Healthcare companies livened up an otherwise lackluster IPO market in Q2 2013, with VC exit growth driven by 11 VC-backed healthcare companies entering the public markets. In total, 15 U.S.-based venture-backed healthcare companies went public in H1 2013 specializing in areas ranging from antiviral therapeutics to epigenetics to gene expression profiling.
Below is some data on these IPO exits and how long it took and how much capital was required to get these VC-backed healthcare companies to the public markets.
Of the VC-backed healthcare companies that went public in H1 2013, nearly 3/4 were focused on drug-related industries which include pharmaceuticals, drug discovery and drug development, respectively. Across all five industries, VC-backed healthcare companies raised an average of nearly $108M in funding before going public.
Healthcare companies that have IPO’d in 2013 tended to raise their financing over multiple rounds and a long period of time. The average time between first funding and IPO was 7.4 years. And on average, these companies raised 5.9 rounds of funding with a median of 4 investment rounds. The quickest pace from initial funding to IPO was 2.4 years. The longest? Over 12 years.
Interestingly, there wasn’t a clear correlation between amount of capital raised and valuation at the time of exit. While the highest exit valuation did go to the most heavily-funded company, 2 of the 5 VC-backed healthcare companies that saw the highest valuations at the time of IPO raised under $100M. VC funding to healthcare companies in 2013 also showed some strength so the sector is enjoying some wind in its sails, but as the data for the recent crop of IPOs highlights – the road to a public offering is typically long and requires patience by both management teams and the investors backing them.