Healthtech Investments Stabilizing; Silicon Valley Bank Releases Future of Healthtech 2023 Report

Rhea-AI Summary

Despite ongoing public market headwinds, the healthtech sector shows signs of resilience with positive performance trends and increased M&A activity, according to Silicon Valley Bank's Future of Healthtech 2023 report. Valuation resets impact investment activity, but venture fundraising has rebounded and there is significant dry powder for investment. Key data points include $8.2 billion in venture capital invested, healthtech publics trading up 6% in Q1 and 25% in Q2, and 75 private venture-backed M&A deals in 2023. 50% of healthtech mega-deals focused on value-based care.

Positive

• Healthtech sector shows signs of resilience with positive performance trends and increased M&A activity
• Venture fundraising has rebounded and there is significant dry powder for investment

Negative

• Valuation resets impact investment activity

Investment pace remains stable as valuations reset

SAN FRANCISCO, Oct. 4, 2023 /PRNewswire/ -- Despite ongoing public market headwinds, the healthtech sector is showing signs of resilience, according to the Future of Healthtech 2023 report from Silicon Valley Bank (SVB), a division of First Citizens Bank. In the first half of 2023, the sector saw the first positive public performance trends in over a year with stock trading up the first two quarters. M&A deal volume is also on the rise with activity expected to increase into 2024.

"While the current investment environment presents ongoing challenges, the healthtech sector is showing signs of stabilization with improvement in the public market and an increase in M&A volume," said Julie Ebert, SVB Managing Director for Healthtech. "We've also seen promising investment trends in value-based care where an increase in strategic acquisitions is creating positive momentum."

The pressure on valuations continues to impact investment activity across the sector. While many companies likely had enough runway from 2021 to avoid raising capital in 2022, those that previously avoided down rounds by raising insider capital extensions must now consider valuation resets.   

"Following a steep drop in 2022, venture fundraising has rebounded and there is significant dry powder for right-sized investment into the healthtech sector. We expect to see more stabilization as the investment environment resets valuations to match growth and profitability targets," said Ebert.

SVB's Future of Healthtech 2023 report examines the latest investment, fundraising and deal activity across the sector and provides analysis for subsectors including value-based care, alternative care, provider operations, clinical trial enablement, wellness & education, healthcare navigation, medication management and insurance. SVB has released a healthtech report annually since 2018.

Future of Healthtech 2023: Key Data Points

• $8.2 billion in venture capital invested into private healthtech companies
• Healthtech publics trading up 6% in Q1 and 25% in Q2
• 75 private venture-backed M&A deals in 2023
• 78% of healthtech deals have undisclosed valuations
• 50% of healthtech mega-deals (deals that are greater than or equal to $100 million) were focused on value-based care
• $530 million of venture capital was invested into private women's health companies in 2023

Ebert, along with other leaders from SVB's Life Science and Healthcare Banking practice, will be sharing the report at the upcoming HLTH conference.  

Learn More
To read the complete Future of Healthtech 2023 report, click here:
The Future of Healthtech report 2023 | Silicon Valley Bank (svb.com)

A leader in providing market insights about the innovation economy, SVB has produced six new market reports to date in 2023. For the complete library of SVB's signature reports, please visit Market Research Industry Trends & Insights | Silicon Valley Bank (svb.com)

About Silicon Valley Bank
Silicon Valley Bank (SVB), a division of First Citizens Bank, is the bank of some of the world's most innovative companies and investors. SVB provides commercial and private banking to individuals and companies in the technology, life science and healthcare, private equity, venture capital and premium wine industries. SVB operates in centers of innovation throughout the United States, serving the unique needs of its dynamic clients with deep sector expertise, insights and connections. SVB's parent company, First Citizens BancShares, Inc. (NASDAQ: FCNCA), is a top 20 U.S. financial institution with more than $200 billion in assets.  First-Citizens Bank & Trust Company, Member FDIC. Learn more at svb.com

 

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SOURCE Silicon Valley Bank