Medical device firms fetched $602 million in venture funding during the first quarter of 2011, up 8 percent from the same period last year and good for the best first quarter the industry has had in three years, according to a new Money Tree report.
The Money Tree report, conducted by PricewaterhouseCoopers using data provided by Thomson Reuters, said investors closed 79 investments in medical device companies at all stages during the quarter, up 11 percent from the 71 deals done during the same period last year.
Total dollars invested jumped accordingly, up 8 percent from the $553 million investors pumped into the med-tech sector last year. In a consecutive-quarter comparison, med-tech investment jumped 34 percent from the fourth quarter of 2010, while deal flow remained essentially flat. It was the strongest first quarter for VC investment since the halcyon days of 2008, when investors pumped more than $1 billion into the sector.
On a regional basis, New England and Silicon Valley essentially tied as the most fertile ground for investments in medical devices. Investors in the New England region pumped $145 million into the space via 15 deals. More than half of that money came from two later-stage deals: A $38 million round for RainDance Technologies and a $31 million round for CardioFocus Inc. Approximately seven of the deals were considered early-stage.
Medical device companies in Silicon Valley pulled in 15 deals worth $155 million. Interestingly, not a single Minnesota-based company pulled in any VC money during the first quarter, despite it being one of the most active areas in medical devices.
Medical devices ranked fourth overall in the first quarter in terms of dollars invested.