Silicon Valley Bank and their reports live! Now under the aegis of First Citizens Bank, SVB’s 14th Healthcare Investments & Exits Mid-Year Report for 2024 covers four healthcare areas: biopharma, health tech, DX (diagnosis)/tools, and device. Concentrating on health tech, highlighting their findings which are very different than the other three sectors and mostly in line with H1 findings from Rock Health that this Editor analyzed as possibly a ‘dead cat bounce’:
- Series A raises are easier than in other sectors, and growing. It is the second-strongest start for Series A health tech investment since 2021. While average valuation sizes are remaining static around $10 million, and deals to date are just under $8 billion.
- For later-stage companies, their high valuations during the palmy days of 2020-early 2022 created a ‘valuation trap’. The report uses ‘nadir’ to describe it–“now investors (who) are now opening up their coffers for new investments.” (The picture might be less optimistic if one pulled out Transcarent, which is controlled by two investors, General Catalyst and 7wireVentures.) Flat and down rounds are the norm.
- They term the above ‘price discovery’, defined as the opportunities to extend due diligence, “build conviction” and build the “right syndicate” of investors.(Above all page 14)
- Investment is accelerating at a rate above the other sectors (page 18).
- Exits have cratered at $0.2 billion with only four M&A deals reported. “Companies are preparing themselves to be good public market performers by tuning their cash efficiency and ensuring good unit economics”. Their view is that this may accelerate in H2 2024. (page 21).
SVB is offering the report online as a free preview download. Contact them for the full report.
Leave a Reply