Venture Capitalists Flock to Healthcare Startups

Venture capitals continue to find the healthcare sector appealing. During the first half of 2018, healthcare startups received $10.6 billion in investment from VCs, according to the newest MoneyTree report from PricewaterhouseCoopers and CB Insights.

That total is the highest in 23 years, and represents roughly 23% of the total VC capital investment. If the pace continues, the healthcare sector is on pace to exceed the $15 billion raised by healthcare companies for all of 2017.

During the second quarter, the healthcare sector lagged only the Internet sector in terms of attracting VC capital. That period was the third in a row in which there were more than 30 “mega rounds”—described in the report as financings of $100 million or more. The industry is poised to beat all of 2017 in that category.

So far, the largest healthcare VC deal this year has been the $500 million investment in Moderna Therapeutics Inc. The Cambridge, MA-based drug developer received capital from eight different VC sources. After the Moderna deal, the next largest deals were Allogene Therapeutics and GRAIL, both of which raised $300 million.

Over the past year or so, VC investment in medical facilities and services has averaged roughly $330 million per quarter.

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