The size of investment deals in healthcare devices and supplies saw a 148pc jump in 2018 as new technologies brought innovation to the sector across Europe, according to a new report on European venture capital from Pitchbook.
The surge of investment comes despite “stagnant growth” across the space in recent years, as developments in key medical areas such as surgical devices attracted significant capital during the year.
In June, Cambridge-based robotics company CMR Surgical raised £75m from investors. The company is the creator of a robotics system called Versius, which has been designed to assist surgeons with keyhole surgeries. It plans to use the investment to fund clinical trials of Versius.
Insightec, a private medical device company in Israel, secured £108.8m in a series E private equity round last January.
Its plans to develop ultrasound solutions for noninvasive surgical treatments proved to be a worthwhile prospect for venture capital funds such as Koch Disruptive Technologies, a subsidiary of US conglomerate Koch Industries.
The healthcare industry has seen a surge of interest as new technologies being introduced in the sector aim to improve treatments for patients, while reducing the costs of various operations and treatment plans for healthcare providers.
Christoph Ruedig, partner at Albion VC, the technology investment arm of Albion Capital, believes some of the uptick of investment in hardware-based medical technology may have come from a general increase in venture capital funding last year.
“I think on the med-tech side, it’s a more mixed picture generally. I think med-tech as an investment class in venture capital has suffered quite a lot over the last 10 years,” he said.
“CMR [Surgical] is certainly one of the exceptions, that is a very interesting company of course. Great companies with great technology always manage to raise capital. That can produce outliers and skew the numbers for the entire year.”
The health tech sector is likely to see more of a boost from companies developing digital solutions in the health sector due to the greater scalability of software businesses, Mr Ruedig added.
The wider findings of the report indicated “fewer but larger deals” as investors shift towards later-stage funding.
According to Cameron Stanfill, an analyst at Pitchbook, the growth in deal value was “assisted by above average deals but was not purely due to a few giant outliers”.
“The €10m – €25m size bucket made the largest year-on-year deal value increase. Deal count declines extended into another year, especially in the earlier stages of VC, as larger check sizes have pressured investors to be more selective,” he said.
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