Venture capital funding during the 2nd quarter was down from Q1, according to a PricewaterhouseCoopers and CB Insights MoneyTree report released last week.
Funding in the life sciences industry was down from the 1st quarter at 147 deals grossing $2.6 billion, lower than Q1’s 182 deals at $3.7 billion. The medical device industry saw a total of $723.5 million in 53 deals during the 2nd quarter, down from $788.4 million in 66 deals in the 1st quarter
Outset Medical‘s $76.5 million funding round topped the quarter for medical device companies, according to the report, followed by Pulmonx‘s $50 million and Advanced Cardiac Therapeutics’ $45 million.
Other major investments in the quarter included Earlens’ $38 million round, ALung Technologies with $36 million, VitalConnect with $33 million, Vertos Medical with $28.8 million, Intrinsic Therapeutics with $28 million, Monteris Medical with $27 million and Two Pore Guys with $24.5 million.
Seed stage life sciences companies received the least amount of funding at $17.7 million, down from $34.8 million in Q1, while expansion stage companies took the majority of the funds at $1.2 billion, also down from Q1s $1.9 billion.
Early stage companies received $391.5 million, significantly down from the $847.7 million during the 1st quarter, while late stage companies saw funding increase to $869.6 million from $466.4 million in Q1.
On the whole, funding from US VC-backed companies rose to its highest point in a year during the 2nd quarter. Investors deployed approximately $18.4 billion to US VC-backed companies across 1,152 deals, according to the report, with funding amounts up 28% from Q1 while deal terms were down 4%.
Mega-rounds, worth $100 million or more, clocked in at 31 for the quarter, representing the highest total since hitting 36 during the 3rd quarter of 2015, according to the report.
“Q2 was a tale of 2 trends. US deal activity continued its multi-quarter downward trend, but the growth rate of investments in dollar terms accelerated from the first quarter. A surge in Mega-round deals, to the second highest level seen to date, helped drive a robust level of quarterly VC funding,” PwC US venture capital leader Tom Ciccolella said in a prepared statement.
Regional activity was down from the 1st quarter in most major hubs, according to the report, except for the Los Angeles and Orange County area, which saw both deals and funding amount rise for the 2nd consecutive quarter. Both New York Metro and Silicon Valley saw 8-quarter quarterly funding highs, despite the lowered activity.
Global deals were up 2% from Q1 2017 to a total of 2,439, with funding spiking 53% to an 8-quarter high of $42.9 billion, higher than Q3 2015’s $40.6 billion.
“The buzz around existing and new unicorns was back with mega-rounds jumping significantly. As a result of these financings, the quarterly funding tally looked quite strong. But Q2 also illustrated that deal activity has settled into a new, lower normal after declining through most of 2016 driven by weaker early stage activity. While we have seen a handful of larger acquisitions and IPOs in 2017, the exit environment’s health will be a key driver of whether deal activity resumes,” CB Insights co-founder & CEO Anand Sanwal said in a press release.
