• Medical device financing reached a new record in the third quarter, increasing 63% over the previous year. For the first time, it reached $ 5 billion in the CB Insights dataset.
• Investment in robotic surgery startups was one of the main drivers of the increase. Analysts listed Medtronic’s progress and agreements on neuromodulation and neurosurgery devices for diabetes, among other medical device highlights for the quarter.
• The large quarter of investment in equipment is part of a further increase in healthcare activity. CB Insights has also been tracking telemedicine and digital health funding cases, in large part due to the increase in the number of companies raising funds worth more than $ 100 million.
At the beginning of the pandemic, there were indications that the crisis could restrict access to capital. Consulting firm EY saw its medical technology venture capital funding drop 22% over a 12-month period, in part due to a sharp decline with the spread of the novel coronavirus in the second quarter. However, the CB Insights report for the third quarter is much more optimistic.
The value and volume of medical device transactions increased sequentially and year-over-year during the third quarter, with companies closing 478 transactions valued at $ 5.1 billion. The median value of the transaction for the last 11 quarters was $ 3.4 billion. A large number of transactions was also a new record.
CB Insights has included telemedicine deals in its digital health data and has broken it down for separate analysis. Analysts tracked telemedicine deals worth $ 2.8 billion, up 72% from the second quarter. The jump was led by five major deals, led by the $ 275 million investment in VillageMD, which accounted for more than 30% of all telemedicine funding in the third quarter.
CB Insights identified three trends in its analysis of business for medical devices in the third quarter. Analysts highlighted a series of robotic surgery deals led by $ 77 million raised by PRECEPT BioRobotics, maker of a robotic system for water ablation therapy. The business intelligence firm also highlighted early-stage investments in Monteris Medical, Vicarious Surgical, and NDR Medical Technologies.
Analysts have selected new neuromodulation devices as a second strength. Leaders in neuromodulation blamed the industry downturn last year for a lack of innovation. CB Insights sees signs of a resumption of innovation, signaling funding from Neurovalens and updates from SetPoint Medical, Spark Biomedical, and Synchron to support the case.
Medtronic, a leader in neuromodulation that has slowed down over the past year, is at the center of another CB Insights quarterly highlight. Analysts identified Medtronic as an active investor and buyer in the third quarter when they reached agreements to acquire Medicrea and Companion Medical, as well as to invest in Sinovation and Triple Jump.
Other sections of the report describe new levels of donation for other parts of the general medical device industry. The digital health sector had an exceptional quarter with 502 transactions totaling $ 8.4 billion. CB Insights had never reported a quarter of $ 6 billion or more before, last seeing a quarter of $ 5 billion in the first half of last year.
The increase in the total value of transactions occurred despite a slight increase in volume due to the increase in large late transactions. CB Insights tracked 23 digital health outlets in the third quarter. In the previous year, there were only 34 mega-grids. CB Insights’ definition of digital health was broad enough to cover investments in startups Freenome and Thrive Early Detection for liquid biopsies.