Venture capital fundraising boomed in 1H 2021 fueled by venture healthcare’s rapid response to the pandemic. Year-to-date, VC healthcare fundraising exceeded 2020’s full-year record ($16.8B) by 30%. Many venture firms raised opportunity funds to double down on previous investments, and we saw private equity (PE) and hedge funds create private capital funds to invest in later-stage venture rounds.

Buoyed by great IPO performance and big M&As in 2020, investment into companies spiked to $47B in 1H 2021, more than double 2020’s first-half pace and close to 2020’s full-year record.

Series A biopharma investment dollars almost doubled 1H 2020, while the number of deals grew by a third. Overall, the sector saw increased mezzanine (mezz) crossover activity in biopharma with 83 likely to IPO†(LIPO) financings in 1H 2021, indicating that investors believe the IPO window will remain open.

In healthtech, we saw a surge of invested capital in 1H 2021, partially driven by hedge funds and growth PE firms coming down market. This was highlighted by large round sizes and lofty valuations, including 28 private financings with $1B+ valuations. The increased adoption of virtual/hybrid care models, resulting from COVID-19 lockdowns and reduced access to in-person care, has supercharged the alternative care space and accounted for a large percentage of the healthtechdollar increase.

With support from a strong IPO market and multiple $1B+ private M&A in 2020, dx/tools investment in 1H 2021 is on pace for another record. R&D tools dominated the number of deals and total dollars. COVID-19 dx tests investment continued.

Reversing a three-year downward trend, Series A device activity was up significantly with dollars and deals far ahead of 2020’s mid-year numbers. Overall, invested dollars in the sector were close to year-end 2020 numbers, led by non-invasive monitoring, neurology and imaging.