State of the Landscape
With this article we want to update you on investment deals and activity in MedTech, Diagnostics and Digital Health over Q4 2023. We specifically focus on all venture financing deals and types of M&A activity across European companies. We also elaborate on one early-stage and one later-stage deal made this quarter.
An overview
Since the beginning of Q4 in October, 44 deals have been made in the fourth quarter across the European MedTech, Diagnostic and Digital health sectors, totaling $2,380M. Of the investment activities, 28 were capital raisings through venture financing and 16 deals consisted of M&A. The majority of deals were made in October, for a total value of $130.7M. Conversely, November and December had higher deal values, at $714M and $1,535M respectively (Figures 1A,B).
The last quarter of 2023 has seen two major M&A deals in November and December encompassing ~75% of the total deal value. On November 1st, Inari Medical, announced the acquisition of LimFlow, a pioneering company developing technologies aimed at limb salvage for patients with chronic limb threatening ischemia (CLTI), consisting of $250M cash upon closing, and $165M in commercial milestone payments over 2025-2027.
In addition, December 15th marked completion of Carl Zeiss Meditec acquiring 100% shares of the Dutch Ophtalmic Research Center (DORC) from the French investment firm Eurazeo for a mere $1,077.5M. DORC’s products are used by ophthalmic surgeons around the world to treat a wide range of vision-threatening conditions. With the acquisition, ZEISS will expand its position in the vitreo-retinal (VR) surgery segment, further strengthening its position as the fastest growing manufacturer of ophthalmic medical devices globally.
Investment focus has been diverse this quarter, ranging over 13 different equipment types (Figure 3). Almost half of the investment activity (20) has been around in vitro diagnostics and Healthcare IT, followed by general surgery devices (7) and cardiovascular devices.
Highlights
We will cover one selected venture financing deal and one acquisition to shed more light on interesting financing deals in the sector.
Aether Biomedical raises $5.8M in Series A Financing – 13/11/2023
Aether Biomedical, a biotech company creating cutting-edge bionic prosthetics, today announced the successful conclusion of a $5.8 Million Series A funding round, led by J2 Ventures and Story Ventures. The round also included participation from existing partner, Chiratae Ventures. The new capital will enable Aether’s experienced team to expand manufacturing options for their premier product, The Zeus hand, and advance research and development, with the mission of creating healthcare technology and robotics that are based on human-centered design.
Notably, Aether has committed 75% of its current workforce to research and development. “I founded Aether Biomedical with a resolute commitment to make bionics accessible for all people,” said Dhruv Agrawal, CEO and co-founder of Aether Biomedical. “The Zeus hand has unmatched intelligence and answers an unmet need in upper limb prosthetics. We know that upper limb amputees want stronger grips and less downtime if their prosthesis needs maintenance. As such, we have developed new cloud-based technology, akin to modern smart home devices, to increase communication between provider and patient, shortened the time of maintenance by sending parts directly to providers, and improved grip strength by 30-40% over other market options. This funding will support these continued initiatives – all in the service of helping those with upper limb prosthetics function with more ease.”
Aether Biomedical has been fitting the Zeus hand through orthotic and prosthetic care providers in the U.S. Additionally, in Europe, Aether has multiple clinics they have partnered with, such as Inovamed in Poland with plans for continued expansion.
Alex Harstrick, Managing Director of J2 Ventures, said: “The Zeus hand is modernizing technology for upper limb patients and has been purpose built to keep human beings at their top potential. We are thrilled to be able to support Aether Biomedical in this funding round to help the end user get the experience they need in a large and important market that has been underserved.”
Brian Yormak, Managing Director of Story Ventures echoed Harstrick’s sentiment: “We have been supportive of Aether from their early days, and we are as bullish as ever on the impact of connected hardware within healthcare. Patient-provider communication, device functionality, patient insights, and eventual outcomes will be meaningfully improved through these emergent technologies. We are honored to support Aether as they lead innovation in this space. Consistent daily use with upper-limb prostheses over time can be a challenge for patients given obstacles with maintenance and repairs.”
Sarra Mullen, Certified Prosthetist and Head of U.S. Operations for Aether Biomedical prioritizes accessibility and ease for Aether’s users. “We have the only hand on the market that doesn’t need to be send back to the manufacturer if it needs maintenance. We send the replacement parts to the clinician who services the hand in their clinic. This shortens the duration of getting it fixed from 6-8 weeks to next day air.” Of note, the Zeus hand is also approved for coverage by Medicare and most commercial payers.
Ulysses Biomed Spa announced the acquisition of Hyris Limited for EUR26.2 million– 4/122023
Together with our new colleagues from Ulisse Biomed, we will constitute a new united entity that operates in biotech as an integrated group. We will do so with a distinctive positioning, which is guaranteed by the control of the entire industrial chain and by the innovative tech features of the reagents designed and produced by Ulisse Biomed, on the one hand, and of Hyris’ RT-PCR devices and software capabilities, on the other.
The integration of Ulisse Biomed and Hyris is based on the strong complementation of their respective technologies, which, combined, allow them to exploit each other’s strengths, defining a portfolio of distinctive competencies. Through the synergetic combination of the aforementioned technologies, the new entity resulting from the operation aims at providing an integrated solution of products with high-end performance, at a competitive cost, such as to favor a distinctive market positioning.
The synergy is both technological and business-related: from a technical point of view, the new entity would acquire a competitive advantage over the technology available on the market on all the components of the system (hardware, software and reagents). Moreover, the in-house availability of a complete, validated and vertically integrated technological platform – such as the one realized by Hyris – is, to date, the prerogative of a small number of large companies. This constitutes a strategic market advantage compared to the possibility of supplying only part of the system, being dependent on external partners for the missing components.
Stefano Lo Priore, Founder and CEO of Hyris, as well as its lead partner, said: “We are proud of this ongoing transaction between Ulysses Biomed and Hyris. We have a joint industrial project with a strong vision and which has already received excellent feedback from early customers on the joint proposition of our solutions. As a united team, we will be able to implement the project synergistically, and give birth to a unique and distinctive reality on the global, and even more so on the Italian, biotech scene.”
What does the Venture Finance team at FFUND do?
FFUND’s Venture Finance team helps building and strengthening companies’ propositions to raise capital in an investment round. We do this by offering a number of services: analyzing the companies’ performance through assessment of key indicators, designing the data-room, performing market analyses, company valuations and composing the business plan and teaser deck for investors. On top of that, the team leverages its network of investors to receive feedback on your proposition while serving as a warm introduction.
