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​​Life Sciences Funding in View​

Sandy Romero • 1/29/2024

Global life sciences venture capital funding has reverted to its pre-pandemic long-term trend. Peak pandemic funding and initial public offering activity in 2020 and 2021 resulted in the creation of many new life sciences companies. Some of these companies faced several hurdles in 2023, including a challenging fundraising environment, higher interest rates and economic uncertainty. Heading into 2024, some of this uncertainty will likely remain, however, companies are now adept at navigating a more challenging landscape. Developing strategies to operate lean in a capital-constrained environment will continue to be an important tool in 2024, as investors remain cautious with their allocations.

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Key Findings
  • Global life sciences venture capital (VC) and initial public offering (IPO) volume fell in 2023. The outlook for 2024 is flat for VC funding, as investors tighten their underwriting guidelines. IPO activity is expected to increase since many companies waited out the uncertainty of 2023.
  • Successful clinical trials will continue to be an important barometer for both VC and IPO investment.
  • 2023 was a banner year for mergers and acquisitions (M&A), and 2024 is expected to be more of the same as companies look for innovative strategies to bring their products to market faster and more efficiently.
  • 2024 will be a pivotal year for the U.S. life sciences commercial real estate (CRE) sector. Softening fundamentals coupled with historic levels of new inventory will provide a tenant-friendly market in the near term.

U.S. Life Sciences Funding – Breakdown by Market 

Explore top U.S. life sciences markets on the map below. Click to view market level breakdowns of VC funding (and YoY change), number of deals, average deal size (and YoY change) and that market’s % of total U.S. funding. 

 

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