AI Deal Activity Remains Strong in Healthcare Amid Decline in Fundraising; Silicon Valley Bank Releases 16th Edition of Healthcare Investments and Exits Report

Core Insights - AI-related deal activity in the healthcare sector is thriving despite an overall decline in fundraising, with a 20% decrease in companies not leveraging AI [1][2] - Healthtech is leading AI investment, with AI-related deals doubling over the past 12 months, indicating a strong market trend [2] - China is emerging as a significant player in global biotech, with biopharma licensing deals reaching $3 billion in the first half of 2025, surpassing total spending in 2024 [3] AI Spotlight - Back-office applications are a major focus for AI investment, accounting for 44% of all AI investment in the first half of 2025, aimed at reducing administrative burdens [5] - Half of the funding for diagnostics/tools companies is directed towards those utilizing AI, highlighting the growing importance of AI in this sector [5] Investment by Sector - Healthtech raised a total of $8.2 billion in the first half of 2025, marking the strongest half since H1 2022, with Series B deal sizes reaching $40 million, the highest in five years [5] - In the diagnostics/tools sector, while deal activity has slowed, Series A median pre-money valuations and deal sizes reached five-year highs at $38 million and $14 million, respectively [5] - Medical device investments have remained consistent, totaling between $3 billion and $4 billion every half since 2022, although macroeconomic factors may pose risks [5] Biopharma Insights - Late-stage biopharma companies are favored, with median pre-money valuations for Series C+ at $247 million, compared to $46 million for Series A and $87 million for Series B startups [5]