MASSDEVICE ON CALL — The lack of dollars for medtech startups is bad news for the industry, but some investors are happy to see their competition dropping.
Fewer funders means more opportunities for those that remain, representing a "right-sizing" of the investment pool, River Cities Capital Funds partner Carter McNabb told the Wall Street Journal.
"I love [the exodus from device investing], because it’s more opportunity for our fund," McNabb said.
Limited access to capital may also "weed out weak deals," InCube Labs medtech accelerator operator Mir Imran told the paper.
Medtech investment in 2013 was an estimated 40% lower than it had been 5 years earlier, spurring some unorthodox forms of fundraising such as asking family members and local celebrities to kick in some cash. The industry brought in about $2.5 billion in investment dollars in 2013, about the same as 8 years ago. Funding gained momentum in 2006 and crashed in 2011, according to the Journal.
The dearth of funding has also sent medtech startups in search of buyers earlier and earlier in their growth, and some of the industry’s biggest players are happy to comply. Boston Scientific (NYSE:BSX) corporate business development vice president Charlie Attlan said last year that the company was forming relationships with ever-younger companies.
Last year was a dismal one for medtech in general, but there were some bright spots. Minnesota and New England broke the mold, each raking in significant dollars amid the national VC shortage.
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