Startups

Funding Of Health Startups Hits $80.6 Billion

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Global investments in healthcare startups set a new record in 2020, reaching $80.6 billion in equity funding. A new report from research firm CB Insights said the 2020 funding was raised in at least 5,500 deals, with growth seen in North America, Asia and Europe.

Also, what CB Insights terms “mega-rounds” (over $100 million) of venture funding rose to a record 187 deals last year.

CB Insights said its “healthcare report provides a data-driven look at global healthcare technology investment trends, top deals, active investors and corporate activity.”

According to the report, healthcare funding trended up through the year, growing for the three consecutive quarters after the pandemic hit in early 2020.

For its part, digital health funding globally went up by 45 percent over the previous year. Equity funding to digital health companies hit an all-time high, reaching $26.5 billion in 2020.

Notably, companies such as Butterfly Network and Hims & Hers went public via special-purpose acquisition companies as opposed to the traditional route. These SPACSs take investor cash through an initial public offering (IPO) and then go out to buy a company or companies.

One exception to the overall trend has been that the portion of funding going to early-stage companies has declined going back to the third quarter of 2019. This means  mid- to late-stage companies gained a bigger piece of the overall funding pie.

The pandemic has also brought about a surge in interest in telehealth. Before COVID-19, getting U.S. patients to use telehealth services was a challenge. J.D. Power found that only 10 percent of consumers used telemedicine in 2019. But when the pandemic hit, doctors’ offices shut down and patients and providers suddenly saw telehealth in a new light.

“What telehealth likely required was a catalyst, [and] COVID-19 has now been that catalyst,” Murray Brozinsky, CEO of the virtual care platform Conversa Health, told PYMNTS in an interview.

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NEW PYMNTS DATA: RETAIL BANKING SERVICES’ PARADIGM SHIFT STUDY – JANUARY 2021 

About: The January 2021, Retail Banking Services’ Paradigm Shift Report, PYMNTS examines how consumers choose to engage with their FIs when accessing information about various products and services, especially since the pandemic’s onset.

Read more at www.pymnts.com

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