Medtech’s top 10 money raisers of 2021

The medtech industry’s impressive venture funding activity was an anomaly in 2020, when most other sectors were floundering to stay afloat amid the COVID-19 pandemic.

A year later, as businesses around the globe returned to (somewhat) normal operations and overall VC activity hiked back up, medtech continued to ride that wave, coasting to its highest-ever annual funding total by the end of 2021.

According to an Evaluate Vantage analysis, that total clocked in at $9.9 billion, but our count pushes the tally well over the $10 billion mark, thanks to the inclusion of a handful of massive rounds from startups like Noom, XtalPi and Insitro that were left off Evaluate Vantage’s list. With those added into the mix, 2021’s total looks more like $11.2 billion.

Whatever the final amount, it easily surpasses previous years, even dwarfing the previous record holder—2017’s $7 billion total—by a mile.

As in previous years, while the overall funding amount surged upward, it was split across ever fewer funding rounds. Per Evaluate Vantage, medtech companies closed just over 170 rounds in 2021, the lowest count in a decade’s worth of analysis and the first to fall below 200.

Of course, fewer rounds and a higher fundraising total mean the average size of each round skyrocketed. Indeed, throughout the year, Fierce Medtech covered about three dozen funding hauls that fell within the nine-figure realm, compared to fewer than 20 that reached past $100 million in 2020.

Leading the pack was Caris Life Sciences, which has built an artificial-intelligence-powered multiomics sequencing platform in hopes of developing liquid biopsy tests to detect early-stage cancers from a single blood sample. The Texas-based company raked in $830 million in May to scale up the platform, outstripping 2020’s list-topper, the $700 million brought in by Verily in December of that year.

Caris’ reign on the list exemplifies many of the hottest trends in medtech’s VC activity in recent years. As in 2020, the majority of last year’s top 10 fundraisers are developing in vitro diagnostics, genomic sequencers or AI technology—or, like Caris, some combination of the three. The outliers on the list, meanwhile, run the gamut from surgical robotics to stroke devices to telehealth.

Below, find our full rundown of the companies that rose to the top of an already chart-topping year for VC funding. — Andrea Park

1. Caris Life Sciences

By Andrea Park

Amount: $830 million
Round: undisclosed
Date announced: May 11, 2021
Disclosed investors: Sixth Street, T. Rowe Price Associates, Silver Lake, Fidelity Management, Coatue, Columbia Threadneedle Investments, Canada Pension Plan Investment Board, Millennium Management, Neuberger Berman Funds, Highland Capital Management, Rock Springs Capital, OrbiMed, ClearBridge Investments, Tudor Investment Corporation, Eaton Vance Equity (Morgan Stanley), Pura Vida Investments, First Light Asset Management

Caris Life Sciences is no stranger to VC megarounds, having made it midway down last year’s iteration of this list courtesy of an October 2020 equity financing haul that clocked in at $235 million. Less than a year later, the sequencing technology developer more than tripled that take, landing itself at the top of this year’s list.

The $830 million Caris raked in last May sent the Irving, Texas-based startup’s lifetime fundraising total well past the $1 billion mark and ratcheted up its valuation to more than $7.8 billion.

At the time, Caris said the Sixth Street-led round would go toward the ongoing development of its multiomics sequencing platform.

The technology combines whole exome and transcriptome sequencing, protein analysis and a set of artificial intelligence models to analyze all 22,000 of a patient’s DNA and RNA genes and spot cancer-related pathogens, bacteria, viruses and fungi.

Currently, the technology is used primarily to provide oncologists with a comprehensive assessment of the unique genetic makeup of each cancer patient to better shape treatment. Looking ahead, however, Caris is planning on using its sequencing and AI software to develop liquid biopsy tests that would be able to detect a variety of early-stage cancers from a single blood sample.

Outside of its clinical work, Caris also partners with biopharmaceutical researchers. In addition to offering up its sequencing technology to help drug developers identify potential new targets, the company automatically connects clinical researchers to potential trial participants selected from the patient pools of cancer centers around the U.S. through its Caris Pharmatech platform.

Alongside the expansion of its software offerings, Caris has also spent the last year building out its executive team.

Two of its new additions are veterans of Medtronic: Mike Weinstein, the devicemaker’s former senior VP of strategy, joined Caris as chief financial officer, while Rob Clark came aboard as chief communications officer after holding corresponding roles at both Medtronic and ExxonMobil. Caris also recruited Milan Radovich, Ph.D.—an associate professor at the Indiana University School of Medicine and VP of oncology genomics at Indiana University Health—as its chief precision medicine officer.

2. CMR Surgical

By Conor Hale

Amount: $600 million 
Round: Series D  
Date announced: June 28, 2021 
Disclosed investors: SoftBank’s Vision Fund 2, Ally Bridge Group, RPMI Railpen, Tencent, Chimera, Lightrock, Watrium, Cambridge Innovation Capital, PFM Health Sciences, GE Healthcare 

Robotic surgery has made major strides in recent years. The field has evolved to favor smaller and more modular machines that can be used in a variety of settings instead of the hulking, octopuslike installations that may require more space, structure and sterling.  

That’s been CMR Surgical’s value proposition from the start: to provide a next-generation system that can bring the benefits of robotic precision and minimally invasive procedures to more people in more places. And after raising $600 million in the middle of last year, it has the means to pursue a wide international audience. 

In the months following its massive series D financing in June 2021, the U.K.-based company expanded its commercial footprint within Europe, South America, the Middle East and South Asia. Before the June fundraise, CMR had already introduced the system in India and Australia. 

And last November, the company scored its 11th national regulatory approval, with a green light in Brazil, followed shortly by the first uses of its cart-based Versius robot in an Italian public hospital for thoracic and general surgery. 

The minimally invasive Versius system includes multiple robotic arms, with each mounted atop their own wheeled cart. This allows the system to be assembled in different configurations and operating rooms while being controlled by the surgeon from a central console. 

By the end of this January, CMR Surgical had placed systems in the United Arab Emirates, Egypt and Pakistan, with focuses on urology. It had also set up a new commercial hub in Poland aimed at Central and Eastern Europe. 

Late 2021 also saw CMR Surgical announce plans to open a 75,000-square-foot manufacturing facility in the U.K., close to the company’s Cambridge headquarters, to help fuel its global endeavors. 

3. Noom

By Conor Hale

Amount: $540 million 
Round: Series F 
Date announced: May 25, 2021  
Disclosed investors: Silver Lake, Oak HC/FT, Temasek, Novo Holdings, Sequoia Capital, RRE, Samsung Ventures 

Noom, the developer of digital coaching programs for wellness and weight management, collected about $540 million last year to help transform its behavior-nudging platform into a range of virtual treatments aimed at high blood pressure, diabetes, stress and poor sleep. 

The financing round clocked in at nearly 10 times the size of its previous VC fundraising in 2019—a measure, in no small part, for how much the world has changed during the COVID-19 pandemic. Many telehealth companies accrued new value amid the rapidly accelerating demand for digital health programs that users can tap into from inside their own homes. 

Noom—which by its May 2021 series F round had amassed a network of more than 3,000 full-time health coaches—had already been working with glucose monitoring company LifeScan on the development of a digital pilot program focused on tracking Type 2 diabetes and weight loss. 

That project, launched in 2020, would see LifeScan’s OneTouch Reveal app and its line of blood sugar meters and test strips connect with Noom’s online diabetes management hub. This allowed users to track their readings on a mobile device and share statistics with their healthcare providers and others. That year also saw Noom form a partnership with life sciences services provider Eversana to help track medication adherence. 

Meanwhile, less than six months after raising more than half a billion dollars, Noom launched Noom Mood, a program aimed at reducing stress and its second consumer commercial product to launch after its weight loss platform. 

“A stress management product has been a top request from our Noom community,” co-founder and CEO Saeju Jeong said in an October 2021 statement. “Expanding our platform to include Noom Mood is a big step toward leveraging our behavior change expertise across the health spectrum while delivering increased value to our customers.” 

The program offers daily, 10-minute lessons that incorporate aspects of cognitive behavioral therapy, dialectical behavioral therapy and acceptance commitment theory that aim to instill healthy mental habits and coping mechanisms alongside human coaching. 

4. XtalPi

By Andrea Park

Amount: $400 million
Round: Series D
Date announced: August 12, 2021
Disclosed investors: OrbiMed Healthcare Fund Management, HOPU Investments, Sequoia Capital, Sino Biopharmecutical, 5Y Capital

Like several of its peers at the top of 2021’s VC funding pile, XtalPi’s latest nine-figure financing arrived less than a year after its previous nine-figure financing. The $400 million it secured in August 2021 followed soon after a $318.8 million series C locked down in September 2020.

XtalPi builds artificial-intelligence-based software aimed at helping pharmaceutical companies identify and model promising new small-molecule drug compounds. Its series D round was allotted to building out the flagship Intelligent Digital Drug Discovery and Development, or ID4, platform as well as supporting new and ongoing pharma partnerships.

The platform is powered by more than 100 machine learning, deep learning and natural language processing AI models that sift through a massive library of molecules to predict which combinations of molecules will best target a certain condition or disease. Since the series C, XtalPi has also begun adding real-world lab testing data into the platform’s library to help build “digital twins” that can model the potential effects of each AI-selected compound.

The back-to-back supersized funding rounds sent the Chinese company’s valuation surging to about $2 billion.

It was co-led by OrbiMed Healthcare Fund Management and HOPU Investments, which together took over the headlining spot from the series C’s trio of leading investors: SoftBank Vision Fund 2, PICC Capital and Morningside.

XtalPi has said its platform has already been used to help pharmaceutical partners like Pfizer, 3D Medicines, GeneQuantum Healthcare and Huadong Medicine identify more than 100 small-molecule drug candidates.

Since roping in its latest influx of cash, the startup has inked a handful of new R&D collaboration deals. In quick succession between September and October of last year, XtalPi signed on Sedec Therapeutics and Acerand Therapeutics for new drug discovery deals—focusing on autoimmune diseases and cancer, respectively—and also expanded its existing collaboration with Signet Therapeutics.

5. Insitro

By Conor Hale

Amount: $400 million 
Round: Series C 
Date announced: March 15, 2021  
Disclosed investors: Canada Pension Plan Investment Board, Andreessen Horowitz, T. Rowe Price Associates, Casdin Capital, BlackRock, Arch Venture Partners, Foresite Capital, GV, Third Rock Ventures, Two Sigma Ventures, HOF Capital, Alexandria Venture Investments, Temasek, Softbank Investment Advisors

After inking discovery deals with Big Pharma companies such as Gilead Sciences and Bristol Myers Squibb, artificial intelligence developer insitro landed a $400 million funding round to catapult its efforts to find drugs for diseases like amyotrophic lateral sclerosis, dementia and nonalcoholic steatohepatitis. 

The proceeds were also slated to expand the company’s pipeline and help in-license assets that had been explored through insitro’s target and biomarker discovery work. The money was also expected to fund the development of stem cell models of neurodegenerative diseases, which machine learning models could then use to study how different conditions may affect varying patient populations. 

The series C was a big jump from insitro’s previous fundraising less than a year before, with $140 million that helped build out its predictive disease models and in vitro experiments following its 2018 launch. 

In between those two rounds, insitro acquired Haystack Sciences in October 2020 to gain access to its DNA-encoded chemical libraries. Used to feed massive amounts of information on small molecules to its machine learning models, the data libraries will help underpin insitro’s in-house ability to run integrated drug discovery and early development programs. The financial terms were not disclosed. 

“Machine learning was transforming the world sector after sector, but it really wasn’t having as much of an influence in the life sciences. The critical limitation was the availability of high-quality data,” founder and CEO Daphne Koller said in a January 2021 interview for Fierce JPM Week.  

“I realized that now we’re finally at the moment in time where machine learning has matured to the point it could make a difference and that biology had developed a suite of tools that enable the right kinds of data to be generated at scale,” Koller noted. 

Most recently, this past January insitro announced new hires aimed at further buttressing its drug discovery work. Facebook’s Theofanis Karaletsos was named VP of data science and machine learning, while Eurofins Discovery’s Erin Berg was tapped to be VP of biomarker sciences. Martha Rook joined as chief technical operations officer from Sigilon Therapeutics, while Jevan Soo Lenox will serve as chief people officer after holding the same position at Stitch Fix. 

6. Kry

By Andrea Park

Amount: $316 million
Round: Series D
Date announced: April 27, 2021
Disclosed investors: CPP Investments, Fidelity Management & Research, Ontario Teachers’ Pension Plan, Index Ventures, Accel, Creandum, Project A

No tears here: Swedish digital health startup Kry—which translates to “in good health” in the company’s native tongue—more than doubled its lifetime fundraising total in April 2021.

The series D brought in 262 million euros, or about $316 million, at the time. That easily dwarfed Kry’s last major haul, a 140 million euro series C in January 2020, and just about tripled its valuation to $2 billion.

Kry said it would direct the new funding toward growth in multiple directions—expanding not only the technological capabilities of its suite of telehealth tools but also the physical footprint of the platform, with an eye toward bringing the technology to millions more patients in Europe.

At its core, Kry’s platform—which operates under the moniker “Livi” in France and the U.K.—remotely connects patients and their healthcare providers through video consultations and instant messaging, which can be accessed either through an online platform or smartphone app.

New features Kry said it would begin to explore last year included new patient-matching and triage tools for physicians, expanded support for mental health and chronic health conditions, more personalized treatment plans and access to a wider range of providers including psychologists, dermatologists, physiotherapists and pediatricians.

After reporting 100% year-over-year growth in 2020 amid the growing demand for telehealth options at the height of the COVID-19 pandemic, Kry also said it would attempt to keep that momentum going by hiring more employees and exploring new acquisitions and partnerships.

It’s already checked several of those boxes: In the months since it closed the series D, the Swedish startup signed a new partnership deal with French clinic system Elsan, acquired behavioral healthcare group PBM to add more virtual and in-person psychology services to its portfolio and began rolling out a new mobile-first cognitive behavioral therapy module on its platform, targeting mental health issues like depression, anxiety and stress.

7. Freenome

By Andrea Park

Amount: $300 million
Round: Series D
Date announced: December 7, 2021
Disclosed investors: Perceptive Advisors, RA Capital Management, a16z Life Sciences Growth Fund, BrightEdge Ventures, Artis Ventures, Bain Capital Life Sciences, Catalio Capital Management, Cormorant Capital, DCVC, Farallon Capital Management, Fidelity Management & Research, GV, Janus Henderson Investors, Kaiser Permanente, Novartis, Polaris Partners, Ridgeback Capital Management, Roche Venture Fund, Rock Springs Capital, Sands Capital, Section 32, Soleus Capital Management, T. Rowe Price Associates, ArrowMark Partners, Byers Capital, Eventide Asset Management, HBM Healthcare Investments, Intermountain Ventures, Logos Capital, Pura Vida Investments, Suvretta Capital Management

Freenome is another member of that exclusive club of medtech startups to close nine-figure funding rounds not just more than once—already an enviable feat—but in rapid succession, no less.

Barely a year after a $270 million series C landed it in the No. 3 spot on 2020’s list of the industry’s biggest funding rounds, the cancer blood test developer upped the ante, closing a $300 million haul with only a few weeks left of 2021.

Joint leaders of that round were Perceptive Advisors and RA Capital Management, while more than two dozen other investors made up the balance. That group included healthcare heavyweights like Roche, Novartis and Kaiser Permanente plus Alphabet’s venture arm GV, among others.

Freenome said the series D proceeds will be split between continuing the development of its colorectal cancer screening test and advancing its diagnostic technology into other cancers.

That technology applies machine learning and other artificial intelligence algorithms to a blood sample to analyze genomic, transcriptomic, methylomic and proteomic makeup. It looks for biological indicators of cancer that come from tumors and elsewhere in the body, with an aim of catching cancer well before symptoms begin to show.

So far, the first test has been proven to detect stages 1 and 2 colorectal adenocarcinoma with 94% sensitivity and later-stage colorectal cancers with 91% sensitivity. Another iteration of Freenome’s technology, meanwhile, was proven in a recent retrospective study to spot stages 2, 3 and 4 pancreatic cancer with 93% sensitivity.

Spoiler alert: Freenome has likely already secured its spot on the 2022 version of this list. In January, just over a month after closing its series D, the company received another $290 million from longtime investor Roche, sending its lifetime funding past the $1 billion threshold.

At the time, Freenome CEO Mike Nolan told Fierce Medtech in an interview that the capital infusion was “really, really motivating” and would help the startup branch out even further into tests to detect multiple types of cancer at once—some of which were slated to begin clinical trials in February.

8. Element Biosciences

By Conor Hale

Amount: $276 million
Round: Series C 
Date announced: June 29, 2021  
Disclosed investors: Janus Henderson Investors, Logos Capital, Meritech Capital Partners, Morgan Stanley Counterpoint Global, T. Rowe Price, Fidelity Management, Foresite Capital, JS Capital Management, RA Capital Advisors, Venrock

Despite having not yet launched its first product, DNA sequencing upstart Element Biosciences was able to more than double its lifetime VC haul last year, with $276 million to help get its low-cost, benchtop-sized analyzers off the ground. 

The San Diego-based company’s series C funding outpaced the $110 million it gathered during an extended financing round just the year before—all dollars for a war chest Element hopes to use to compete with the genetics giant just down the street, Illumina. 

It’s not the only company to secure a hefty VC round while planning to chip away at the global DNA sequencing market, where Illumina enjoys a 75% market share. Element’s $276 million just edges ahead of Oxford Nanopore’s $271 million take, which also made our list. 

Shortly after its fundraising, Element announced new hires to help it gear up for its product rollout. Bruker Nano Surfaces’ Jordan Neysmith joined as VP of engineering, BridgeBio’s Brian Stolz was named chief people officer and Multi’s Diana King came on board to be VP of customer support. Prior to that, the company began laying the groundwork by hiring Thermo Fisher Scientific’s Jeff Journey as chief commercial officer and BD’s Jeff Labbadia as VP of operations. 

More recently, this past February saw Element complete its acquisition of Loop Genomics to help bolster its sequencing offering, dubbed Aviti.  

Loop uses PCR technology to amplify individual strands of DNA on a short-read sequencing platform, attach unique barcodes to random sections of each copy of the genetic material and allow sequences to be recombined back into a single molecule using the overlapping segments to simulate long-read sequencing data from short-read systems. 

9. Oxford Nanopore Technologies

By Andrea Park

Amount: $271 million
Round: undisclosed
Date announced: May 4, 2021
Disclosed investors: IP Group, Temasek, Wellington Management, M&G Investments, Nikon

How does a startup follow up a year filled with three separate venture funding rounds that brought in more than $300 million in total? According to Oxford Nanopore Technologies, simply raise nearly the same amount in a single round to kick off the following year, then send earnings skyrocketing in a hugely successful IPO a few months later.

Oxford Nanopore’s wildly lucrative 2021 began with a 195 million pound sterling VC round in May, which converted at the time to about $271 million. The bulk of the financing came from new investors in the U.K.-based company, including Temasek, Wellington Management, M&G Investments and Nikon, while the rest came from existing backers like IP Group.

At that point, Oxford Nanopore’s fundraising total had tipped past $1.1 billion, and it was estimated to be valued at around $3.4 billion.

By the end of September, that valuation had surged to more than $6.8 billion after the company and its shareholders sold more than $700 million worth of new and existing shares in its initial public offering on the London Stock Exchange.

In its public debut, the share price jumped nearly 150% from the 4.25 pound point set by Oxford Nanopore. And while that price went on to crest at an all-time high of 7.10 pounds in December, it has since plummeted to its lowest levels yet. At the end of February, shares reached an all-time low of 3.91 pounds and have continued to hover around that price in the ensuing weeks.

That dropping stock price could possibly be linked to a simultaneous drop in demand for COVID-19 tests as the pandemic wanes in the U.K., where Oxford Nanopore received government backing to roll out its LamPORE test kit.

The company’s COVID tests and other offerings stem from its nanopore sequencing platform, which is able to analyze a single RNA or DNA molecule at a time and can be used to categorize brain tumors, sequence chromosomes, track the spread of infectious diseases and more.

In a study published in March 2022, for example, researchers were able to use the genetic sequencing technology to create a test that can screen for more than 50 genetic neurological and neuromuscular diseases at once—cutting down their traditional time to diagnosis by weeks or even years.

10. Imperative Care

By Conor Hale

Amount: $260 million 
Round: Series D 
Date announced: July 15, 2021 
Disclosed investors: D1 Capital Partners, HealthCor Investments, Innovatus Capital Partners, Ally Bridge Group, Bain Capital Life Sciences, Ascension Ventures, Delos Capital, Rock Springs Capital, Amed Ventures 

Rounding out our list is Imperative Care, which is planning to build itself into a major provider of devices for the treatment of stroke. The California-based company’s series D more than tripled the amount raised during its previous financing round, which netted $85 million in December 2019. 

Imperative counts FDA clearances for two product platforms: a line of large-bore intracranial access and navigation catheters and the Zoom aspiration system for ingesting and removing blood clots from a blocked artery. 

But that’s not all. Hand-in-hand with the company’s VC round came the announcement of its acquisition of a former spinout focused on developing thrombectomy hardware for the arms and legs that can operate without the use of clot-dissolving medications. 

Truvic Medical, which began life as a project inside Imperative before setting off on its own in early 2020, will serve as a wholly owned subsidiary and maintain its brand name and founding leadership. 

After raising more than a quarter of a billion dollars, Imperative launched a prospective clinical trial of its Zoom 88 Large Distal Platform, a stroke-specific catheter that has been cleared for accessing blood vessels within the brain but has not received an FDA green light for directly aspirating and removing a blood clot. 

At 0.088 inches, the goal of the catheter’s larger bore is to be able to deliver stronger suction forces and remove a clot in one pass without having to break it apart first or trap it with a stent-like retriever. 

Most recently, this past February Imperative launched the Zoom POD addition to its system, which integrates a sterile clot filter device within the aspiration tubing. This allows the surgeon to quickly see the clot as it is extracted from the patient and confirm a successful capture.  

Original Article: (https://www.fiercebiotech.com/medtech/top-10-medtech-vc-rounds-2021)