Medical devices have consistently garnered the largest share of VC deals and funding within the healthcare sector over time. Surgical devices, in particular, have been a preferred destination for investors.

Medical device companies were the major winner of venture capital investment to the healthcare sector as we recently highlighted in our 2012 Venture Capital Activity Report.  We wanted to take a closer look into the financing activity to the medical device industry, especially as Q4 proved to be the strongest quarter for healthcare in both VC deals and dollars.

The charts below, borrowed from our VC Report, show medical devices and equipment snagging the top spots for both deals and dollars, with nearly half of all deal volume in healthcare going to the medtech space.

 

For some time, our data has been suggesting medical device dominance for healthcare VC so this is not a passing trend. The charts below show five quarter trend for deal activity in both number of deals and percentage of deals that went to medical devices versus all other industries within healthcare.

 

 

Medical devices consistently make up no less than 35% of all deals within the healthcare sector and closed 2012 with over 40% of deal share.  VC investment dollars for medical devices as compared to other healthcare industries also has consistently taken the largest portion of healthcare funding as illustrated below.

 

 

As medical devices is a broad category, we peeled back the funding a bit to see which sub-industries within medical devices are garnering most of the funding.  Looking specifically at Q4, surgical devices led the way with $197M in funding dollars. Therapeutic devices and imaging & diagnostic equipment came in second and third snagging $111M and $77M in funding, respectively.

 

The five quarter trend of medical device deals by sub-industry paints a similar picture, with surgical devices consistently landing the most leads.

 

 

Therapeutic devices and imaging & diagnostic equipment swapped places for the second and third highest deals in Q4 with therapeutic devices seeing less deals in Q4 than imaging & diagnostic equipment but landing more funding dollars in line with larger average deal sizes.

  • Anonymous

    Would be interesting to see how these financings are broken down respective of series … seems deal volume is up, but early stage deals still lagging. What does the data show?

  • Murali Apparaju

    Is this tilt towards device & equipment an indication of GPs losing faith in innovation?

  • http://www.cbinsights.com/ CB Insights

    Your question suggests medical device companies being funded are not innovative?

  • http://www.cbinsights.com/ CB Insights

    The stage breakdown is in our 2012 VC Activity Report which is available to subscribers of CB Insights on our Research tab.

  • Murali Apparaju

    apologies…. I meant ‘innovation in drug discovery & development’… my blog post @ http://vishrasayan.blogspot.in/2013/01/drug-discovery-unable-to-attract-big.html elaborates on that….

  • http://www.cbinsights.com/ CB Insights

    Thanks for the post. Will take a look and see if there is anything we can add to the conversation. Of course, would appreciate a link to our Q4 2012 VC report research brief. https://www.cbinsights.com/blog/trends/venture-capital-2012-report

    Thanks for the writeup. Look forward to seeing your perspective.

  • Murali Apparaju

    have provided a link to the report & mentioned the same too..