Key takeaway

The pandemic has accelerated adoption and growth of virtual and hybrid care models, with 2020 on track to attract a record $16B, far outpacing the $12.1B+ raised in 2019.
01. HealthTech has raised $12B+ through Q3 2020
The first three quarters of 2020 have already set an annual record for healthtech funding.
02. Alternative care leaps ahead during the COVID-19 pandemic
In 2020, alternative care has accounted for 38% ($4B+) of venture-backed healthtech funding.
03. 16% of the US may be adversely affected by mental health in 2021
Mental health has seen increased investor activity, with startups projected to raise $1B+ in 2020.
The data
The pandemic has contributed to a renewed interest in alternative care, allowing this subsector to surge ahead of others. The positive sentiment around virtual care also translated to the public markets, with some of these companies up +100% since the start of the year.
GLOBAL VC DEALS AND DOLLARS

HealthTech funding to reach $16B+ in 2020

 

Over the last four years, private venture-backed healthtech companies have seen $1B+ in global* financings quarter over quarter. This year, US companies have raised a staggering 82% of global funding; Europe and China contribute 10% and 8%, respectively.

VC Deals and Dollars. US, Europe and China, 2017–2020

SUBSECTOR VC DEALS AND DOLLARS

Alternative care has raised $4B+ in 2020

 

Alternative care companies pave the way in terms of subsector funding, surpassing the next highest-funded subsector (provider operations) by an incredible $2.6B over the last three years.

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ALTERNATIVE CARE VC DEALS AND DOLLARS

Virtual and hybrid care take center stage

 

Historically, alternative care companies have skewed toward providing virtual care or in-person care; however, due to wide-spread adoption of telehealth during the COVID-19 pandemic, in-person companies have adopted a virtual care component, creating a hybrid care model.

Alternative Care VC Deals and Dollars. US and Europe, 2018–2020

MENTAL HEALTH VC DEALS AND DOLLARS

Mental health funding may cross $1B+ in 2020

 

Mental health funding is on an upward trend this year, with the most active investors favoring later-stage mental health companies. 1H 2020’s unprecedented funding can be attributed to three $90M+ deals.

Mental Health VC Deals and Dollars. US and Europe, 2015–2020
HEALTHTECH PUBLIC MARKET PERFORMANCE

SVB’s strong HealthTech index performance due to virtual care

 

In 2020, the SVB Global HealthTech Index (+102%) has recovered faster than the DJIA (-4%), S&P 500 (+2%) and Nasdaq (+14%). It is also ahead of FAMGA (+42%), whose companies have been relatively resilient to the pandemic.

SVB Public HealthTech Index Comparison. Global, 2020