Thanks to COVID-19, health funds are breaking records in 2020

• Global healthcare investments hit record highs last year with an equity financing of $ 80.6 billion in more than 5,500 transactions, according to a new report from market analyst CB Insights.

• The acceleration has been particularly acute in digital health, an arena that generated unprecedented interest among investors during the coronavirus pandemic. Global digital health equity finance hit an all-time high of $ 26.5 billion in 2020.

• Loans have grown quarterly for the past year before peaking in the third. Trading activity declined 13% quarterly in the fourth quarter, a trend that has shifted to the booming digital healthcare industry. Funding and transaction count for digital healthcare companies decreased 2% and 21%, respectively, in the fourth quarter compared to the third quarter.

The coronavirus pandemic has exposed health care inefficiencies in the United States. Payers, providers, and patients are increasingly turning to technology for access to treatments under the friendly Washington regulation, generating exponential market interest worldwide. At the same time, the aging of the US population and continued consumption have created new market opportunities for more experienced players.

According to the CB Insights report, the global increase in healthcare investment has been in North America, Asia, and Europe, with funding increasing sharply year on year.

In addition to digital health, niche sectors such as mental health and women’s health have seen significant increases in transactions.

Mental Health posted a record $ 2 billion in funding last year, with a 30% increase in the fourth quarter alone, largely driven by startup deals. However, the number of transactions decreased compared to the third quarter.

Similarly, women’s health companies saw a record number of transactions last year of 239. Around 62% of these were startups, which suggests that the young industry is on the verge of a boom. ` New avalanche even after the coronavirus pandemic has been controlled, experts say.

However, the proportion of all healthcare contracts targeting early-stage companies has steadily declined since the third quarter of 2019. This also continued in the fourth quarter, in which a comparable proportion of higher transactions was recorded.

Total funding for women’s health organizations was $ 521 million in the fourth quarter, slightly less than in the third quarter.

Dollar funding reached record levels in many healthcare sectors in the fourth quarter, although the number of transactions declined. AI companies, for example, posted a new funding record of nearly $ 2.3 billion in the quarter, driven in large part by a handful of mega-rounds of vendor genomics and workflow optimization, though deals fell. $ 19 compared to the third quarter under diminished.

In telemedicine, companies raised a record $ 3.3 billion in funding in the fourth quarter, despite transactions falling 32% from the third quarter.

Additionally, funding for genomics companies reached a record $ 2.2 billion in the fourth quarter, although deals also declined.

In cybersecurity, the fourth quarter was the second-largest funding quarter in the last three years. Similarly, medical device startups raised nearly $ 6 billion in the fourth quarter, even though deals fell 25%.

Part of that can be explained by a recent mega-round raise of $ 100 million or more. CB Insights counted 187 mega-rounds in 2020, another record, and more than a third took place in the fourth quarter.

The largest round in the fourth quarter was an $ 800 million donation in November to Resilience, a company that develops products for biopharmaceutical manufacturing technology, from a group of investors that includes Google. The amount was offset by a $ 700 million funding round in December for Verily, the subsidiary of Alphabet Life Sciences.

The fourth quarter also saw numerous exits from digital health, as well as a significant number of mergers and acquisitions. In the medical devices area, for example, outbound activity reached a total of 64 outlets, the highest level in more than three years.

Specialty procurement firms played a bigger role in the fourth quarter, particularly in digital health exits. The merger with SPAC is an increasingly popular avenue for companies seeking to enter public markets. Examples of this are telemedicine player Hims & Hers, device maker Butterfly Network, and medical documentation company AugMedix, which, unlike conventional IPOs, went public through SPAC in the fourth quarter.