PitchBook News - VC goes all in to fight cancer

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The Research Pitch

October 19, 2024

Talking ESG: Perception doesn't always equal reality when it comes to how GPs and LPs think about sustainable investing. On Wednesday, we'll discuss the charged landscape with ILPA's Matt Schey. Register here.

Q3 comp sheets: We've got even more of our guides on public valuations and what those trends mean for private companies: Agtech, Enterprise SaaS, Foodtech, Medtech, Mobility Tech.

Trending research: In case you missed them, here are five of our most popular notes over the past month:

VCs pick up funding pace for oncology healthtech

Though the economic and human cost of cancer remains high, innovation in early detection, care navigation, and precision medicine are enabling new and improved methods to catch cancer in earlier stages and better match patients to effective treatments.

Our new research on the landscape for oncology healthtech investment explores the $250 billion market opportunity, along with key risks and opportunities.

In a digital health dealmaking environment where VC funding has been hard to come by, investors have been bullish about funding innovation in oncology healthtech, as the $2.8 billion of VC investment this year has already surpassed last year's funding levels.

Q1 and Q2 marked a step up from 2023 funding levels.

Liquid biopsy startup Freenome has led the way with over $1.3 billion of total VC raised since its 2014 founding, and its $254 million Series F in February could provide runway toward a possible IPO in the next year or two.

Other notable VC deals in the sector this year include Insightec's $150 million late-stage round and BillionToOne's $130 million Series D.

In our report, we highlight emerging opportunities in cancer screening, interventional oncology, and surgical technology. And we have published an interactive market map with top VC-backed startups in the diagnostics, digital health, cancer treatment, and provider-facing healthcare technology segments.

For the full data and analysis, download our free Oncology Healthtech VC Market Snapshot.

Enjoy the report and please reach out with any feedback!

Best,

Aaron DeGagne, CFA
Senior Analyst, Healthcare

Share:

Why we think direct primary care is an underrated play

In the US, employer healthcare costs are on an unsustainable trajectory.

For most employers, healthcare is the number two cost line item below payroll. Employer health plan costs per employee are expected to grow around 8% to 9% between 2024 and 2025, driven by generalized rate increases, specialty pharmacy, and GLP-1 drugs.

This is despite considerable cost shifting to employees over the past decade in the form of high-deductible plans.

In a new analyst note, we highlight one approach to reducing employer healthcare costs that is gaining traction: direct primary care.

In the direct primary care model, employers pay a provider directly to offer primary care and related preventative services—such as behavioral health, health coaching, and care navigation—to employees and their families.

Effective direct primary care improves health outcomes and lowers costs on a population level by helping patients stay healthier, manage chronic conditions, and avoid visits to the emergency room.

Direct primary care often flies under the radar, but we think the space is noteworthy for three reasons.

First, direct primary care companies like Premise Health, Marathon Health, and Nextera Healthcare are actually profitable—unlike many primary care innovators. Even as Walgreens, Walmart, and CVS have retreated from their previous ambitions in primary care, companies in the $24 billion direct primary care market continue to see steady growth.

Second, we see direct primary care as a highly investable value-based care play for PE. Although getting to scale can be challenging, the revenue profile of a mature DPC provider is attractive, with high predictability, low customer concentration, and low stroke-of-the-pen risk.

Third, we believe leading direct primary care companies will play an increasingly important role in employer-sponsored healthcare as they maneuver to become platforms unifying specialty benefit point solutions and begin to more closely align with, or even offer their own, health plans.

Read our free research note: Investable Strategies in Direct Primary Care

Best,

Rebecca Springer, Ph.D.
Lead Analyst, Healthcare
Email | LinkedIn

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Market Updates

European PE Breakdown

While exits remain low, PE dealmaking in Europe is showing signs of recovery.

Improved market conditions, lower rates, and substantial dry powder are driving this trend, particularly megadeals and corporate divestitures.

Exits have dropped in count while value has remained flat compared to last year. Fundraising is strong on the whole, despite a weaker Q3:

Read the free report

European Venture Report

European VC dealmaking is set for another year of decline, but bright spots are emerging.

AI is a highlight, with deal value pacing 24% above 2023. SaaS and life sciences are also performing well.

Higher valuations are being commanded in public listings, so is a recovery finally on the horizon for exit markets?

Read the free report

Thematic Research

Enterprise SaaS M&A Quarterly Update

Corporate M&A is unexpectedly up in enterprise SaaS, especially of VC-backed companies.

Across the SaaS industry, deals are recovering, despite a dip in buyouts.

Although valuation metrics are being left out of many deal announcements, the increasing investor confidence in the space is clear:

Read the free research

In the News

Our insights and data featured in the press:

Firms such as Ares and Blackstone have logged ~$147 billion in CLO sales this year, compared with $87 billion during the same period last year. [WSJ]

5 key data points from the latest PitchBook-NVCA Venture Monitor. [The Information]

US VC activity in generative AI coding tools has grown from more than $420 million in all of 2023 to more than $780 million so far in 2024. [Insider]

The PE industry sees hopeful glimmers in consumer M&A. [Axios Pro]

France and the Benelux have outperformed the UK and Ireland in private equity exits this year. [Delano]

If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.

ICYMI

More of our recent research (* - report preview):

Market updates

Industry & tech research

AI & ML Comp Sheet
Healthcare Services Comp Sheet
Fintech & Payments Comp Sheet
Digital Health & Healthcare IT Comp Sheet

Coming next week (subject to change)

Global M&A Report

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PitchBook News - VC goes all in to fight cancer

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