Venture capital funding has slowed significantly worldwide, but the Massachusetts Life Sciences industry remains relatively stable. However, during the next six months, we don’t expect much new venture capital funding for new or existing life sciences startups.
Venture capitalists invested $4.1 billion into biotech and pharma companies in the first quarter of 2023 — a three-year low, according to data from PitchBook as reported by Boston Business Journal. Biotech firms have responded by putting more resources toward drugs that are closer to commercialization or key data readouts that can help them bring in revenue, according to BBJ.
We expect the R&D, manufacturing, medical devices, and drug discovery and commercialization companies to grow moderately, requiring appropriate sizes and types of real estate across Greater Boston. The venture capital will follow these companies, but the size of funding is likely to be smaller.
Overall, venture funding has declined in most sectors of the market.
New England companies reported 1,306 venture capital financings in 2022, a decrease of 14% from the 1,518 financings in 2021, according to the WilmerHale Venture Capital report. Total reported proceeds were $24.2 billion, down 36% from the $38.0 billion prior year.
A huge boost to the Life Science Sector will be the resurgence of the IPO market.