The report looks into the venture healthcare industry in the US. The industry faced significant challenges during the recent down cycle, including reduced investment activity, limited IPO opportunities, and macroeconomic pressures. Despite these headwinds, 2025 saw a rebound in investment - particularly in the fourth quarter - driven largely by AI-enabled technology rounds and increased M&A activity.

Further, the report looks into future opportunities in the industry. In 2026, the industry is positioned for modest investment growth, with expectations of increased M&A and IPO activity. Venture capitalists are anticipated to accelerate their investment pace, supported by growth and crossover investors, as well as corporates seeking innovation in related sectors. Overall, total investment is projected to rise to $65-70Bn in 2026.

Download our report for deeper insights into the sectors.

Biopharma

Biopharma financing in 2024-25 has been increasingly shaped by mega rounds, which now account for more than half of all funding dollars despite a decline in the total number of deals. They have emerged as a response to rising cost of drug development and the need to extend runway ahead of future value-creation milestones. While only a handful of such rounds existed in 2023, they have expanded significantly.

Dx/Tools

Investment in Dx/Tools remained consistent over the past three years but continued to trail Covid-era highs. While overall activity stayed 30-50% below 2020-21 levels, 2025 saw a clear shift toward larger, later-stage step-up rounds. The largest 10% of the deals accounted for a smaller share of total dollars compared to 2024.

Med Device

Med device investment hit a record $10.4B in 2025, driven by a few outsized rounds but still surpassing prior peaks even excluding these outliers. Capital came in from a broad mix of VC, growth, PE, corporate, and private investors. Strong M&A exits and IPOs through 2025 have reinforced confidence and set a constructive backdrop for 2026.

HealthTech

Healthtech investment saw a sharp surge early in the year, driven by several $200M+ mega rounds that front-loaded capital deployment and created a strong start. This initial spike normalized quickly, with monthly investment settling near $1B and relatively few $100M+ deals through mid-year, indicating a return to more disciplined capital pacing.