Banking Trends and Innovations for the Life Sciences Industry

What We Have Covered in This Article

Last Updated on January 2, 2023 by Editor Futurescope

Life sciences startups require large capital to develop technology and products that take a while to get approved and released into the market. Banks with life science services need to offer personalized service, toolkits, and investing advice to safely manage their finances, raise funds, and grow their business.

Investors seem more ready now than ever to engage with the rapidly emerging life sciences and healthcare startups that surged post-pandemic. This sudden interest and higher market activity are transforming the nature of Series A, increased venture fundraising, private investments, and elevated IPO activity. 

Here are a few trends that showcase the current banking landscape of the life science and healthcare startup industry.

A Higher Deal Volume and Disclosed Values

In the life science industry, deals increased by 36 percent, from 380 the previous year to 515 this year, according to data gathered from Bain & Company. The top deals include the $34 billion Medline deal and the $17 billion acquisition of Athenahealth. 

The consultant company’s Healthcare Private Equity Market Year in Review found that the disclosed deal value on average rose 134 percent as a result of five major buyouts that went above $5 billion compared to just a single last year. The total disclosed amount almost tripled to $151 billion from $66 billion. 

The increase in the deals was a result of various parked deals caused by the pandemic and also because of the revival of the top Medline and Athenahealth deals. 

Technological Advancements

Recently, there have been major scientific breakthroughs in genomics, which is the mapping of the human genome. With the help of advancements in AI and machine learning, scientists are able to come up with personalized medicinal therapies based on a person’s genome.  

The use of meta-data along with the Internet-of-Things and sensors has enabled health tech companies to provide better services. Such development has piqued the interest of the investment ecosystem. Companies that support mental and chronic care have attracted major invested capital. 

Subsectors Are Merging 

Another trend that is being witnessed is the blending of subsectors. Health tech companies leverage diagnostic technology in their cloud applications to help patients be compliant with their drugs. These new companies are using DX tools and biopharma to create cloud-based bundled solutions. This converging of subsectors is giving rise to single new companies that blend the traditional subsectors, reports KPMG. In the near future, there may be a change in how the traditional and the new single companies get funded by investors.

Fundraising Cycle Time Has Narrowed

The time between rounds of life science funding now averages to two to two and a half years or even less. In the life science and healthcare industry, many Series A rounds are not the first institutional money invested. Currently, many institutions prefer to venture seed startups early on in the process and plan a Series A round as a part of that funding for a later time. Venture studios are emerging too, where venture capital firms create venture studio concepts and incubate companies explicitly. 

Life Science Startups Need Institutions That Go Beyond Banking

The current consistent market activity has made the investors really picky, preferring the best technologies. Regardless of a startup having great solutions that can satisfy the market’s needs, only the best-considered tech is being considered by many investors. 

Startup founders need to partner up with a bank that has connections within the industry and can present them with opportunities to work with investors and VC groups.

Editor Futurescope
Editor Futurescope

Founding writer of Futurescope. Nascent futures, foresight, future emerging technology, high-tech and amazing visions of the future change our world. The Future is closer than you think!

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