There was a shift in venture capital investment trends during the second half of 2021 related to the poor performance of biopharmaceutical companies that went public last year, Silicon Valley Bank (SVB) noted in its annual Healthcare Investments and Exits report. If the trend continues, it could lead to a rise in new company creation in the year ahead.
VC investment in biopharma was record-breaking for the second year in a row with $36.3bn raised by companies in the US and Europe in 2021, up from $25.7bn in 2020 and $15.9bn in 2019. However, SVB noted that the number of crossover rounds – big series B or later financings that bring in institutional investors to support a near-term initial public offering – declined during the second half of 2021 as investors reacted to negative IPO returns. The number of VC financings for “likely to IPO” (LIPO) companies dropped from 48 in the first quarter to 35 in Q2, with 29 in Q3 and 16 in Q4
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