After experiencing a bit of a slump early in 2020, the medical device industry has picked itself back up and even exceeded expectations. The coronavirus pandemic put a halt to a lot of Q1 funding opportunities, as healthcare and research scrambled to turn their resources towards battling COVID-19. However, by Q3 funding had picked back up, rising 63% year-over-year and even managing to top $5 billion for the first time ever.
Much of the funding can be traced back to investments in robotic surgery startups. Companies ended up producing 478 agreements that contributed to the impressive total of $5.1 billion. Over the previous 11 quarters, the median value of deals was a mere $3.4 billion. This year’s third quarter also broke records with the overall number of deals.
Companies that deliver devices for aquablation therapies were responsible for much of this trend. Aquablation therapies are used for treating benign prostate enlargement and are minimally invasive procedures that employ high-pressure streams of saline to remove parenchymal tissue within the prostate. The procedure was developed by PROCEPT BioRobotics, who raised $77 million this year for improvements on the robotic surgery.
Neuromodulation was another big trend in the robotic surgery field this year. Therapeutic neuromodulation alters nerve activity via an electronic or chemical stimulus. These devices can help people regain movement that was previously lost or help mitigate chronic pain. They can also help restore bladder or bowel control in some patients or help control tremors from Parkinson’s disease. Neuromodulation leader Medtronic slowed down its spending in the beginning of the year but was able to pick up the pace by the third quarter, once again becoming an active investor and purchaser.
According to CB Insights, the digital health industry also boomed third quarter, with $8.4 billion spread across 502 deals. Telehealth also had a productive quarter, with $2.8 billion in deals. This is up 72% from the second quarter and was largely driven by five large deals that comprised about 30% of the total funding. Medical device funding, digital health, and telehealth are all experiencing a startup-driven third quarter, and likely won’t slow down heading into Q4.
