Venture capitalists are investing some 70% more per fundraising round in healthcare startups compared with what they did a year ago, according to an analysis conducted by Pitchbook for Forbes.
In September, startups in healthcare raised $2.8 billion in venture capital funding spread across 135 deals. That’s up about 70% compared with the $1.64 billion that was raised in September 2017. But in fact there were the same number of deals — 135. On average that’s $20.7 million per deal compared with $12.1 million per deal a year ago.
Healthcare VC fundraising continues to be at a record high this year, as I reported last month. So far in 2018 startups have raised $23.26 billion among 1,359 deals, up 61% from the same period last year. But how does healthcare compare with other industries? Out of seven sectors that Pitchbook tracks, such as energy and financial services, healthcare has raised the second-most funding this year. Only the information technology sector has raised more, at $38.1 billion spread among 2,941 deals.
Butterfly Network, a startup that makes a handheld ultrasound device, had one of the largest fundraises of the sector last month. The company, which was cofounded by 2015 30 Under 30 alum Nevada Sanchez, raised a $250 million Series D led by Fosun Pharma and Fidelity Investments at a $1.25 billion valuation. (Here’s a video showing how the device works.)
In other areas of healthcare, Clarify Health Solutions, an analytics platform for health providers and patients, raised a $57 million Series B led by Kohlberg Kravis and Roberts at a $157 million valuation. And uBiome, the startup that uses DNA sequencing to identify microbes in a person’s stool raised $83 million at a $298 million valuation. (Former Novartis CEO Joe Jimenez announced he was joining uBiome’s board last month.)
Farming startup Indigo Agriculture’s $250 million Series E was also included in Pitchbook’s analysis. The Boston-based startup uses a database of genomic microbe information to predict which microbes are best for crop health and then use them in agricultural techniques. Another 30 Under 30 list member founded company, KSQ Therapeutics, which we wrote about last week, was one of the top ten fundraisers in pharma and biotech last month.