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Health tech companies in the United States and European Union have raised about $23 billion so far this year, a downward trend as the market recovers from massive investment in 2021, according to a Silicon Valley Bank report.

The report, which counts funding through September 30 this year, notes that the decline was particularly steep in the third quarter, falling 39% from the second quarter and 67% from the level of investment seen in the second quarter of last year.

Mega-rounds, or funding rounds worth $100 million or more, have fallen 40% from 2021, while the year so far has seen a 47% decrease in new unicorns , startups valued at over $1 billion.

Meanwhile, the report found no health-tech IPOs from venture-backed companies in the US and EU so far this year, while company performance that have become public in recent years have had a downward trend.

But there was a slight increase in merger and acquisition activity, although it declined as the year progressed. While there were 48 deals in the first quarter, there were only 30 in the third quarter. Median acquisition prices have fallen significantly as acquirers attempt to balance out the high valuations seen in recent years.

“We have moved from an era of growth at all costs to an era that emphasizes creating clear value, whether through improved health outcomes, access or affordability. investment has moved to earlier stages where valuations are corrected from last year’s sky-high levels,” the report’s authors wrote.

“With a record amount of dry powder available to health tech startups and mergers and acquisitions on the rise, there is still tremendous opportunity for health tech companies to grow.”

However, there have been other bright spots in health tech so far in 2022. Although investment has slowed further, mental health companies have actually seen median deal sizes and valuations increase.

Interest in platform tools addressing multiple mental health issues is growing, with platform companies earning 69% of investments so far this year, up from 51% in 2021. The report notes that the industry has seen more companies providing culturally competent mental health care.

“As the demand for HD care soars, we expect more point solutions to span the platform to grow their patient bases,” the report authors wrote. “Despite market saturation, valuations for point solutions have increased in 2022. Their focus on unique conditions enables high-quality, specialist healthcare, especially for higher-acuity HD disorders like treatment-resistant depression. , TOC, etc. Interestingly, the median point solution size in 2022 ($12 million) is a platform double ($6 million).”

Along with a growth in health tech companies founded by women, women’s health startups have raised $877 million so far in 2022. Although that figure is lower than the $1.4 billion in last year, the investments are 30% higher than the annual investment in 2020.

Fertility and pregnancy care was a large share of the women’s health market, accounting for 68% of investments.

“The increase in investment despite the broader market downturn is promising for the WH industry,” the authors wrote. “As these companies grow and mature, they can scale to serve more women and their diverse health needs.”