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Pharma start-ups got record funding in 2018

Venture capitalists invested $17.4 billion in pharma and biotech firms

by Marc S. Reisch
January 16, 2019 | A version of this story appeared in Volume 97, Issue 3


A photo of Kymera's leadership, from left: Laurent Audoly, CEO; Jared Gollob, chief medical officer; Nello Mainolfi, founder and chief technology officer; and Mark Nuttall, chief business officer.
Credit: Jen Randall Photography
Kymera Therapeutics scored $65 million in financing in November 2018.

Last year was a good one for start-ups seeking financing, and it was an especially good year for firms in pharmaceuticals and biotechnology.

Venture capitalists sank $131 billion into US-based start-ups in 2018; pharma and biotech start-ups attracted $17.4 billion, or 13.3% of the total. Both sums set records, according to the National Venture Capital Association and PitchBook, a financial data–crunching firm.

Total venture investment in 2018 broke the $100 billion high set during the dot-com boom in 2000. And the pharma and biotech category easily broke the record it set last year, when firms raised $11.8 billion.

Overall, venture investors struck 8,948 funding deals last year. By far, the largest category was software,, which accounted for nearly 42% of all deals. A miscellaneous category came in second with 1,973 deals, followed by the pharma and biotech sector with 720.

Most categories saw a modest decline in the number of deals completed in 2018 compared with 2017. But the pharma and biotech sector experienced a 6% increase in deals.

Large corporations significantly increased their participation in support of start-ups in 2018. These strategic players invested in 172 pharma and biotech deals last year, up 19% from the year before. And the value of those deals rocketed by 75% to $10.2 billion.

Overall, corporate investors took part in 1,443 deals, up just 1% from 2017. But the value of deals they invested in rose a spectacular 83% to $66.8 billion.

The National Venture Capital Association suggests at least one reason for the big increase in corporate venture investments: last year’s tax cuts boosted corporate coffers, leading to a large number of outsized financings.

CORRECTION: This story was updated on Jan. 24, 2019, to correct the percentage of 2018 venture capital fundraising represented by pharma and biotech start-ups. The percentage is 13.3%.


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