Sector Snapshot - Key Trends in Dealmaking - Emerging Healthcare & Life Sciences

Sector Snapshot: Key Trends in Dealmaking 2 | Emerging Healthcare & Life Sciences 1 “WHO Calls on Governments for Urgent Action to Invest in Universal Health Coverage,” World Health Organization, December 11, 2023. 2 “Americans’ Challenges With Health Care Costs,” KFF, Lunna Lopes, et al., March 1, 2024. Introduction The emerging frontiers of healthcare are diverse, but primarily lie at the nexus of biotech, digitalization, AI, infrastructure, telemedicine, and subtly improving devices, with considerable overlap between those segments. Such innovations are in avid demand due to the sheer size and needs of the global healthcare market as regulatory shifts increase in complexity and demographics age – theWorld Health Organization estimated global healthcare spending at $9.8 trillion, or over 10% of global gross domestic product in 2021 1 . In one nation’s example, meanwhile, half of US adults say it is difficult to cover healthcare costs 2 ; yet due to economic conditions, medtech and life sciences executives polled are still touting innovation investment as important, yet not quite as much as in the past. As a result, venture financing activity spanning emerging healthcare subsegments remained somewhat resilient in 2023, but not totally immune to the volatility in financial markets that has taken a toll on private market dealmaking over the past few years. Quarterly data reveals that 2023 tallies saw an evening out of financing volume at historically healthy if not record levels. However, after 91 emerging healthcare unicorns were minted in 2021, such profuse funding has fallen swiftly as economic andmarket concerns have heightened since. Even emerging healthcare’s strong macro drivers face market volatility headwinds Global VC deal activity – Emerging Healthcare & Life Sciences *As of 02/23/2024. Source: PitchBook. Deal value ($B) Deal count 2018 2015 2020 2023 2014 2019 2016 2021 2024* 2017 2022 616 5,520 3,784 6,033 3,045 5,913 4,252 8,503 4,753 7,375 6,730 $57 $28 $81 $63 $21 $54 $28 $129 $9 $36 $88 $140 $120 $100 $80 $60 $40 $20 $0 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Even as the venture market moderates, aggregate unicorn valuations hit a peak Global unicorn aggregate flow ($B) – Emerging Healthcare & Life Sciences 2018 2015 2013 2020 2023 2014 2012 2011 2019 2016 2021 2024* 2017 2022 $350 $300 $250 $200 $150 $100 $50 $0 140 120 100 80 60 40 20 0 *As of 02/23/2024. Source: PitchBook. Aggregate Value ($B) Active Unicorns NewUnicorns