The medtech venture capital market saw a strong rebound in the first quarter of 2024, with total VC investment reaching $3.3 billion according to PitchBook’s latest report. While deal volume remained historically low, investors piled into high-quality companies, signaling a focus on backing the most promising opportunities.

The largest deal went to early cancer detection startup Freenome, which raised an impressive $254 million late-stage round led by Roche Venture Fund and Bain Capital Life Sciences. Other notable deals included rounds for companies like Impulse Dynamics, Mainstay Medical, Alamar Biosciences, and Medical Microinstruments.

The $3.3 billion invested represents a level not seen since Q4 2022 and is a positive sign after a challenging few years for medtech fundraising. However, it still lags the quarterly highs above $6 billion seen in 2021 during the VC boom years. Looking at the top medtech companies that have raised venture funds, Chicago’s Tempus tops PitchBook’s list of top VC-backed medtech companies with $1.4 billion raised to date.

Leading the way in Q1 were venture firms Gilde Healthcare and Arboretum Ventures with three deals each. Other active investors included the prolific Khosla Ventures with two investments. Cardiovascular companies attracted over $1.5 billion in the first three months of 2024, putting that category on pace to exceed last year’s strong numbers.

While the funding environment showed resilience, exits remained difficult with just a handful of M&A deals and no sizeable IPOs in Q1. The public listing for surgical implant company Autonomix raised just $11.1 million. The long-awaited resolution of Illumina’s divestiture of liquid biopsy firm GRAIL may provide a boost to public markets later in 2024.

Looking ahead, the report suggests two emerging areas ripe for investment – whole-body scanning and cardiac arrest prevention/treatment. With public valuations stabilizing and pockets of rising valuations in some sectors like medical devices and consumer health, the medtech market could continue gaining momentum through 2024 if the economic environment cooperates.

Overall, Q1 represented an encouraging start to the year as VC investors doubled down on backing high-potential medtech innovators. While challenges remain, the quality focus could pay dividends for the most promising companies down the line.

This article was originally published on iBIO NewsBrief. Gain a head start on your day with iBIO NewsBrief. Subscribe to receive top industry headlines delivered straight to your inbox.

X