The Global Startup Ecosystem Report 2021 Life Sciences Edition

Global Funding and Performance Trends

Life Sciences Unicorns

In 2020, the global Life Sciences sector saw its biggest increase in the number of unicorns since 2016, with 24 unicorns created that year, up 71% from the year before, and over four times the number of unicorns in 2016. We can expect to see even higher growth in Life sciences unicorns this year. 34 companies have achieved unicorn status in the first half of 2021 alone, and there are now more than 100 Life Sciences unicorns globally.

Asian ecosystems have created at least one unicorn a year since 2016, with 2020 being their best year so far, when eight Asian Life Sciences companies achieved unicorn status, all in China, with the majority located in Shanghai. 2019 was a good year for Europe, with five new unicorns created, just one less than North America in that period. North America is poised to have a record year for Life Sciences unicorn creation. There has been a steady increase in the number of Life Science unicorns in North America, from six in 2019 to 15 companies achieving unicorn status in 2020. That number has already increased by nearly 80% in the first half of 2021. The MENA region had one new entrant to the unicorn club in 2020, its first since 2012.

Life Sciences Funding

While Series A funding plateaued in the last two years for its peer sub-sectors, Life Sciences funding continues to see considerable growth since 2019 in terms of both the number of deals and investment amounts. Between 2015-2016 and 2019-2020, global Series A funding in Life Sciences startups increased by 103%, despite a slight decrease in funding in 2019. 2020 was a high-growth period for Life Sciences. The total amount of Series A funding in the sub-sector was 16% higher than 2018, and 49% higher than 2019. This change is likely due to investors’ focus on more quality rounds and in specialized subcategories of Life Sciences.

The average deal size for Series A investments in Life Sciences has always been higher compared to the global average across other sub-sectors, and that difference is becoming increasingly prominent as more money flows into this sub-sector. In 2014, the average Series A amount in Life Sciences was $2 million greater than the average deal size for all other sub-sectors. In 2020, while the average Series A for other sub-sectors has also increased by $1.97 million, the average Life Sciences Series A amount is now over $8 million more than other sub-sectors.

Similarly, the average deal size for Series B+ funding in Life Sciences has increased significantly in the last ten years, with the biggest growth occurring since 2019. In the first five months of 2021, deal counts for Series B+ investments have been lower than in prior years, but the average deal amount is $81 million, with four rounds by startups headquartered in Boston accounting for the majority of the large deals. This amount is already twice the average amount observed in 2020, and four times the average amount ten years ago. This is consistent with the overall pattern in later-stage funding globally. Over $18 billion in Series B+ rounds was invested in Life Sciences in 2020, nearly double the amount in 2019.

Life Sciences Exits

After a dip in the number of exits in 2019, Life Sciences exits have been increasing since 2020, accounting for 18% of overall exits globally. The Life Sciences sub-sector is seeing strong exit growth in nearly all regions around the world, particularly in North America, Asia, and Europe. Latin America, MENA, and Oceania have relatively slower exit growth in recent years.

Life Sciences exit amounts have been consistently higher than in other sub-sectors in the last five years and are growing even faster with renewed interest in the sub-sector in recent years. In 2019, Life Sciences exits contributed $48 billion to the global economy, $25 billion more than the next largest sub-sector by exit value, i.e. Fintech at $23 billion. In 2020, Life Sciences exits accounted for a whopping $96 billion, $45 billion more than Cybersecurity, which had the next largest share of exits globally that year.