Health, Wellness & Biotech IPO Startups Venture

Biotech Startup Funding Has Also Slowed In 2022

Illustration of biotech lab equipment

After peaking in 2021, venture funding to biotech startups slowed in 2022, with investment on pace to come in at least a third lower than last year’s levels.

The slowdown comes amid a broader pullback in global venture funding. Across all sectors, investment hit its zenith in November and has been cresting downward since. On the exit front, meanwhile, the pace of venture-backed IPOs has slowed to a crawl.

Biotech funding follows the general pattern. In the U.S., biotech startups have raised a total of $16.5 billion1 so far this year, or about $3.2 billion on average per month. In all of 2021, however, nearly $47 billion went into the space, an average of nearly $4 billion per month.

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For perspective, we lay out venture funding totals and round counts for U.S. biotech startups over the past five-and-a-half years below:

Pivot chart of US Biotech Startup Funding

Last year looks like an outlier

If we look at 2021 as an anomalously bullish period for venture funding, the trend lines for biotech don’t look so bad.

Should funding continue at its current pace this year, total investment will likely exceed 2020 levels, which were considered historically strong at the time. Big rounds are still getting done, with a few exceptionally large ones, including:

  • Resilience, a provider of biomanufacturing technology for producing complex medicines, raised $625 million this week in a Series D funding round.
  • Ultima Genomics, developer of a low-cost sequencing platform for delivering a $100 genome, said in late May that it secured approximately $600 million in backing as it emerges from stealth.
  • Eikon Therapeutics, which develops applications to apply live-cell super-resolution microscopy to drug discovery, announced in January that it raised $518 million in Series B financing.

So far this year, at least 46 biotechs have raised rounds of $100 million or more, per Crunchbase data. The median round size, meanwhile, is around $17 million.

Notably, the two largest funding recipients aren’t pursuing the familiar biotech model of developing therapies in-house and funding them through clinical trials. Rather, they’re offering technologies and platforms that other players in the industry can apply.

Chilly on the exit front

While venture funding continues to flow to biotech, the IPO pipeline remains mostly shut off. Few venture-backed companies have carried out public offerings in 2022.

A Crunchbase data dive identified just nine VC-funded biotech IPOs this year:


Another five U.S. biotechs that were not venture funded also went public, bringing the total to 14.

That’s a sharp downturn from last year, when 111 biotechs went public in the U.S., topping the previous peak of 91 in 2020, per The Wall Street Journal.

Falling share prices are a likely culprit in the slowdown. The Nasdaq Biotechnology Index is down about a third from peaks hit last summer.

Many recently public biotechs have fared much worse, including some of the biggest debuts of 2021.

One that fits this pattern is Sana Biotechnology, which focuses on utilizing engineered cells as medicines. The Seattle company went public in February 2021 at an initial valuation of $6.4 billion. Recently, its market cap was under $1 billion.

Recursion Pharmaceuticals, developer of a machine-learning-based drug discovery platform, is another high-profile laggard. The Salt Lake City company went public in April 2021 at a $2.7 billion valuation and has since shed more than half its value.

Companies that went public in 2022 also haven’t performed especially well. Most of the venture-backed biotechs on our list that began trading this year are now far below their former highs.

A global phenomenon

The slowdown in venture funding isn’t limited to U.S. biotechs. Globally, investment to the space is on track to come in well below last year’s highs, as illustrated in the chart below:

Pivot chart of Global Biotech Startup Funding

Still, if we look across the span of several years, funding still appears comparatively strong. If investment continues at the current pace, 2022 could likely top 2020 for total funding.

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Funding rounds included in this report are seed, angel, venture, corporate-venture and private-equity rounds in venture-backed companies. This reflects data in Crunchbase as of June 6, 2022.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Illustration: Li-Anne Dias

  1. As of June 6, 2022.


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