Medtech VC Funding in Q3 Tops $820M

Venture capitalists poured about $821.5 million into medtech firms during the third quarter of 2015, representing a sizeable increase over the $634 million raised during the same period in 2014.

As a result, the funding totals for 2015 stand at $2.1 billion, representing an uptick from just under $2 billion at the same point last year, according to data from “PwC/NVCA MoneyTree Report, based on data from Thomson Reuters.”

Raking in the most for the quarter with a $26.5 million haul was Munich, Germany-based JenaValve Technology, which develops second-generation transcatheter aortic valve implantation systems. The 9-year-old company, which also has a presence in Irvine, Calif., received the CE mark in 2011 for its JenaValve system.

Coming in second is newly minted San Francisco-based Gritstone Oncology with $25.5 million. Gritstone opened for business this summer and is headed by Andrew Allen, Clovis Oncology’s cofounder and former chief medical officer and executive vice president of clinical and preclinical development.

Rounding out the top 3 with $23.9 million is Emeryville, Calif.-based Channel Medsystems, which is focused on women’s healthcare. Its cryothermic technology is available for investigational use in Canada, but not in the U.S.

Venture capitalists invested $16.3 billion during the quarter for all industries, bringing the grand total for the year to $47 billion. “Despite a modest downtick in dollars and deals in the third quarter, we are still in the midst of a robust market, and this quarter marks the second highest quarter in aggregate investment dollars since the fourth quarter of 2000,” said Tom Ciccolella, U.S. venture capital market leader at PwC.

At the AdvaMed 2015 conference in San Diego, a panel discussed investment trends in medtech startups, concluding that traditional companies with incremental innovation could suffer (IDDM, Oct. 12). Brian Williams, director of strategy and innovation, new entrants and healthcare, PwC, told IDDM that these companies would have to demonstrate a significantly differentiated therapeutic value to still see funding.

He added that with healthcare increasingly moving to the home, devicemakers will have to appeal directly to consumers. Interest in devices intended for the home is seen in the MoneyTree report with investments in Owlet Baby Care, which developed the Smart Sock baby monitor, and CliniCloud, which makes a medical kit for home use. — Elizabeth Hollis