The Ever-Growing Landscape - PE/VC World of MedTech
May I welcome you back to my monthly newsletter that surmises the PE/VC landscape of MedTech. This feature will cover, as ever, 6 interesting stories in this sector from Mid-May to Mid-June.??
Mayday, Mayday, Mayday – US investment goes down?
May saw the financial reporting conclude for the month of April, and it reveals that this was a relatively poor month for deal activity in the MedTech space, with just 84 deals. Although, as mentioned in my last piece, ArchiMed led a large $1.2BN PE deal with Natus Medical, this one deal accounted for 48% of overall deal value for April in the US. In sum, deal activity has dropped by 25.66% from the last 12 months. Now, whilst we are unlikely to see the likes of a Dec 21 ($41.99BN) for a while; this decline is definitely food for thought.??
It is important to note that this is not just the US, in China, deal activity dropped by 23.33%; and Europe also saw a decline of 2.56% in deal activity.?
Why is this happening???
Some pretty seismic political events have occurred since January 2022 ($7.97BN), notably with the invasion of Ukraine by Russia in February. Since then, the deal values for the month have consistently stayed between $2.5 - $2.8BN. The conflict has had a knock-on effect across the global economy, affecting multiple verticals such as Supply Chain and Food Production. Utilising the ‘Consumer Confidence Index’, one of the most accurate and closely watched economic indicators, it is common knowledge that wartime reduces consumer confidence. A lack of consumer confidence is widely regarded that the biggest threat to any market… ?
Furthermore, the honeymoon period is wearing off from COVID-19 restrictions relaxing, and with inflation rates at their highest levels in decades, many corporate leaders are talking of an economic contraction that will last at least 6 months. The appetite for spend might just not be there; as we know PE/VC firms tend to look at the long term view of how the stock market will react to their portfolio companies, and with the stock market tumbling; many firms might feel that is just isn’t the right time to take a large swing.[1]
However – it is not all doom and gloom in the PE/VC Medtech space; for the remainder of this article I will discuss the money flow, where it is going, and to whom. ?
Enforcing the A and I in Diabetes??
Diabeloop is a French based Medical Device company that is an automated Insulin Delivery pioneer, developing a machine-learning software for diabetes treatment. In June they announced €70M in their Series C round of funding, which will help in their commercial roll-out and support their sustained growth. So far, Diabeloop have nearly 10,000 patients using their product.??
This round was led LBO France; who have been operating within France and Italy for the last 35 years, having raised €6.6bn and invested in 244 different companies since their inception. LBO France has a very strong focus on the Digital Health space having invested in 15 Digital Health companies since 2015 that are unrealized. This suits a trend I am seeing with some of my PE clients, who are looking to make in-roads into the Digi-Health space.??
Valery Huot, Partner, Head of Venture at LBO France has this to say – ‘’We are eager to join the investor base and help the company become a global leader in diabetes closed-loop software solutions,”.
Likewise Erik Huneker, Founder & CEO of Diabeloop, believes that ‘’the financing round announced today recognizes the team’s successes, and more importantly, the great opportunities ahead.”[2] ?
Aledade, $123MM … it’s easy as Series E)
In every industry, the value of data is considered incredibly important. Capitalising on this fundamental fact, Aledade has created a solution that offers primary care providers access to cutting-edge data analytics, user-friendly guided workflows, unparalleled regulatory expertise, strong payer relationships, and local, hands-on support from attentive experts. Their aim is to provide clarity, simplicity, and support for providers while working to align physician incomes with patient outcomes.?
They have just secured an additional $123MM in their Series E round, which raises the company's valuation to that of $3.1BN. This raise was led by their prior backers of OMERS Growth Equity and Fidelity Management & Research Company.[3]
Co-Founder and CEO Dr. Farzad Mostashari commented – "With this financing, Aledade is extremely well positioned in this market environment to accelerate our work to meet patients where they are, especially in Medicare Advantage, and seize new opportunities to expand wraparound patient care services. Difficult market conditions can create exceptional opportunities for strong businesses to get stronger and that is our plan."[4]
May your staff shortages subside – Florence raises ￡28.5MM?
Florence, a London based Health Tech company, aims to connect independent nurses and carers directly with care providers to fill their temporary shifts, with an aim to fill every care vacancy within sixty seconds. Florence is aiming to plug an incredibly vital hole that is especially prevalent in the UK. Currently, the NHS (National Health Service) is struggling to fill 110,000 positions in its organisation.??
As mentioned, in the UK, there is a huge shortage of AHP (Allied Health Professionals), which was exposed during the pandemic whereby there was a large transition from LOCUM & Bank Workers to Permanent, due to the unpredictability within cases. High priority shifts weren’t filled, and the problems this caused lends itself to Florence’s mission statement that ‘’everyone should have the care and dignity they deserve,” (Dr Charles Armitage, Co-Founder).??
This Series B Funding round was led by Axa Venture Partners, Roo Capital and SEEK Investments. [5]
Suzhou Microclear Medical – Series C Funding??
Focused on ophthalmology and optometry imaging, Microclear integrates self-developed critical components with artificial intelligence & connection technology, to provide high quality Chinese created equipment and service for hospitals and basic medical institutes across the globe. This company has had a relatively fast route to success, achieving CFDA/CE/FDA approval for their handheld products within 4 years of inception.[6]
Their most recent funding round was led by Dyee Capital (exclusively) and Dr. Xiao Xinye, Associate Director of Dyee Capital commented that “We are delighted to see that the functional modules of some products have achieved global leading level, we are optimistic about the future performance of Microclear globally.”?
Finally… my one to watch!??
领英推荐
Luminate Medical?
Luminate Medical is an Irish Medical Device company whose mission is to develop a device that eliminates hair loss during chemotherapy. As cancer cases are only set to rise over the next 20 years, chemotherapy use is projected to continue to grow by 50%. However, it is reported that 8% of potential patients either refuse, avoid or dose-reduce their treatment due to their fear of hair loss. Hair loss can have severe negative effects on people undergoing chemotherapy treatment as it is an essential element of personality and self-esteem, with 47% of female patients saying hair loss is the most traumatic part of their cancer treatment. ?
Their product is a portable device that works as a mechanised compression garment for the head using soft materials to achieve the pressure. Patients are required to wear the cap during and after the entire chemo session. By restricting blood flow to the skin of the scalp, the novel device facilitates the flow of the drugs to the intended tumour or cancer site whilst saving hair follicles from damage; ultimately ‘’Luminate’s Lily device is a portable, comfortable, and [an] effective alternative to the trauma of hair loss and wigs’’ (Dr. Bárbara Oliveira).?
Luminate is scheduled to treat its first patients this year in Europe and is still confirming the final dates aiming for September/October for a controlled pilot study. Its goal would be to submit for clearance from the FDA to market the device to any patient in the U.S.at the end of 2023.?
Co-Founded by Aaron Hannon, Dr Bárbara Oliveira and Prof. Martin O’Halloran, they have recently received €5 million in funding from investors including Elkstone Capital and SciFounders. The three Co-Founders have a strong pedigree on the Technical Side, with Aaron and Bárbara both being Research Fellow’s of NUIG (National University of Ireland, Galway) and Martin a Professor of Medical Electronics at NUIG. No-doubt the investment will provide not just capital, but additional commercial expertise to help guide this company forward to their FDA ambition, and more importantly their goal of helping patients though their cancer treatment.
In particular, SciFounders has a wealth of knowledge in helping early-stage ‘scientist-led’ ventures in the Healthcare space with their three partners playing pivotal roles in their own Healthcare companies, and also now providing advice to 8 early stage companies that are within their portfolio.[7] [8]
Please check out their website here - https://www.luminatemed.com/ ?
Summary??
I hope you have enjoyed my brief analysis of the last 30 days in the PE/VC landscape of MedTech. Please subscribe to this newsletter for the next monthly instalment. If you have any points of conversation – please feel free to share!??
Have I missed a major topic that you think I should cover next month? ?
What do you think the landscape portrays for the future??
If you are in this space and you want to have a conversation with me, feel free to reach out via LinkedIn or to me at [email protected] ?
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[1] https://www.medicaldevice-network.com/deals-analysis/north-americas-medical-devices-industry-saw-a-drop-of-25-66-in-deal-activity-during-april-2022/
[3] https://www.mobihealthnews.com/news/aledade-scores-123m-value-based-care-and-more-digital-health-fundings
Co-Founder & Chief Clinical Officer at Luminate Medical (YC S21)
2 年Thanks for featuring us Oliver G.! And congrats on putting this newsletter together - great read!
FEC Analyst for DLL
2 年That’s a great one to watch at the end