Part of the answer is obviously that our past experiences and successes fall within Drug Development – but also that both MedTech and Diagnostics seem to have a lower likelihood of getting to an exit once you have invested.
Defining the field for Medical Devices and Diagnostics can be challenging, but by using Pitchbook® industry codes in the figure below, our count is 30 EUR >50M transactions of VC funded EU HQ’ed companies in the period 2010 to 2020 on a background of 2,240 similar new companies financed during the same period – simplistically a success ratio of 1.3%.
Again using Pitchbook® industry codes, our comparable count for Biotechnology and Pharmaceuticals is 105 transactions based on 3,013 new companies and thus a success ratio of 3.5%. And apparently, the multiples are higher!
Accordingly, by those numbers, finding a successful European MedTech company is almost three times harder than finding a successful drug discovery company and you will be paid less …and we already think finding successful drug discovery companies is hard work 😊