Unlike their tech brethren who are raising more money pre-IPO, VC-backed healthcare companies are raising less before going public. Similar to tech, IPO valuations show little relationship with pre-IPO funding totals.
We previously discussed the phenomenon of tech companies raising more money pre-IPO than ever before. We used CB Insights data to see if VC-backed healthcare companies were seeing the same type of pre-IPO funding increase.
The data below.
Median Pre-IPO funding for VC-backed healthcare companies has diverged versus tech over the past few years, as the median actually fell from 2012 to 2013. This year which has seen over 40 VC-backed healthcare public offerings already, including Kite Pharma, Versartis, andUltragenyx Pharmaceutical, is on pace to continue the trend of shrinking pre-IPO funding totals for healthcare companies.
Valuations Remain Range-Bound
Much like Tech, median valuations at time of IPO haven’t followed the pre-IPO funding trends too closely. 2009 saw the highest median valuations at time of IPO for VC-backed healthcare companies over the past 6 years (largely due to the low volume of healthcare IPOs), however median valuations have grown each year after the sharp drop off from 2009 to 2010. The rising valuation trend may be broken based on data for the 1st half of 2014 as median valuations at the time of IPO have actually fallen to just above $200M.
For more information surrounding IPOs check out our analysis on pre-IPO funding for tech companies. The underlying data that makes up this research brief comes from the CB Insightsventure capital database. You can create a free account here
