In a recent briefing, CB Insights reported increased funding in the healthcare sector for the first half of 2019 with $26.9 billion invested in healthcare companies across 2,258 deals globally. While promising, funding for full year 2019 is not projected to surpass the $58.5 billion raised by healthcare companies in 2018. The number of late-stage financings has also increased, showing signs of a maturing industry. In the first half of 2019, late-stage financings by healthcare companies accounted for 20% of all deals globally.
Within the healthcare industry, digital health companies are raising more capital in the United States than elsewhere in the world, with four of these companies completing “mega-rounds” (financings of over $100 million) in the first half of 2019. Interestingly, none of these four digital health companies have a “unicorn” designation, given to companies valued at over $1 billion. Currently, there are 38 healthcare unicorns globally, valued at over $90.7 billion. The U.S. is home to 31 of these healthcare unicorns.
Clinical trials-focused tech companies have raised $391 million in capital across 23 deals in the first half of 2019. More companies focusing on clinical trial technology have emerged as the shortening of preclinical development days directly affects returns for investors.
Artificial Intelligence (“AI”) in healthcare companies have raised over $1.4 billion across 153 deals in the first half of 2019. Patent applications for healthcare AI are up 5x over 2015, which may explain the increased interest and funding in companies in this sub-sector.
Mental health and wellness companies have set a quarterly record for funding, with 26 deals raising $321 million completed in the second quarter of 2019, bringing total funding to $523 million for 2019. As mental health has become a more widely talked about topic, demand for mental health and wellness services has surpassed supply by psychiatrists and other professionals, allowing for mental health and wellness apps and technology to fill these gaps.
For additional information and for CB Insight’s commentary, see their Global Healthcare Report.