Healthtech Investments Surpass Pre-Pandemic Levels,
Stabilizing Between $3.5B and
$4.5B Per Quarter in 2024
SAN
FRANCISCO, Oct. 16, 2024 /PRNewswire/ --
The healthtech sector is experiencing a recalibration in
valuations, as the industry is showing signs of early recovery with
investments stabilizing and artificial intelligence (AI) driving
new growth, according to the 2024 Future of Healthtech Report from
Silicon Valley Bank (SVB), a division of First Citizens Bank.
Despite ongoing market volatility and macroeconomic uncertainty,
healthtech investment in 2024 is on a positive trajectory, hovering
between $4.0 billion and $4.5 billion per quarter and surpassing
pre-pandemic levels.
The 5th edition of SVB's Future of Healthtech Report
provides a detailed analysis of the healthtech market, including
investment trends, sector evolution, and the growing importance of
AI and value-based care in reshaping healthcare. It also explores
the challenges companies face in finding their next round of
capital or an exit as investors and acquirers have become more
discerning. Despite these challenges, the report indicates
that healthtech remains a hotbed for innovation, with investments
in Provider Operations and Alternative Care leading the
sector.
"We are witnessing a transition from the inflated valuations of
2021 and 1H-2022 to more sustainable investment practices," stated
Julie Betts Ebert, Managing Director
of Life Sciences and Healthcare Banking at Silicon Valley Bank. "AI
is playing a crucial role in streamlining administrative workflows,
and companies that can demonstrate a clear return on investment are
driving the sector forward."
Additional findings from the Future of Healthtech 2024
report include:
Healthtech Key Data Points
- Dollars raised in the first eight months of 2024 (January
through August) have already exceeded the totals for all of
2019.
- In 2024, 42% of healthtech investment rounds were seed
rounds, up from 21% in 2019, with a median deal size of
$3.8M.
- Of all US healthtech deals $5M
and above, 35% were undisclosed and at least 12% were down rounds,
the highest proportion in recent years.
- Thus far in 2024, we have yet to see a deal over
$500M, where each of the prior
five years had at least one deal of $500M or more.
AI Investment by the Numbers
- Overall funding for AI-focused healthtech attracted
$4.8 billion, with AI-focused
administrative healthtech generating 2.4 billion in
funding.
- 50% of 2024 healthtech AI investment has been
administrative, compared to 37% clinical, and 13% R&D.
- There have already been more investments in healthtech
companies leveraging AI in 2024 than in any prior year. AI
valuations in healthtech are up 50% from 2019 values.
- Tempus, with its $411M IPO in
June 2024, showed that taking a
significant valuation haircut could be a worthwhile price of
admission into the public markets. Since going public, Tempus
has seen total returns of 48% as of August.
Ebert, along with Jackie Spencer,
Head of US Relationship Management for Life Science and Healthcare
and other SVB leaders, will be at the upcoming 2024 HLTH
conference.
Learn More
To read the complete Future of Healthtech
2025 report, click here:
The Future of Healthtech Report 2024 | Silicon Valley Bank
(svb.com)
A leader in providing market insights about the innovation
economy, SVB has produced 10 new market reports to date in
2024. 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, Member FDIC. Learn
more at svb.com.
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SOURCE Silicon Valley Bank