According to CB Insights report on medical device funding, investors’ caution has slowed funding to medical device startups in 2022, although bright spots like AI and wearables continue to gain traction.
Funding has declined for two quarters, falling to $4.5B in Q2’22, down 42% year-over-year. Deal size and volume have shrunk, particularly for seed- and angel-stage companies, which saw deal share fall four percentage points from Q1’22 to Q2’22.
Nevertheless, a group of companies have seen mega-rounds ($100M+ deals) this year. These include companies supporting digital home care and digital medicine (Biofourmis), chronic back pain (Saluda Medical), and digital neurotherapeutics (MindMaze).
Where is the investment going?
Within the past year, over $22B has been invested into medical device technology startups, with several notable areas receiving attention:
1) Artificial intelligence. For example, Iterative Scopes recently received $150M in funding for its efforts in predicting cancerous polyps using computer vision during gastroenterology procedures.
2) Surgical intelligence. While it is more commonplace in APAC countries, one of the most well-funded companies in this space is CMR Surgical, which raised a $600M Series D in June 2021 for its robotic surgical technology.
3) Diagnostic testing. For example, Exo Imaging has developed a portable, handheld ultrasound to support a patient diagnosis. The company raised a $220M Series C in July 2021.
4) Wearables and sensors. One company seeing significant funding this year is Enable Injections, which raised $215M in January 2022 for its drug delivery wearable.