On May 2, 2018, I had the pleasure of sharing the BioEnterprise Midwest Healthcare Growth Capital Report during the MedCity INVEST conference in Chicago. The Report tracks biomedical growth equity investment from several data sources, as well as from our collaborative partners across 11 Midwest states.
It includes details down to the company sector type (health IT software and services, medical device and biopharmaceutical), funding round and each deal’s investors.
A Look Inside Midwest Biomedical Investment
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In 2017, the 11 states that we include in the report (Ohio, Indiana, Michigan, Kentucky, Kansas, Western Pennsylvania, Illinois, Wisconsin, Minnesota and Iowa) raised a record breaking $2.5 billion in new equity investments. This investment total is the largest to date and a 38 percent increase over 2016. For the first time in the report’s history, the Healthcare IT Software and Services sector secured the greatest investment with $1.2 billion, or 47 percent of the total.
A few large Healthcare IT and Software Services investments put this sector well above the Biotech and Device sectors:
- Outcome Health, a Chicago health IT and software services company reported a $500 million deal – the largest fundraise in the Midwest and the largest single raise in the report’s history;
- Bright Health, a Minneapolis-based health IT company had the second largest raise, $160 million;
- And Cincinnati-based, health IT company, PatientPoint secured a $140 million raise.
Year over year, the largest investments are getting larger and are increasingly moving towards Health IT. Here’s how all sectors faired in 2017:
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- Healthcare IT and Software and Services companies: $1.2 billion (47%)
- Biotech and Pharmaceutical companies: $710 million (29%)
- Medical Device companies: $587 million (24%)
So how do each of the states and regions fair in comparison to one another? Illinois ($866 million), Minnesota ($561 million) and Ohio ($497 million) led Midwestern states in attracting investment dollars. Chicago ($854 million), Minneapolis ($553 million), Cincinnati ($222 million) and Cleveland ($218 million) were the leaders in the Midwest regions.
In 2017, Cleveland area biomedical investments were the highest they’ve been since 2014, when CoverMyMeds closed one of the largest Healthcare IT rounds in the country. Despite the Midwest investment trend in the Healthcare Software and Services sector, the Device sector continues to have a dominant presence in Cleveland with an all-time high in investment dollars in 2017 ($118.7 million).
How BioEnterprise is Contributing to the Growth of Cleveland’s Biomedical Industry
BioEnterprise fosters a supportive biomedical economic community of growth and innovation. We are a team comprised of industry veterans in medical device, healthcare IT and biotechnology. Formed in 2002 by Cleveland Clinic, University Hospitals, Case Western Reserve University, as well as civic, philanthropic, and industry leaders, we have helped create, recruit, and accelerate more than 350 companies that have raised more than $2.3 billion in funding and achieved 68 exits.
As part of BioEnterprise’s commitment to growing Cleveland’s biomedical sector and engaging with global healthcare thought leaders, we began a strategic engagement with the Global Center for Health Innovation in December 2017. A beautiful building located in the heart of Cleveland, we think of this asset as a gateway between Ohio’s healthcare and biomedical communities and the rest of the world. The Global Center convenes a mix of industry, investors, and innovators to solve critical healthcare problems that no one entity can attack on its own. Engaged brands include BioEnterprise, Cardinal Health, Case Western Reserve University, Cleveland Clinic, DHG Healthcare, G2G consulting, GE Healthcare, Gleeson, HIMSS, Innovation Fund Northeast Ohio, JumpStart, MetroHealth System, OnBase by Hyland, NGP Capital, Philips Medical, Plug and Play, RiverVest Ventures, RRE Ventures, Siemens, SmartShape, Steris, TeamNEO, University Hospitals, and multiple digital health, medical device and biotechnology startups.
The Global Center recently hosted The Second Annual Medical Capital Innovation Competition which attracted applicants from 24 countries and 33 states. Twenty-eight total teams (22 Open/Professional Division and 6 Collegiate) competed for $100,000 in cash prizes and collaboration opportunities with major healthcare partners including Cleveland Clinic, University Hospitals, and The MetroHealth System.
And Plug and Play Cleveland, the first PnP satellite innovation platform in North America outside of original in Silicon Valley, in partnership with Cleveland Clinic and JumpStart, launched its first cohort with a dozen cutting-edge healthcare startups selected from a field of more than 480 applicants from around the world.
Building upon our existing industry expertise, BioEnterprise, and its partners will continue to help catalyze Cleveland’s growth as a global healthcare hub.
To view the full interactive Midwest Healthcare Growth Capital Report, visit http://bioenterprise.com/2017-2/
