Pharma Biotools VC Ecosystem Overview

Pharma biotools VC ecosystem shows modest growth in 2024

Venture capital activity in the pharma biotools sector showed modest growth in 2024, with total funding increasing 1.6% YoY to $4.15 billion despite the deal count decreasing 2.9% to 233 deals, according to PitchBook's latest Pharma Biotools VC Ecosystem Overview. This trend reflects an industry shift toward higher-value deals as the sector matures.

Key themes driving the market include sustained investment in AI-driven drug discovery, synthetic biology, and next-generation sequencing—even as some IPO/SPAC valuations came under pressure. Investors are increasingly favoring platform technologies with multiple applications over single-product companies, reflecting a strategic pivot toward versatile solutions with broader market potential.

Exit activity remained challenging, with only 11 exits recorded in 2024 compared to 21 in 2023. Public listings remained stable at four in both years, not doubling as originally stated. In Q4 2024, there was positive momentum with a sequential 9.3% increase in deal count to 59 deals, even though deal value declined 30.6% to $0.73 billion. Looking ahead to 2025, the sector is expected to benefit from sustained demand for technologies that accelerate drug discovery and development, with investment increasingly focused on platforms that demonstrate clear ROI through enhanced R&D productivity.