2015 wasn’t such a great year for medical device investing.
But a new report from CB Insights, a database which tracks both venture capital and corporate venture capital investments in various sectors, shows that the industry — globally — is poised for a comeback in 2016.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
The report found that as of August 8, global deal value and deal volume are at $2.1B and 288 deals respectively. If funding keeps this pace, then by year-end, the number of deals will be on track to exceed 475, representing a 6% increase from last year. Two major deals — involving CVRx and Acutus Medical — is expected to propel the value of all deals to $3.52 billion, a slight uptick from $3.40 billion in 2015.
Here’s a five-year history of investment in the industry.
While the year may bode good news, the second-quarter saw a dip. Startups raised $757 million through 121 deals, but the amount marks the first sub-$800 million quarter since the first quarter of 2015.
Interestingly, unlike digital health industry, where early stage startups snag most of the investment dollars, in the medical devices industry seed/angel rounds made up only 18% of the 2016 deals so far.
The news that funding volume and value are making a comeback should be heartening for startup entrepreneurs looking to break into an industry already challenged by long regulatory cycles.
“Robust funding is crucial for companies in this industry, which require development pipelines of 3 to 7 years in duration and millions of dollars in costs in order to develop devices that meet regulatory and other hurdles for commercialization,” the report said.
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