As we make our way through Q1 of 2019, let’s look back on 2018 and analyze how exit activity for health technology compares to previous years. The graphic below shows total annual health technology exit events over time.
As the graphic demonstrates, 2018 saw a drop in health technology exit activity compared to the previous year. The 67 exit events in 2018 represent a 9% decrease from the 74 exit events in 2017, which was the highest year on record for exit activity. However, health technology exits are still on a general upward trend, with a 5-year CAGR of 25% from 2013 to 2018. Some of the exit events in 2018 include AveXis’s acquisition by Novartis for $8.7B, Flatiron Health’s acquisition by Roche for $1.9B, and PillPack’s acquisition by Amazon for $1B.
The Genomics category leads the sector in Q2 funding
The Digital Medical Devices category leads the sector in all-time funding
We’ll highlight these observations with some graphics and discussions below.
The Genomics Category Leads Health Technology In Q2 Funding
To start off, let’s review the amount of funding raised this quarter by each category within health technology.
The above graphic highlights that the Genomics category leads the sector in Q2 funding with just under $1B. Its funding is 1.4 times the funding of the next category, Digital Medical Devices at $700M.
Genomics companies utilize human genome data for analytics, prevention, and treatment. Some example companies in this category are 23andMe, Helix, and Counsyl.
Let’s now investigate how these categories’ funding compare with each other historically.
The Digital Medical Devices Category Leads the Sector in All-Time Funding
The graph below shows the all-time funding for different health technology categories. The Q2 funding and growth rates of these categories are also highlighted.
As the bar graph indicates, the Digital Medical Devices category leads the sector in total funding at almost $14B. The Genomics category follows in a close second place with an all-time funding of $13.6B. These two categories’ funding are more than twice the funding of the next category, IoT Fitness at $6.6B.
Digital Medical Device companies build IT-enabled medical and diagnostic devices for doctors. These devices include detection equipment, monitoring equipment, and surgical tools. Some example companies are Signostics, MediBeacon, Stimwave, and AliveCor.
In summary, it’s clear that the Genomics and Digital Medical Devices categories are leading the sector in funding. Let’s see how the the rest of 2018 shapes up for health technology!
Funding amount percentages showed a slight shift to later stages
Funding count percentages showed a clear shift to later stages
We’ll explain these key observations with some graphics and discussions below.
To help set the stage, the graphic below highlights health technology funding amounts over time. As you can see, the sector’s overall funding demonstrated consistent growth.
Health Technology Funding Amount Percentages Shifting Slightly to Later Stages
Let’s examine the health technology funding amounts by round as a percentage of the total funding amount by year.
The above graph indicates that there has been a slight shift to later-stage funding. In 2012, Seed and Series A funding amounts accounted for around 25% of total funding. By 2017, that total had dropped to under 20%. Consequently, the funding amounts from Series B onward grew from around 75% of total funding to over 80%.
Would the funding count percentages confirm this trend? Let’s examine in the the next section to find out.
Health Technology Funding Count Percentages Clearly Shifting to Later-Stage Events
The below graph shows the health technology funding event counts by round as a percentage of total events.
This graph paints a clearer picture of the funding shift than the previous funding amount graph. In particular, Seed funding count percentage decreased by more than half its size from 53% to 23%. The funding count percentages in all other rounds increased by various magnitudes from 2012 to 2017.
Conclusion: Health Technology Sector Matures As Funding Shifts to Later Stages
In summary, we have seen health technology funding amounts and funding event counts shift from the early-stage rounds to mid and late-stage rounds. These observations led us to conclude that the health technology sector is starting to mature.