Medical device VC cash plunged 13% in 2012
We heard all last year from industry insiders and startup CEOs that raising money for medical device companies was a tough racket. Now, the numbers back that up: In 2012, the medical device sector saw a 13% dollar-value drop from the year before and a 15% decline in the number of deals, according to the latest MoneyTree report.
According to the report from PricewaterhouseCoopers and the National Venture Capital Association, the industry pulled in $2.4 billion on 313 deals, and, in a development alarming for startups, much of the decline was due to a lack of first-time financings, which were the fewest they've been since 1995.
That said, the medical device world closed the year impressively. In the fourth quarter, the industry tracked a 32% increase in dollar value and 9% jump in volume over Q3, according to the report.
Those Q4 results jibe with the conventional wisdom at last week's J.P. Morgan Healthcare Conference, where CEOs and analysts told us that fretting over the November election and December fiscal cliff circus was stifling investment and slowing down pipelines.
Now, with a grisly 2012 in the books, many of the medical device CEOs we've talked to are at least cautiously optimistic that 2013 will be more promising for fundraising. At the same time, no one's forecasting a return to the halcyon days of the pre-downturn market. Instead, startups say the companies most successful at fundraising are those with devices and diagnostics that are not only safe and effective--they must be reasonable and necessary, too.
- read the report
Special Report: Top 10 VC device deals of Q3 2012