Investments in Medical Alley medtech companies, which had dipped in recent years, have made a comeback, according to the Minnesota trade association.
Device companies raised $90 million in the third quarter, pushing the year-to-date total to nearly $200 million raised by 33 companies. Q3’s largest raises in medtech included Urotronic ($26 million, including $20M in Series B funds), 4C Medical ($17 million), and Cardialen ($17 million), continuing a growth trend that began in 2009, Medical Alley said in a statement. Biotech companies broke $100 million in capital raised in a year for the first time in the association’s history. Investment in digital health companies reached $32 million raised in the third quarter for a year-to-date total of $116 million.
All major sectors in the organization broke $100 million in YTD funds raised for the first time, for a total of $416M raised by 64 companies. Twenty-seven companies raised a total of $176 million in Q3, the second best Q3 in the last five years, keeping the region on pace to break a half-billion dollars in total money raised in 2018. While Q3 is down from a year ago, that is due in large part to fewer post-IPO raises in the quarter than there were in 2017, the organization said.
Last year’s total included an all-time Minnesota record of $160 million for Bright Health, a technology-enabled health insurance plan, and multiple growth capital rounds raised in excess of $20 million. Looking over the five-year period from 2014 to 2018, nearly $1.5 billion has been raised by 118 device firms, $300 million more than the 2009-2013 period. Because venture investing can be highly volatile quarter-to-quarter, Medical Alley said it takes a greater interest in examining total investment over five- and 10-year periods to correspond with the lifecycles of many investment funds.
With a quarter to go, the gap is likely to widen even more, the trade organization said. The $1.5 billion in device investment raised in the last five full years (2013-2017) makes Medical Alley not only the top region for medical device investment in the Midwest, but the top region for all healthcare investment in the Midwest, surpassing Ohio and Illinois by hundreds of millions of dollars, the group added.
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