Where do the most venture dollars go? There are a lot of ways to slice that question.
If it’s geographically, Boston and San Francisco are always in fisticuffs for who’s snagged the most deals. If it’s sector, the focus on biotech significantly outweighs medical device. But in the human body?
Turns out the focus is on eyes and ears, according to a recent Wall Street Journal piece. Investors are chasing indications like blindness, hearing loss and other age-related conditions to pour their money into.
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The story broke down venture investment over the years into a number of body parts, in order of venture investment: Heart, brain, skeleton-bones-joints, endocrine glands and pancreas, eyes, immune system, intestine, blood, stomach, lungs, skin, kidneys, reproductive system, muscles, urinary system, ears and liver. It’s really a useful tool:
The Human Body, According to Venture Capitalists
The WSJ chose the eyes and ears as funding darlings not necessarily for the bulk of capital they’ve received, but because they’re arenas of fast-growing interest.
“At the same time, venture capital is pulling back from two historical leaders, heart and orthopedic conditions, in part because of difficulties in bringing medical devices for those ailments to market,” reporter Brian Gormley writes.
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Startups that focus on the eye, for instance, received $848.9 million last year, and another $442.7 million this year, according to the WSJ. Conditions like age-related macular degeneration have been particularly attractive.
Next in line in recent funding darlings are the ears – companies received $76.2 million in investment last year, and that’s already increased to $114.4 million this year. The trend’s expected to continue, thanks to the fact that some 30 percent of people aged 65 to 74 have diminished hearing, according to the National Institute on Deafness and Other Communication Disorders.
Interest in cardiovascular disease is still high, but venture investment is waning: About $709.8 million was invested in heart-related therapies last year, the WSJ reports – the lowest since 1999. By contrast, in 2011 venture investment in the category exceeded $1.1 billion. The WSJ expounded on the challenges in the heart and vascular disease market:
Those declines are occurring in part because many of the medical-device investors that fueled the cardiovascular surge in the mid-2000s have changed strategy or been unable to raise new investment capital. Medical devices have lost their appeal with many investors because of the long process of securing U.S. regulatory approvals and difficulties companies have experienced securing reimbursement from insurers.