U.S. Health Tech Startups Raise Record $31.9B So Far This Year

Global VC investment into health tech startups reached a record $51.3 billion so far in 2021, with U.S. firms taking in the bulk, raking in $31.9 billion.

Globally, the $51.3 billion raised this year is 280% compared to what was recorded throughout the whole of 2016, according to a new report by Dealroom.co for London & Partners.

In terms of investment, China came in second, with Chinese health techs bringing in $4.1 billion, while the United Kingdom came in third with $3.8 billion. India came in fourth, with health tech firms raising $1.9 billion in funding from VCs in 2021. Since 2016, VCs have poured in $4.4 billion into the Indian health tech industry. 

On the other hand, U.K. health tech investment has risen from $420 million in 2016, an increase of nine times, while U.S. investment has increased by 3.4 times, it was reported.

U.S. leads the way

Laura Citron, CEO at London & Partners, said the “findings demonstrate that the U.K. and U.S. are leading the way for innovation in this sector and tech hubs like London, the Bay Area, and New York are key partners for collaboration. The U.K’s Golden Triangle is home to world-class universities for life sciences and medicine, a deep research and development landscape, and dedicated funding and government support. These factors make London, Oxford, and Cambridge a world-leading innovation hub for life sciences and health tech.”

U.K. health tech growth has been concentrated around the so-called “Golden Triangle” of London, Oxford, and Cambridge, a region home to five universities in the top 25 for life sciences and medicine. Europe, on the other hand, is now the fastest-growing region globally for health tech with European health tech startups raising $8.1 billion in 2021, up from $1.7 billion in 2016 and growing at a rate of 4.9 times, compared to North America at 3.5 times and Asia 3.7 times, a report by the TechCrunch website said.

“Cities like Mumbai and London are two of the fastest-growing hubs globally for health tech investment, suggesting there are lots of opportunities for future collaboration between the two regions. We look forward to supporting Indian health tech companies to access London’s thriving health tech ecosystem,” Hemin Bharucha, country director, India, London & Partners, was quoted as saying.

The pandemic and VC activity

Predictably, the COVID-19 outbreak has driven the surge in VC investment in the sector, with the Delroom.co report adding that the pandemic has “acted as a catalyst to an already growing health tech sector and investment has reached record highs” this year.

Citron said the coronavirus had accelerated the use of tech and innovation to address human disease and health. 

Mridula Pore, co-founder, and co-CEO of London-based health tech startup Peppy said: “In the U.K. and in the U.S., the pandemic has exacerbated key trends that support the traction of health tech startups like Peppy. Firstly, we’ve proven that it’s possible to work and access healthcare remotely. Secondly, employees have started to value their health and wellbeing more highly, and employers have recognized that investment in wellbeing is paid back in improved productivity and retention. Finally, we’ve seen gaps in the healthcare market widen, particularly around family, reproductive and gender-specific health.”

Some of the largest rounds this year involving monitoring and wearables companies include a $130 million Series C for Huma and a $77 million Series C for femtech company Elvie. Other fast-growing health tech subsectors in London include drug development with AI, home tests startups, and digital health insurance.

With the growth of investment in Europe, there is also scope for collaboration between health tech startups across the Atlantic.

One such U.K.-based startup that has made inroads in the U.S. is Babylon Health, which launched its virtual doctor consultations and AI interactions service in the U.S. in January 2020.

Health tech is experiencing exponential growth in the aftermath of the pandemic, with investors looking at improved user experience among the reasons for investing in the sector.
With the pandemic upending lives, technology has the potential to improve health outcomes.

Matthieu Vallin, the health investor at Octopus Ventures, said: “It’s an incredibly exciting time to be a health investor in London, with remarkable innovation wherever you look. This is partly due to the volume of top talent across health tech, deep tech, and biotech all converging to create category-defining companies. We’re also lucky to have lots of brilliant incubators, early-stage investors, and growth funds, which help startups build their product, grow at pace, and then keep scaling into bigger markets such as the U.S., which is something we focus on with our own portfolio.”

Global VC investment into health tech startups reached a record $51.3 billion so far in 2021, with U.S. firms taking in the bulk, raking in $31.9 billion.

Globally, the $51.3 billion raised this year is 280% compared to what was recorded throughout the whole of 2016, according to a new report by Dealroom.co for London & Partners.

In terms of investment, China came in second, with Chinese health techs bringing in $4.1 billion, while the United Kingdom came in third with $3.8 billion. India came in fourth, with health tech firms raising $1.9 billion in funding from VCs in 2021. Since 2016, VCs have poured in $4.4 billion into the Indian health tech industry. 

On the other hand, U.K. health tech investment has risen from $420 million in 2016, an increase of nine times, while U.S. investment has increased by 3.4 times, it was reported.