Collective Health, the developer of a health benefits platform for employers, announced Monday that it had completed a $205 million Series E led by SoftBank's Vision Fund, with participation from PSP Investments, DFJ Growth and G Squared. Existing backers including Founders Fund, GV, Maverick Ventures, Mubadala Ventures, NEA and Sun Life also contributed to the round, which values the company at $540 million. This marks a down round for Collective Health, which was previously valued at $625 million after a $110 million Series D in February 2018.
Of the round's participants, NEA and Founders Fund made PitchBook's list of the top 10 venture capital investors in healthtech, based on deal count since the beginning of 2010 (including multiple deals for the same company):
Khosla Ventures topped the list with 53 deals—six of those were conducted in the last year and 13 took place in the last two years. Founded in 2004 by Vinod Khosla of Sun Microsystems fame, the Menlo Park-based firm's most recent healthtech investment occurred earlier this month, when it led a $21 million Series C for Neurotrack, the provider of a platform that addresses Alzheimer's disease by assessing and reducing patients' risk of cognitive decline.
Second on our list is Maryland-based NEA, which clocked in at 50 completed healthtech deals since the start of 2010. Prior to backing Collective Health, the firm participated in a $200 million Series F for Tempus, the creator of a library of molecular and clinical data, which led to a $3.1 billion valuation for the company. NEA's other healthcare-related investments include Bright Health, Willow and Tesaro.
Meanwhile, General Electric VC arm GE Ventures ranks 15th at 32 completed healthtech deals since the beginning of 2010, per PitchBook data. Launched in 2013 when GE and its stock price were in better shape, GE Ventures has reportedly invested in more than 100 startups over its six-year lifetime. However, now the VC's fate is uncertain, with a recent CNBC report indicating that GE is seeking a buyer for the unit's portfolio companies as part of its long-term turnaround plan. GE now holds around $121 billion in debt, per Bloomberg. And although GE Ventures currently has a highly active presence in healthtech investing, a potential new owner could radically change its path moving forward.
The lure of investing in healthtech will likely only continue to grow. Deloitte's 2019 Global Health Care Outlook report predicts an annual increase of 5.4% for global healthcare spending over the next three years, potentially reaching $10.06 trillion by 2022. The report cites an "increased use of exponential technologies [and] entry of disruptive and non-traditional competitors" as part of the main driving force behind the industry's continued growth and financial success.
If the current prediction models are to be believed, VC investments in up-and-coming healthtech startups may command potentially attractive returns within the next decade.
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