Record quarter for VC funding in healthcare
U.S. medical startups raised a record $3.9 billion in venture capital in the first quarter of 2015 due to growing interest in biotechnology, digital health and healthcare services, according to the Dow Jones VentureSource 1Q'15 U.S. Venture Capital Report.
The quarter's healthcare total surpassed the previous record high of $3.42 billion invested in the second quarter of 2014. Biotechnology investment was responsible for most of the increase in venture funding at $2.14 billion which is a 72 percent increase from the first quarter of last year.
The record number of biotech companies that went public--58 venture-backed companies--is attracting investors, including major companies and investment firms, which aren’t typically active in venture capital, according to the report. For example, Moderna Therapeutics recently completed a $500 million financing, the largest biotech venture round ever, which included hedge fund Viking Global Investors and a signficant investment from Merck.
Digital technologies applied to healthcare contributed to the first quarter healthcare IT total of $429 million--a 56 percent increase over the same period last year.
The $703 million in healthcare services financing last quarter nearly matches the total of $762 million for all of last year. Q1 2015 enjoyed a 515 percent jump over the same period in 2014.
Medical devices was the only category to experience a decline in investment. The $624 million invested represented a 30 percent drop from the first quarter of 2014.
Editor
Editor Beth earned a bachelor’s degree in journalism and master’s in health communication. She has worked in hospital, academic and publishing settings over the past 20 years. Beth joined TriMed in 2005, as editor of CMIO and Clinical Innovation + Technology. When not covering all things related to health IT, she spends time with her husband and three children.