PublishedJan.17,2024

HEALTHCAREINVESTMENTSANDEXITSANNUALREPORT2023

spottingtheGreenshoots

It’sbeensixmonthssincewebroughtyouourMid-YearHealthcare

InvestmentsandExits2023report,andIwishIcouldsaythatmuchhaschangedsincethen—thatinvestmentshaveroaredback,valuationsaresoaringandtheIPOwindowhasliftedwideopen.Unfortunately,we’re

notthereyet.

Whathasemergedisaclearerpictureofwherewe’reheaded.Strategiesthattookshapemonthsagoarenowshowingupinthedata,asinvestorswhooncefavoredlaterstagedealshavedecisivelypivotedtowardearlierdeals.Theresulthasmeantsmallerchecksspreadtoagrowingnumberofcompaniesatright-sizedvaluations.

WhileVCinvestmentinhealthcarehassettlednearhalfits2021peak,

dealcountshavereboundedinrecentmonthsandareapproachingtheirpriorpace.Ifinvestorswereeversittingontheirhandswaitingforclarity,thattimeisover.VCsarebacktowork.

Theirinvestmentsarecreatinggreenshootsofoptimismacrossthespectrumofhealthcareinnovation.Promisingcompaniesarebeingfundedatratesthatapproachorevenexceedhistoricnorms,andtheadventofgenerativeAI

technologyoffersimmensepossibilityforinnovativehealthcarefounders.

Butthechallengesofthecurrentmarketremainsignificant.Ageneration

oflate-stagecompaniesthattookhighvaluationsatthepeakoftheVC

boomnowfaceanuncertainfuture.DozensorevenhundredsofIPO-ready

JackieSpencer

HeadofRelationshipManagementfor

LifeScienceandHealthcareBanking

jspencer@

vbBancknvaley

ADivisionofFirstcitizensBank

companieshavelimitedfundingoptionsoutsideofapublicexit.Forthese

companies,apublicmarketturnaroundcouldn’tcomesoonenough.

Lifesciencecompaniesarelessaffectedbytheslowermarketiftheyhave

strongclinicalresults.Biopharmacompanieswithfavorableclinicaltrialsare

findingplentyofinterestamonginvestorsandachievingstrongstep-up

valuations.Thestickinesswe’veseeninbiopharmareflectsthelongerterm

perspectivemanylifescienceinvestorstake.Fewertouristinvestorsenter

thisarena,andtheLPsthatinvestinhealthcaretendtobemoreimmuneto

marketwhims.Thatrealityishelpingtobolsterfundraising.

Whiletech-focusedVCinvestorsarestrugglingtoraisenewfunds,

healthcareinvestorshavefaredwell.USinvestorsraised$19Binnew

health-specificfundsin2023,thethirdhighestyearonrecord.Growthin

promisingareassuchaswomen’shealth,AI-enableddiagnostics,drug

discoveryandpersonalizedmedicinearereasonsforimmenseoptimismin

healthcareinnovation.

Aswelooktotheyearahead,weunderstandthatmanycompanieswill

continuetofacechallenges.Theresetnowwashingthroughtheindustry

willtakeitstoll.Butifthisprocesscreatesarealitymoregroundedin

fundamentals,wherepositiveandsustainableoutcomesarepossible

formorecompaniesinthelong-run,thenmaybeitwasworthit.Afterall,

there’snothingmoreirrepressiblethanthepowerofagoodidea.

2

HEALTHCAREINVESTMENTSANDEXITSANNUALREPORT2023

04HealthcareMarketHighlights

07FundraisingandInvestment

13InvestmentbySector

18Spotlight:AIinHealthcare

21HealthcareExits:M&AandIPOTrends

vbBancknvaley

ADivisionofFirstcitizensBank

3

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT20234

HealthcareMarket

Highlights

NewDealson

theBlock:

$250Macquisition

WestStreetLife

SciencesFundI

$650Mfundraising

Healthcareinvestors,foundersandstakeholdersrecentlygatheredforaweekofhealthcareconferencesinsanFrancisco.

Herearesomeofthemostnotabletalkingpointsandhighlights.

DataastheLifebloodofInnovation

Youhavetonavigatea3Dspaceif

youwanttobesuccessfulin

predictivesimulationandmodeling.Thatrequiresdata,itrequires

algorithms,anditrequirescompute.”

FrankO.Nestle,M.D.

GlobalHeadofResearch&Chief

ScientificOfficer,Sanofi

Goodclinicaldataarealways

importantforcreatingmomentum.”

AlessandroMaselli

President&CEO,Catalent

Johnson&Johnson

=AMBRX

$2Bacquisition

Almorethana'NicetoHave'

AIgivestheopportunitytomove

awayfromtheartisanalcraftofdrugdiscoverytoanengineeredprocess.”

RayPressburger

GlobalLifeScienceLead,Accenture

Overthelastyearwehavemovedtoaviewwherewesay‘AIisactuallyanecessity’[forunderstanding

disease].”

Dr.MatthiasEvers

ChiefBusinessOfficer,Evotec

DriversofM&ADealmaking

?Biopharmacompaniesfocusedonlargepopulationcategoriessuchas

obesity,cardiovascular,and

autoimmunediseases,arelikelytoattractacquisitioninterestin2024.

?Forlate-stagerarediseaseassets,interestisgrowingfrombuyersinEuropeandAsia.

?Exitopportunitiesmoreplentifulforcompanieswithstrongclinicaldata.

$680Macquisition

vbBancknvaley

ADivisionofFirstcitizensBank

Note:QuotesgatheredfromremarksattheJPMHealthcareConferenceJan8-11,2024.Theywerelightlyeditedforclarity.

Source:JPMHealthcareConferenceandSVBresearch.5

Investments

Investmentvolumeshaveleveledoffoverthepastfourquarters,settling55%belowtotalsseenin2021.However,thepaceofdeploymentispickingup.Dealcountsaredownjust11%fromthe2021peakand

gainingspeedasdwindlingrunwaysforcefounderstoacceptlessfavorableterms.

Fundraising

USinvestorsraised$19Bfornewhealth-focusedVCandgrowthfundsin2023,

thethirdhighestamountforanyyear.

Thismaysignaloptimismthatdeployment

willpickupasinflationeasesandthe

Fedpausesratehikes.Weexpect

fundraisingtobestrongagainin2024.

Exits

Theexitmarketremainstightaslate-

stagecompaniesgrapplewithvaluation

overhang.IPOswereflatvs2022withM&A

activityfavoringacquirersasevidencedby

asurgetheshareofundiscloseddeals.

WemayseemoreIPOsin2024aspublic

marketsadjusttohigherinterestrates.

Healthtech

Companiesarestillrecoveringfromthe

overabundanceofinterestreceivedduringthepandemic,withinvestmentdown33%from2022.Laterstagecompaniesface

challengesgrowingintoloftyvaluations,

manyofwhichweredecoupledfrom

fundamentals.Acquisitionsremainsteady,thoughtherearefewerdiscloseddeals,

reflectingthestrainedenvironmentthatmanyoftheseoncehighlyvalued

companiesnowfindthemselvesin.

Biopharma

Companieswithstrongclinicalassets

arestillfindingfundingtraction,despite

headwinds.Promisingdevelopmentson

thehorizoninclude:RNA-basedtherapies,theGLP-1classandADCs.Whileexits

aredepressedfromhistoricnorms,we

saw19IPOsthisyear,asignthattheIPOmarketcouldbebitingagain,thoughIPOsarelargelyreservedforcompanieswith

morerobustclinicalvalidation(phaseIIandbeyond).

Dx/Tools

Afteragangbuster2021andmodest2022,diagnosticsIPOscametoagrindinghaltin2023.Thismarksthesector’sfirstyear

since2016withnoIPOs.Abrightspotin

privatediagnosticsinvestmentsisthetotalcapitalinvestedinseed/SeriesA

companieswhich,whileshortofthepeakin2022,farexceedspre-pandemiclevels.Thecontinueddevelopmentof

personalizedmedicinewilllikelybenefitthissector.

Device

Giventherelianceonoutpatient

procedures,themedicaldevicesectoris

stillworkingthroughknock-oneffectsof

thepandemic,includinghaltedprocedures

anddisruptedsupplychains.This

manifestedasatoughyearfordeviceexits

whentotalexitvaluesareattheirlowest

pointsince2017.Investmentshavefared

relativelywell.They’redown25%from

2022,whiledx/toolsandhealthtechare

down42%and33%,respectively.

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT20236

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT20237

Fundraising

andInvestment

30000

25000

20000

Defyingatrendintheoverallinnovationeconomy,

fundraisingwasabrightspotforhealthcarein2023.US

investorsraised$19Bforhealth-focusedventureand

growthfunds,thethird-highesttotalforanyyearandjusta14%decreasefromlastyear.Whiletech-focusedVCs

arestrugglingtoraisenewfundingamidtheVCdownturn,healthcareinvestorsarerefillingtheirreserves,hopingtomaximizetheirupsidepotentialasvaluationsdrop.

Promisingly,theFed’srecentmentionofpotentialinterestratedropsin2024mayspeedupadditionalfundraising.

Fourteenfirmsraised$1B+fundslastyear,butthatfreshcapitalcouldsitonthesidelinesforawhile.Thefrenziedsenseofurgencywesawin2021islargelygone,giving

investorsmoretimetofocusondiligence.Withvaluationsstillsettling,investorsarecuttingsmallerchecksand

stretchingtheirfundsfurther.Firmsthatfocusedonlaterstagedealswhenthemarketwashotarenowturning

theirattentiontoearly-stagedeals,whicharemore

shelteredfrompublicmarketvolatilityandmayhave

cleanercaptablesunencumberedbydownroundsor

out-of-reachvaluations.Inonenotableexample,Lux

Capitalannouncedtheypivotedtowardearlierstage

deals.In2021,Luxinvested44%oftheirdeploymentsintolaterstagecompanies.Now,thetrendhasflippedwith81%ofdealsgoingtoearlystagein2023.Thisshiftmaybeabellwetherforotherfirms.

AddedtotheMix

15000

10000

2012-2023

ClosedfundsFundsstillraising

$22B

$19B

$17B

$11B

$9B$10B

$8B$7B

$6B

$4B$4B

USVCfirmsraised$19Bforhealth-focusedfundsin2023,makingitthethirdbestyearforhealthcarefundraising.

$28B

$5B

201220132014201520162017201820192020202120222023

NotableFundswithAllocationstoHealthcare2

COWEN

Notes:1)USHealthcareVentureCapitalFundraisingdefinedasanapproximationofhealthcareinvestment

dollarstobeinvestedbyfirmsthathistoricallyinvestin+50%UScompanies.Estimatesbasedonanecdotal

conversationswithinvestorsandexpertanalysisoflastfunddealpace.2)Notablefundsbasedonlargest

estimatedallocationtoventurehealthcare.

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT20238

Source:PitchBookandSVBproprietarydata.

1643

1066

1083

936

815

801

668

658

theDeals

Thistimelastyear,investorsweremostlytreadingwater.

Dealcountsdroppednearly30%fromH12022to

H22022,asvaluationsreset.Today,valuationsremain

muted,butdeploymentsarepickingupasmoreinvestorshavecommittedtoanewstrategyofbackingearlierstagecompanies.AcrosstheUSandEurope,averagedealsizehasfallenfrom$35MinH12021to$24MinH22023.

Theseshiftsmaysignalstabilization.AfterarapiddeclinethatbeganinJanuary2022,VCinvestmenthasleveled

off,averagingaround$11Bperquarteroverthelastyear,aroughly55%declinefrom2021.Fromthegreatheightsoftwoyearsago,thatdropmayfeelextreme,butinthecontextofVChistory,we’rebackto2019levels.The

questiononeveryone’smindseemstobe:isthisareturntonormalorthestartofanew,morecyclicalnormal?

Whicheverthecase,thedaysofuncheckedup-and-to-the-rightgrowthexpectationsarelikelybehindus(fornow).

Investmenttrendsvarybysector.Healthtech,a

pandemicdarlingwithaninfluxoftouristVCinvestment,sawaspikeofcapitalduring2021buthasfailedtokeeppaceasvirtualcareandotherpandemictrendsrecede.

Biopharma,however,hasbeenlessimpactedbymarketvolatility.Companieswithstrongclinicalassetsare

generallyfindingenoughinvestmenttopursuethenextmilestone.

US,Euanduk

$60B

1489

1470

$50B

1283

1246

$40B

$30B

$20B

$10B

$0B

2018H1

2018H2

2019H2

2019H1

2020H2

2021H1

2020H1

2021H2

2022H1

2023H1

2023H2

2022H2

2021

2022

2023

Sectors($M)

US

EU&UK

Total

US

EU&UK

Total

US

EU&UK

Total

YoY

Change1

Biopharma

31,215

6,924

38,138

24,997

4,830

29,827

17,003

4,161

21,164

-25%

Healthtech

33,129

2,881

36,010

14,063

3,957

18,020

10,471

1,372

11,843

-33%

Dx/Tools

11,955

2,713

14,668

8,650

1,659

10,309

4,281

1,415

5,696

-42%

Device

6,691

2,383

9,074

7,091

1,572

8,663

4,723

1,239

5,962

-25%

Total

82,990

14,901

97,890

54,801

12,019

66,819

36,477

8,187

44,665

-30%

Note:1)YoYchangecalculatedfromJanuarythroughNovemberof2023andthesameperiodin2022.

Source:PitchBookandSVBproprietarydata.HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT20239

Dealcount(2022-2023)

Overall

Biopharma

Healthtech

Dx/Tools

Device

55

Gaingels

36

RACAPITAL

36

PLUGANDPLAY

10

PLUGANDPLAY

12

54

PLUGANDPLAY

33

34

Gaingels

9

10

47

Alumniventures

22

26

Alumniventures

7

7

Alumniventures

44

RACAPITAL

21

25

7

7

42

17

18

1OCAPITL

7

6

40

17

18

6

6

37

16

snofiventures

14

6

breyercapita

5

34

1OCAPITAL

14

Gainges

12

8VC

6

5

Note:1)Mostactivenewinvestorscalculatedasnew(first-time)investmentsinUS,EUandUKcompaniesfrom1/1/2022-12/1/2023.Datesoffinancingroundssubjecttochangebasedonadd-oninvestments.Additionalinvestorsnotlistedduetospacelimitations.

Source:PitchBook,conversationswithinvestorsandSVBproprietarydata.

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT202310

ActasLifelines

Thedaysofthevanityvaluationarelonggone.Nowit’sallaboutthespoon-feddeals.JustlikeanIVinthehospital,theseinvestments—oftenintheformofinsiderounds—keepcompaniesaliveuntiltheycanthriveagain.

Investorsareincreasinglyusinginsideandextension

roundstokickthecandowntheroadforcompaniesthatwouldotherwisefailorbeforcedtotakeadownround.

Togetasenseofthistrend,wedefinedspoon-feddealsaslaterstagecompaniesvaluedatorabove$20Mraisingaroundof$15Morbelow.Dealsinthisrangeareup

acrossallhealthcare.Nearlyhalfofalllaterstage

diagnosticsdealsarespoon-feddeals,upfrom27%in2021.Thespikeintheproportionofspoon-feddealsissimilarforhealthtechandbiopharma,butarelowerfordevices,whichalreadyhadahigherrateofspoon-feddeals.

Ingeneral,dealsizesaretrendinglowerascompanies

areforcedtodomorewithless,andinvestorsaremoreinterestedinearlierdealswithcleanercaptables.In

2023,VCdealslessthan$10Maccountedfor65%ofalldeals,upfrom50%in2021.Greaterscrutinyonpricingisalsoaffectingstep-ups,whichhavefallenbelowthe

pre-pandemicnormforallstages.SeriesCcompanies,whichweregettingamedian2xincreaseinvaluationin

2021arenowseeingonlya30%bump.Buteventhese

numbersarelikelyinflatedastheyonlyincludediscloseddeals,whichareashrinkingminorityofalldeals.

vbBancknvaley

ADivisionofFirstcitizensBank

-FedDeals1

2021vs2023

20212023

DeviceDx/ToolsHealthtechBiopharma

AllSectors

65%

Nearlytwo-thirdsofdeals

50%wereunder$10Min2023,up

fromhalfofallhealthcaredealsin2021.

23%

13%

8%

3%

15%

12%

5%

6%

41%

49%

46%

44%

42%

31%

29%27%

20%

$0-$10M

$10M-$20M

$20M-$30M

$40M+

$30M-

$40M

2023

2021

step-upsforHealthcarevcDealsbyseries2

MedianMiddle50%ofdeals

4.5x

4.0x

3.5x

3.0x

2.5x

2.0x

1.5x

1.0x

SeriesA

2.5x

2.3x

1.9x

1.8x

1.5x

20192020202120222023

4.5x

4.0x

3.5x

3.0x

2.5x

2.0x

1.5x

1.0x

SeriesB

2.0x

1.8x1.8x

2.0x

1.5x

20192020202120222023

4.5x

4.0x

3.5x

3.0x

2.5x

2.0x

1.5x

1.0x

SeriesC

2.0x

1.6x

1.6x

1.6x

1.3x

20192020202120222023

Notes:1)Aspoon-feddealisdefinedasadealthatis$15Morlessforlaterstagecompanywithapre-

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT202311

moneyvaluationatorabove$20M.2)Step-upsarethelatestpre-moneyvaluationdividedbytheprevious

post-moneyvaluationfordiscloseddealsonly.

Sources:PitchBookandSVBanalysis.

HealthcarevcDealcountsforseriesAandBeyond1

US,Euanduk

UndiscloseddealsDown/flatroundsUprounds

26%

37%

48%47%45%

7%

6%

6%

8%

9%

67%

57%

48%

45%

43%

20192020202120222023

Notable2023HealthcareupRounds

US,Euanduk

Step-Up2StageDealSizeSector

1.32x

SeriesC

$430M

Biopharma

1.52x

SeriesD

$323M

Device

1.49x

SeriesA

$300M

Biopharma

Generate:Biomedicines

1.19x

SeriesC

$273M

Biopharma

1.88x

SeriesA

$270M

Biopharma

1.05x

SeriesF

$260M

Healthtech

3.03x

SeriesB

$260M

Biopharma

1.81x

SeriesC

$255M

Dx/Tools

1.13x

SeriesC

$225M

Biopharma

Notes:1)Uproundsdefinedasdealswherethepre-moneyvaluationishigherthanthepriordeal’spost-moneyvaluation.2)Step-upmultiplecalculatedbydividingthepre-moneyvaluationonthecurrentventureroundbythepost-moneyvaluationontheprecedingventureround.

Source:PitchBookandSVBproprietarydata.

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT202312

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT202313

Investmentbysector

Seed/SeriesA

$3

00M

Laterstage

$430M

AI②LOSBIO

$2

45M

elevatebi

$401M

$2

15M

$300M

$1

45M

Generate:Biomedicines

$273M

$1

37M

$270M

養(yǎng)EyeBio

$1

00M

$260M

$6.5B

$6.7B

$8.1B

$5.8B

$6.7B

$6.0B

$4.7B

$3.6B

$6.9B

$6.4B

$12.6B

$11.3B

$5.6B

Investment

AgrowingbacklogofIPO-hopefulspressedagainstabarely-ajarIPOwindowaddspressuretoprivate

valuations.Competitionforfinancingisfierceas

investorsnavigateunclearpathstoexits.Pressureisespeciallyacuteatthelaterstages(SeriesBand

beyond),whicharedown30%vs.2022.Early-stageinvestment,moreshieldedfrommacroheadwinds,jumpedinQ2andQ3’23.Early-stageinvestmentwas

strongforcompanieswithAI-enableddrugdevelopment

—AI’spurportedabilitytocutcostsandspeed

developmentisloweringthecapitalbarriersforearly-stagebiopharmacompanies.

Thedramaticslowingofdealpaceisgivinginvestorstime

fordiligence.Investorsareincreasinglyfocusedon

sufficientrunwaytodrivecompaniesthroughmeaningfulclinicalmilestones.Butthebarhasbeenraised.FDA

denialshaverisentopeaklevelsin2023,andR&D

expenditurehasnotslowed.Whileearly-stageplatformcompanieshadaneasiertimeraisingfundsduringthe

market’speak,thependulumhasswungtowardless

riskyinvestmentsamidtheensuingpullback.Attimes,

thismeansthatveryearly,pre-clinicalassetsareless

attractivebecauseofhowlongtheycantaketolandin

theclinic.Brightspotsininvestmentweredrivenby

strongclinicaldevelopments:theGLP-1class,ADCsandthelandmarkapprovalofCRISPRdevelopeddrugfor

sicklecelldisease,Casgevy.

2020

$6.1B(281)

2021

$8.9B(353)

2022

$6.6B(297)

2023

$4.7B(218)

seed/seriesA

Q3Q4

Q1Q2

$2.2B

$1.3B

$1.4B

$1.2B

$2.2B

$1.9B

$3.0B

$1.7B

$946M

$848M

$1.6B

$854M

$1.2B

$1.9B

$2.3B

$1.9B

2020H12020H22021H12021H22022H12022H22023H12023H2

2023

2022

2021

2020

Medianseed/seriesAvaluations

Pre-moneyvaluationDealsize

$15M

$9M

$17M

$10M

$15M

$10M

$13M

$10M

TotalDollarsand(Deals)Largest2023Deals

Q1Q2Q3Q4

2020

$27.0B(699)

2021

$38.1B(908)

2022

$29.8B(812)

2023

$21.2B(626)

$9.1B

$7.9B

$8.6B

2020H12020H22021H12021H22022H12022H22023H12023H2

Note:1)Seed/SeriesAincludesfirst-timeinvestmentsfrominstitutionalorcorporateventureinvestmentin

theUS,EUandUKandanyfirst-roundinvestmentsequaltoorgreaterthan$2M,regardlessofinvestor.Dates

offinancingroundsaresubjecttochangebasedonadd-oninvestments.

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT202314

Source:PitchBookandSVBproprietarydata.

2020

$1.7B(220)

2021

$2.6B(399)

2022

$2.6B(432)

2023

$1.9B(386)

2023

$524M

$708M

$501M

$355M

$267M

$405M

$423M

$415M

$683M

$637M

$696M

$472M

$455M

$570M

$649M

$993M

2022

2021

2020

2020H12020H22021H12021H22022H12022H22023H12023H2

paradigm

$203M

$139M

$60M

$57M

$50M

$31M

2020

$13.4B(614)

2021

$36.0B(999)

2022

$18.0B(1062)

2023

$11.8B(844)

$1.3B

monogramhealth

$375M

$315M

$260M

$166M

$125M

$3.7B

$3.7B

2020H2

$3.0B

$3.5B

2023H1

$2.6B

$3.2B

2022H2

$3.2B

$2.8B

2020H1

$3.0B$2.3B

2023H2

$8.5B

$7.8B

$5.0B

$7.3B

$7.3B

$12.5B

$25M

$5M

$35M

$8M

$35M

$9M

$28M

$9M

Investment

Ifitlookslikeabubble,itmaypoplikeone,too.The

pandemicusheredinamassivewaveofinvestment,as

alleyesturnedtodigitalhealthcare,includingtheeyesoftraditionaltechinvestors.AtthepeakoftheVCboominH22021,healthtechcompaniesraised$20B.Twoyears

later,thathasdroppedroughly75%to$5B.OnegaugeofthedeclineisthedropinseedandSeriesAvaluations.

Whilemanysectorshaveseenstabilityinearly-stage

valuations,bolsteredbyaninfluxininvestorinterest,

healthtech’searliest-stagedealshaveseentheoppositetrendwithvaluationsdropping33%inthelastyear.Itmaytaketimeforthissectortoresetasmanyhealthtech

companiesthatraisedatlargevaluationsin2021aregrapplingwithlimitedoptionstoavoidadownround.Companiesfacemorescrutinousinvestorsandareworkingagainstheighteneddemandforstrong-uniteconomicsandpathstoprofitability.

Onebrightspotwithinhealthtechisvalue-basedcare

(VBC).CompaniesinthisspaceprovideVBCdirectly,orenableproviderstoadoptVBCmodels.Healthtech

companiesarefacingsuchchallengesthatthemeasureofsuccessischanging.Forlate-stagecompanies,evenstrongmetricsmayresultinaflatround.OneexampleisAledade,whichsecuredaSeriesFdealof$260Mata

1.05xstep-up.

seed/seriesAMedianseed/seriesAvaluations

Q1

Q2

Q3

Q4

Pre-moneyvaluationDealsize

TotalDollarsand(Deals)Largest2023Deals

Laterstage

Q1Q2Q3Q4Seed/SeriesA

H1

H2

2021

2021

2022H1

Note:1)Seed/SeriesAincludesfirst-timeinvestmentsfrominstitutionalorcorporateventureinvestmentin

theUS,EUandUKandanyfirst-roundinvestmentsequaltoorgreaterthan$2M,regardlessofinvestor.Dates

offinancingroundsaresubjecttochangebasedonadd-oninvestments.

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT202315

Source:PitchBookandSVBproprietarydata.

$8M

$3M

$10M

$4M

$10M

$4M

$9M

$5M

2020

$819M(111)

2021

$1.2B(187)

2022

$1.5B(200)

2023

$1.1B(185)

2023

$311M

$261M

$365M

$181M

$256M

$273M

$97M

$150M

$413M

$274M

$312M

$359M

$286M

$217M

$343M

$535M

2022

2021

2020

Q1Q2Q3Q4

2020

$10.9B(341)

2021

$14.7B(510)

2022

$10.3B(494)

2023

$5.7B(431)

Seed/SeriesA

Laterstage

$

90M

$255M

$

57M

$215M

$

51M

ASIMOV

$175M

$

50M

colsslc

$150M

EvolutionaryScale2

$

40M

$140M

$

38M

$131M

$36M

$103M

Investment

TheVCheadwindsthatemergedin2022onlyintensifiedin2023.However,fundamentalmarketdriversfor

dx/toolscompaniesremainedstrong,withencouragingclinicaldatareignitingthepromiseofpersonalized

medicineandadvancedtherapeuticmodalities.

Seed/SeriesAactivityremainedresilient,droppingfrom

themarket’speakbutremainingwell-abovepre-

pandemiclevels.ThisdatareinforcesmarketanecdotesthatSeriesAdealactivityrevolvesaroundtop-tierprofiles

withamixtureofveteranmanagementteamsandcompellingstoriesata“2023marketprice.”

WhiledxtestsandR&Dtoolssawnearly50%lossesinYoYinvestmentdollars,dxanalyticssawthesmallest

dropof34%.DxanalyticscompanieswithAI-drivendrugdiscoveryplatformswereabrightspot,asthey

meaningfullyacceleratetimetoclinicandcutcosts

acrossthedrugdevelopmentpipeline–aconcernthat’stopofmindnowascapitalefficiencyisimperative.Theyalsopartnerwithoftentimesdeep-pocketedpharma

players.WeexpectforAI-drivendrugdiscovery

companiestomaintainhighvaluationsandrobust

growth.Anotherbrightspotispersonalizedmedicine

(includingpersonalizedclinicaldecisionsupport),namelyArteraforcancertreatment,Viomeformetabolichealth,HeartflowforcoronaryarterydiseaseandRapidAIfor

strokes.

seed/seriesA

Medianseed/seriesAvaluations

Pre-MoneyvaluationDealsize

Q1Q2Q3Q4

2020H12020H22021H12021H22022H12022H22023H12023H2

Largest2023Deals

TotalDollarsand(Deals)

$3.3B

$1.4B

$2.8B

$3.4B

$4.5B

$3.6B

$3.1B

$1.6B

$1.5B

$858M

$2.0B

$1.0B

$1.8B

$3.5B

$3.7B

$3.5B

2020H12020H22021H12021H22022H12022H22023H12023H2

Notes:1)Seed/SeriesAincludesfirst-timeinvestmentsfrominstitutionalorcorporateventureinvestmentin

theUS,EUandUKandanyfirst-roundinvestmentsequaltoorgreaterthan$2M,regardlessofinvestor.Dates

offinancingroundsaresubjecttochangebasedonadd-oninvestments.2)Companydoesnothavelogoor

HEALTHCAREINVESTMENTS&EXITS|ANNUALREPORT202316

website.

Source:PitchBookandSVBproprietarydata.

2020

$950M(103)

2021

$1.3B(189)

2022

$971M(137)

2023

$684M(142)

$22M

$5M

2023

$133M

$255M

$174M

$173M

$82M

$95M

$229M

$334M

$348M

$219M

$319M

$321M

$304M

$283M

$224M

$413M

$8M

$30M

2022

$25M

$7M

2021

$27M

$10M

2020

Q1Q2Q3Q4

Seed/SeriesA

$60M

Laterstage

$323M

$35M

$165M

$32M

Distalmotion

$150M

$29M

$145M

$27M

$129M