The investors are welcoming the healthcare startups very well that the idea of fundraising for these startups have become more accessible. Recently, many startups have been raising billions of dollars as their capital funding. The number is increasing every month. It also proves the importance and needs of medical researchers to work efficiently. Still, people are coming up with new perspectives on existing ideas and new ideas in the area of healthcare. In this article, we will be discussing the concept of fundraising for medical startups and a few examples.
Fundraising For Medical Startups
In March 2019, healthcare startups raised around 1.5 billion dollars as venture capital funding, which itself was 50% down from the same month last year. By then, healthcare startups raised 2.9 million dollars in 152 deals. The previous year’s record was the best in the first quarter startups had up to 7.6 billion dollars. Even in the first quarter of 2019, they raised 6.8 billion dollars from venture capitalists only.
An excellent example of such fundraising is the Biotech startup named Beam Therapeutics. They raised around 135 million dollars series B from different investors. The list of investors includes Arch Venture Partners, Omega Funds, Alphabet’s GV, F-Prime Capital Partners, and many more. The startup launched in 2018, focuses on using CRISPR to improve the accuracy of genetic medicines. One of the co-founders is from Harvard Medical School, which adds to their advantage. However, there are a lot of other startups that do not include a team with a more significant background and are still running successfully.
More Examples And Fluctuations
The investors are also confident in the field of robotic surgery. According to Pitchbook, a company named Think Surgical raised almost 134 million dollars for its capital. The California-based company is involved in the sales of Orthopaedic robotic surgery systems. These systems help the surgeons when they are working on hip replacement procedures. Similarly, MacuLogix is another startup working on improving the ability of ophthalmologists to find out macular degeneration, and they raised close to 39 million dollars.
There is also a perspective of the investors, which is cynical about investing in the healthcare area. They think that healthcare startups are born when the Founder is working in an educational institution or healthcare space. When they work in a place that provides state of the art devices, it becomes easy while it is not the same case when they start something on their own. They plan to bring an institution that fosters innovation and still adheres to the legal landscape. It is not quite possible, and eventually, it leads to ownership of maximization and financial returns.
When it comes to technology companies in their early stages, the challenges they face and their development stages are entirely different. The early-stage companies have the money and the time with a goal to unlock the product-market strategy. It is one reason companies need maximum flexibility to improve. From the investor perspective, the healthcare space seems complicated, and one with higher risks. So, most of them, unless and until the idea is industry-changing, do not take the risk of investing there. They do so considering all the additional hurdles. However, some startups are changing the perspective and making it easier for investors to believe in the industry.