogorelc

By Deanna Pogorelc MedCity News

Deanna Pogorelc is a Cleveland-based reporter who writes obsessively about life science startups across the country, looking to technology transfer offices, startup incubators and investment funds to see what’s next in healthcare. She has a bachelor’s degree in journalism from Ball State University and previously covered business and education for a northeast Indiana newspaper.
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