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Report: Q3 2017 Healthcare VC funding steady, digital health deals drop

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Venture Capital funding in the healthcare sector during the third quarter of 2017 stayed mostly in line with the previous quarter while digital health deals saw a significant drop, according to a PricewaterhouseCoopers and CB Insights MoneyTree report.

VC funding during the third quarter of 2017 was directly in line with the previous quarter, but still down 6% when compared to the same quarter last year. The healthcare sector netted a total of $3.2 billion invested through 171 deals, according to the report, comprising 13% of the total VC funding for the quarter.

Those numbers are down slightly from the previous quarter where healthcare VC funding comprised 15% of total funding for the quarter, and are in line with the 13% reported during the third quarter of 2016.

VC funding in the digital health sector declined significantly from the previous quarter, falling 66% from the $2.7 billion reported during the second quarter to $919 million for the third. That represents the slowest quarter for digital health in 2017, according to the report.

Only a single mega-round worth over $100 million was reported, with the next largest round clocking in at $50 million.

The year has still been a stand-out for digital health, according to the report, with more money having already been raised in the sector during the first three quarters than was raised in all of 2016.

“2017 continues to be a banner year for Digital Health VC investments, with the first three quarters exceeding the combined total for 2016. Q3 saw total VC investments exceeding $900M in Digital Health, with significant investments in the areas of disease diagnosis, personalized health and telehealth,” PwC US health services principal Vaughn Kauffman said, according to the report.

Early stage digital health companies dominated the sector, pulling in 33% of all VC funding, while expansion stage companies came in at 21%, seed stage at 17% and later stages at 10%.

Auris Surgical Robotics placed in the top five largest deals of the quarter, raising $280 million to support its robotic surgical platform, according to the report.

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