Issue link: https://beckershealthcare.uberflip.com/i/976338
28 JOINT VENTURES 10 statistics on US venture capital funding in healthcare By Eric Oliver P wC and CB Insights published their Healthcare MoneyTree re- port providing an overview of U.S.-based venture capital fund- ing in the healthcare industry for the fourth quarter of 2017. Here are 10 statistics from the report: 1. Total U.S. healthcare investment increased 25 percent in 2017. A total of $14.4 billion was invested through 748 deals. Of that funding, 30 percent was raised in 20 megaterm deals. 2. e average venture capital investment increased from $10 million in 2012 to $19.3 million in 2017. 3. In the fourth quarter, approximately $4 billion was invested in the U.S. healthcare sector. ere were a total of 182 deals, which was down from the 184 deals in the third quarter. 4. Concerning fourth quarter investment by stage: • 13 percent were seed-stage investments • 28 percent were early-stage investments • 29 percent were expansion-stage investments • 11 percent were late-stage investments • 19 percent were other kinds of investments 5. Concerning fourth quarter median deal size by stage: • $1.2 million during the seed investments stage • $9.1 million during the early-stage investments stage • $15 million during the expansion-stage investments stage • $22 million during the late-stage investments stage 6. Biotech-related industries saw the largest increase in investments, rocketing up 43 percent from the third quarter of 2017, while medical device equipment investments fell 38 percent quarter over quarter. 7. e biotech industry continues to see the highest rate of invest- ment, holding the top spot for three consecutive quarters. 8. New healthcare investment in New England companies is boom- ing, with an 141 percent increase quarter over quarter, while Silicon Valley investment decreased 12 percent quarter over quarter. ree of the megaround investments were in New England, which raised the region's total investment by $539 million. 9. However, Silicon Valley still tops the rest of the U.S. in terms of deal value in 2017. Approximately $5.30 billion was invested in Sili- con Valley related to healthcare. New England was second with $3.74 billion in investments. 10. ese five companies received the the largest deals in the fourth quarter: • Ginkgo BioWorks — $275 million • Precision Medicine Group — $275 million • Grail — $238 million • Cullinan Oncology — $150 million • Semma erapeutics — $114 million n Private equity in the ASC market — Key transactions & 2018 outlook By Scott Becker and Laura Dyrda D espite the overall lack of total growth in the ASC market, the interest of private equity in ASCs remains very significant. In the past couple of years, we've witnessed several differ- ent transactions: 1. This past year KKR invested in growth-oriented Cov- enant Surgical Partners. 2. Physicians Endoscopy remains partially owned by a PE firm after several growth investments over the years. 3. Bain Capital bought out the stake of H.I.G. Capital in Surgery Partners. Surgery Partners has rolled up National Surgical Healthcare and Symbion and others over the years. On the seeming flip side, Welsh Carson exited United Sur- gical Partners International after several years when USPI sold in part to Tenet. AmSurg, still a major ASC operator, transformed itself to become less dependent on ASCs with major acquisitions and mergers in the physician practice area. Surgical Care Affiliates, once private equity funded by TPG, sold itself last year to OptumHealth. There is also new and significant interest in the ASC world via PE firms investing in practice management platforms in ophthalmology and orthopedics where the practices are also tied to ASCs. After a long run in ASCs, there remains a ton of interest in the area. n