The IT and AI sectors dominated venture capital funding in 2023. According to Crunchbase, global AI funding in 2023 was nearly $50 billion. While much of the venture capital landscape was dry, AI saw a 9% increase in global VC funding since 2022.

Global Funding by Sector in 2023 (Crunchbase)

The VC landscape changed as we concluded the first quarter of 2024. Biotech silently dominated venture capital, even surpassing AI. Crunchbase reports that healthcare and biotech raised $15.7 billion, accounting for 24% of global VC funding in Q1 2024.

On the other hand, startups in the AI sector raised $11.4 billion in Q1 2024, accounting for 17% of global VC funding.

Investors seem to recognize the potential of innovative biotech solutions, favoring this sector over the traditionally dominant IT and AI sectors.

Biotech Megadeals Flood the Q1 2024 VC Landscape

The number of U.S. megadeals ($100M+ rounds) in Q1 2024 further underscores the biotech boom.

Biotech startups captured the majority of these large funding rounds, indicating strong investor confidence in the potential returns from biotech innovations. This trend highlights the growing importance of biotech in the broader venture capital landscape.

Among the most notable late-stage deals was the $254 million Series E round for Freenome, a blood-based cancer diagnostics firm.

This South San Francisco-based company, which is developing a platform for early cancer detection using blood tests, has now raised more than $1.35 billion in total funding, according to Crunchbase data.

Other significant financing rounds include BioAge Labs, which secured $170 million in a Series D round.

The funding will be used for phase 2 clinical trials of azelaprag, an apelin receptor (APJ) agonist, in combination with Lilly’s soon-to-be-blockbuster Zepbound (tirzepatide).

Additionally, ProfoundBio, specializing in oncology, raised $112 million in a Series B round, and Human Immunology Biosciences, focused on autoimmune diseases, secured $95 million in a Series B round.

Biotech Investors Favored Novel Technologies

Another site, Drug Discovery Trends, shows global biotech funding in Q1 2024 was divided among five categories:

• Technological and Methodological Approaches - $2.23B
• Drug and Therapy Development - $1.81B
• Therapeutic Areas and Diseases - $1.15B
• Research and Manufacturing - $827M
• Other - $274M

1. Technological and Methodological Approaches:

This category encompasses companies focused on precision medicine, targeted drug delivery, drug discovery platforms, and non-invasive diagnostics. These approaches attracted $2.23 billion in the first quarter of 2024.

Freenome is a notable biotech startup in this category, raising $254 million in a Series E round for early-stage cancer detection.

Obsidian Therapeutics also secured $160.5 million in a Series C round for cell and gene therapies with pharmacologic operating systems.

2. Drug and Therapy Development:

Companies in this category are actively developing clinical-stage treatments, regenerative therapies, and pharmacologically active compounds.

Startups in this category secured $1.81 billion in funding.

Sionna Therapeutics raised $182 million in a Series C round for novel cystic fibrosis therapies, and Rakuten Medical, despite cutting workers earlier this year, attracted $119 million in a Series E round for precision-targeted cancer therapies.

3. Therapeutic Areas and Diseases:

Treatment development for cancer, autoimmune conditions, and heart disease fall under this category.

Therapeutic Areas and Diseases collectively raised $1.15 billion in Q1 funding. Notable raises include Alumis, which raised $259 million in a Series C round for precision medications targeting autoimmune diseases.

BioAge Labs also secured $170 million in a Series D round for treatments aimed at age-related diseases.

4. Research and Manufacturing:

This segment acquired $826.68 million in funding and includes biotechnology research firms and those specializing in proprietary manufacturing processes.

Prominent companies include Jixing Pharmaceuticals, which raised $162 million in a Series D round for cardiovascular and ophthalmic therapeutics development, and Areteia Therapeutics, which secured $170 million in a Series B round for respiratory disease treatments.

5. Other:

Companies that did not fit into the above categories were grouped under “other.”

Biotech startups here raised a total of $274.32 million in Q1 2024.

Notable companies in this category include Aqemia, which raised $32.5 million in a Series A round for its quantum and statistical mechanics algorithms for drug discovery, and Apollo Therapeutics, which secured $33.5 million in a Series C round to translate academic research into medicines.

Series-B and C Rounds Received the Most Funding

In Q1 2024, Series-B and C funding rounds attracted the most capital in the biotech sector, according to Drug Discovery Trends.

These rounds are critical for startups transitioning from research and development to commercialization.

The substantial funding at these stages indicates investor confidence in the scalability and market potential of these biotech innovations.

As investors favor mid-stage biotech startups with solid traction and proven innovations, biotech experts believe early-stage startups have equal potential.

“Young entrepreneurs and scientists, they have the true innovation. They have the real treatments that are going to come out in 10 or 20 years. I think we’re doing a disservice to science by not opening up some funding to these highly innovative approaches.”

Carolina Alarco, Founder of Bio Strategy Advisors

Investors are Funding the Healthcare Innovations of Tomorrow

The first quarter of 2024 has marked a significant shift in venture capital investment trends, with biotech startups leading the way in securing large funding rounds.

Here’s a short recap of the biotech boom:

• In 2023, IT and AI sectors led global funding.
• Q1 2024 saw biotech overtaking AI in global funding.
• U.S. biotech startups led in securing VC megadeals in Q1 2024.
• Key areas of biotech investment: precision medicine, targeted drug delivery, drug discovery platforms, non-invasive diagnostics.
• Series-B and C funding rounds received the most capital in biotech.

For biotech startups looking to navigate this dynamic and highly competitive landscape, securing the right funding is crucial.

Story’s Proven Track Record in Biotech

Story Pitch Decks has worked with dozens of biotech clients who have raised significant funding. We help turn complex scientific concepts into winning pitch decks.

“Keane and his team [at Story] are amazing. From distilling and honing your story to crafting and polishing the deck itself, the Story pitch decks team provides high-quality service with a rapid and efficient turnaround time.”

– Robert Bell, CEO & Co-Founder of Telo Therapeutics

“Keane and the STORY team have crafted two pitch decks for Nivoda, each one leading to a successful raise. With their help, we raised an $11M Series A round in 2022, and this year we signed a term sheet 12 days after STORY finished our Series-B deck. What we were particularly impressed by is the team’s ability to really understand our business model in a very short amount of time. Highly recommend.”

– Bas Lustenhouwer, CFO, Nivoda

Get in touch with Story Pitch Decks to see how we can help transform your innovative ideas into compelling pitches that attract investors.

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