Globally, corporate venture capitalists (CVCs) have dramatically increased their activity last year, according to a new report. Report From CB Insights. They invested a record $169.3 billion in 2021, a 142% increase over their 2020 total.
Not surprisingly, deals for CVC-backed digital health startups have grown.
These corporate investors put in $16.6 billion in 2021, up from a record $9.9 billion the year before. The pandemic has given a huge boost to the sector’s growth, with CVC deals jumping to 442 last year compared to 372 in 2020.
GV (formerly Google Ventures) has invested the most in digital health companies with 22, making it the most active investor in the space for the fourth year in a row. But GV’s company is good because many people have invested in the field. For example, Maverick Ventures backed 20. Salesforce and Sony’s venture capital arm each funded more than five digital health companies in 2021.
In addition, the venture capital arms of several healthcare companies have also made investments. For example, Kaiser Permanente, Johnson & Johnson and Optum are reported to be involved in 2021 deals with 10, 9 and 11 deals respectively –
New investors have also joined the ranks. Specifically, CVS Health launched CVS Health Ventures in 2021 with $100 million in funding.
In terms of dollars and deals, the U.S. receives the most CVC-backed healthcare capital. In particular, half of all CVC-backed digital health deals in 2021 went to U.S.-based startups. In terms of volume, the US received more in 2021 and, thanks to 2020, received nearly 75% of the funding. By contrast, the second-place finisher — China — received just 7 percent of the funding and 8 percent of the deals from corporate investors. The U.S. has more than doubled from $40.5 billion in 2020, with CVC-backed funding reaching $86.9 billion in 2021, the report said.
The report said there will be a sharp increase in mega-round funding in digital health in 2021, up 67% from 2021, including startups in diagnostics, drug discovery and development, and mental health.
Trends in digital health generally mirror CVC-backed deals, the report said.
For example, only 10% of all CVC deals in 2021 will be big rounds. However, by 2021, giant rounds represent 62% of total CVC-backed funding. Most of the big deals are happening stateside, as in digital health.
Photo: drogatnev, Getty Images; Photo: CB Insights
