VC Funding In 2013: Some Impressive Device Rounds, But Momentum Shifts To Biotech

Article preview from Medtech Insight - September 27, 2013

Medtech start-ups have closed on some impressive venture capital funding rounds so far this year, with the largest investments concentrated in a few “hot” technology areas. But the biotechnology industry garnered far more VC funding in Q2 than did the medical device sector, particularly with regards to early-stage funding.

VC Funding In 2013: Some Impressive Device Rounds, But Momentum Shifts To Biotech

Article preview from Medtech Insight - September 27, 2013

Medical device start-ups have closed on some impressive venture capital funding rounds so far this year, with the largest investments concentrated in a few “hot” technology areas, including companies with office-based sinus treatments, technologies aimed at obesity, neuromodulation devices, atrial fibrillation technologies, and transcatheter heart valve devices. However, according to the latest report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), the biotechnology industry garnered far more VC funding in Q2 than did the medical device sector, particularly with regards to early-stage funding.

Notable device rounds completed in the first half of the year included a $30 million Series D closed in March by Intersect ENT Inc., a developer of office-based sinus implants; a $27.3 million Series C round for BAROnova Inc., which is developing an implantable weight loss device; a $62.5 million Series C for JenaValve Technology GMBH, maker of the JenaValve transcatheter aortic valve implantation (TAVI) system; and a host of investments in neuromodulation device companies, led by Nevro Corp., developer of a high-frequency spinal cord stimulation device for chronic back pain, which closed on a $48 million Series C round in March. 

However, the latest MoneyTree Report from PwC and NVCA found that venture investment in biotech companies far outpaced medical device investments in the second quarter. According to the report, Biotechnology was the second largest sector (behind Software) in terms of dollars invested in the quarter, with $1.3 billion invested in 103 deals, an increase of 41% in dollars and 4% in deals compared with Q1. This renewed interest in biotech companies suggests that if the right opportunities crop up, “VC funding will pour into the sector,” commented Greg Vlahos, life sciences partner at PwC, in the report, entitled Biotech Boost.

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