Healthcare Investments and Exits Report 2015


Trends in Healthcare Investments and Exits

Venture Healthcare Investments and Returns Skyrocket

Silicon Valley Bank’s Trends in Healthcare Investments and Exits analyzes the fundraising, investment, M&A and IPO activity of private, venture-backed biopharma, medical device and diagnostic/tools companies. Report author Jon Norris also gives his annual forecast of what’s likely to happen this year.

Healthcare is hot. Rebounding investor confidence is speeding up the fundraising-to-exit cycle and freeing up more capital to invest. For the second consecutive year, the healthcare venture industry produced exceptional IPO and M&A exit activity with accompanying substantial returns. What’s different this year is the growing number of non-VC investors who are flocking to companies preparing to go public, providing “top up” financing and supporting a swell of successful IPOs. As our analysis also shows, capital efficiency is key to positive returns and serves as the underpinning of soaring exit multiples in big exit M&A activity.

Among the findings:

  •     Healthcare venture fundraising surged 56 percent over 2013, reaching its highest level since 2008, signaling that confidence in the industry is very high.
  •     Healthcare venture investment grew 30 percent over 2013.
  •     The number of IPOs more than doubled over an already strong 2013, hitting a 10-year high.
  •     Potential distributions from VC-backed IPOs and big exit M&A increased 60 percent over 2013.
  •     SVB predicts the strong fundraising and investment environment to fuel the cycle for another few years, but we expect IPO activity in 2015 to dip slightly.

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