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VideoQ2 In Review: J.P. Morgan’s US Medtech Licensing and Venture Report
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The medical technology industry (otherwise known as simply “medtech”) is poised for a transformative year, as venture investments as well as merger and acquisition (M&A) activity in the sector signal a positive trajectory for growth and innovation. While initial public offering (IPO) activity remained subdued in the first half of 2024, the surge in M&A transactions and venture investments offers a promising outlook for the medtech landscape.
Venture investments in medtech soared to new heights in the first half of 2024, with $9.7 billion raised across 353 funding rounds, surpassing the figures from the same period in 2023. This surge in funding, coupled with a modest increase in investment volume, sets the stage for a potential annual growth rate of over 20%, reflecting renewed investor confidence in the sector’s potential for expansion and advancement.
Despite a decline in the number of venture investment rounds, the medtech sector witnessed a notable uptick in investment dollars, underscoring a strategic focus on smaller rounds that drove overall funding growth. The emphasis on modest upfront payments for partnership and licensing agreements highlights a cautious approach to deal economics, with most upfront checks concentrated below $10 million.
Series A funding for medtech startups showcased exceptional growth in the first half of 2024, signaling a standout year for early-stage financing. With $2.4 billion raised in 188 rounds, the medtech sector is on track to surpass previous years and approach levels seen in 2021, underscoring a robust investment environment for emerging medtech innovators.
In the realm of medtech M&A activity, the first half of 2024 saw a notable increase in acquisition transactions, totaling over $40.3 billion across 114 deals. While the median total deal value slightly decreased from the peak in 2023, the surge in M&A volumes indicates a positive year for medtech acquisitions, with key players like J&J and Boston Scientific making significant strategic moves in the market.
Despite a soft IPO market in the first half of 2024, with only three medtech IPOs completed on U.S. exchanges, the resumption of IPO activity signals a potential uptick in the coming months. Noteworthy IPOs like Tempus AI and BrightSpring Health Services underscore the sector’s resilience and adaptability in navigating market dynamics and investor sentiment.
As the medtech industry continues to evolve and innovate, the surge in venture investments, strategic M&A activity and renewed IPO momentum set the stage for a dynamic year ahead. With a focus on growth, innovation and strategic partnerships, the medtech sector is poised to drive transformative advancements in health care technology and deliver impactful solutions to patients and providers worldwide. Weaver can help you and your endeavors get set up for future success in the medtech industry as well as many others. Contact us today to find out more.
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