Here are some key takeaways from our webinar on recent university startup financing trends.
- Decrease in Funding: During the webinar, we discussed a decline in funding in certain sectors. For example, there has been a significant decline in bio-pharma investments from 2021 to 2022, with a drop in funding from $32 billion to $24 billion. Health tech investments have also seen a decline from $33 billion to $13 billion during the same period.
- Resilience of Medical Devices: Despite the decline in overall funding, medical device investments have shown resilience, with relatively stable deal sizes and continued interest from venture capitalists.
- Shift in Investor Philosophy: Institutional investors are becoming more willing to take risks on startups that haven’t yet achieved product-market fit. This shift in philosophy may impact the number of deals and the type of startups receiving funding.
- Impact of IPO Market: The IPO market for biotech companies experienced a significant slowdown in 2022, with a decrease in the number of IPOs and a decline in exit values. Investors are demanding more progress before funding the next round, leading to fewer deals.
- Importance of Data Quality: The quality of data and the stage of development have a significant impact on the value of biotech companies in the public markets. The market tends to value technologies that are further along or de-risked.
- Hype Cycles: We discussed hype cycles which are increased investment activity in a particular sector area. There are historical patterns which can correlate “hype” of an emerging technology with significant funding and valuations, however perceived value in the private markets may not correlate to the public market.
- Climate Tech Investment: There has been a rush of investment in climate tech, specifically in companies focused on clean energy, energy storage, and carbon capturing technologies. In 2021 growth in university climate tech investments outpaced that of the broader climate tech ecosystem by more than 3x.
- Market Correction and Private Market Impact: The private markets have been affected by the public market correction, resulting in a decline in early-stage funding. The impact may continue moving forward, and there may be a concentration of investments in specific areas of interest, e.g. climate tech.
For more exclusive financing data around university startups, watch the full webinar below.