13 January 2026

Healthcare venture markets regain momentum as capital returns, according to HSBC Innovation Banking

HSBC Innovation Banking’s 2026 Venture Healthcare Outlook points to improving investment conditions and cautious optimism for the year ahead

NEW YORK – January 13, 2026 – After several years of constrained capital markets and heightened investor caution, the healthcare venture ecosystem began to stabilize in 2025, setting the stage for a more constructive, though still selective, environment heading into 2026, according to HSBC Innovation Banking’s 2026 Venture Healthcare Outlook.

The downturn that followed the post-pandemic peak was marked by slower investment pace, limited IPO activity, and an increase in insider-led financings. While these conditions persisted into early 2025, sentiment shifted in the second half of the year as investment activity improved, exit markets reopened selectively, and macroeconomic pressures eased. Total healthcare venture investment rose to $60 billion across 2,167 deals in 2025, up from $45.4 billion in 2024, marking the strongest annual level since 2022.

Private M&A and IPO activity also picked up, reopening exit pathways that had been largely closed in prior years. While the recovery remains uneven, momentum accelerated into year-end, with Q4 2025 representing the strongest quarter for healthcare venture investment in three years, pointing to renewed investor confidence and improved liquidity conditions.

As highlighted in July, mega-rounds continued to play a defining role in healthcare venture markets. In 2025, $100 million-plus mega rounds represented roughly 43% of total healthcare venture investment, reinforcing their significance in driving capital deployment amid a selective funding environment.

“While it would be premature to say the downturn is fully behind us, conditions across healthcare venture markets have clearly improved,” said Jonathan Norris, Managing Director at HSBC Innovation Banking. “The market has shifted from survival to selectivity, with capital deploying more consistently, exit markets reopening, and investors re-engaging with private companies that used the downturn to strengthen fundamentals, advance clinical milestones, and demonstrate operating discipline.”

Four Key Takeaways to note as we enter 2026:

Investment activity increased year-over-year, with momentum building in Q4: Overall healthcare venture investment rose from 2024 levels, with activity improving across most subsectors later in the year as public markets performance strengthened and macro headwinds eased.
Exit markets reopened selectively, improving liquidity and sentiment: Private M&A and IPO activity picked up meaningfully in 2025, providing renewed liquidity across the venture ecosystem and marking a clear shift from prior years, even as the IPO window remains discerning.
Investor behavior shifted from defense to higher-conviction deployment: Insider-led rounds and extensions remained common, but companies with differentiated technology, strong clinical data, and clear commercialization paths increasingly attracted new investors with step-ups in valuation.
The outlook for 2026 is cautiously optimistic: Stabilizing valuations, improving macro conditions, and more active exit markets point to continued momentum in 2026, with reasonable investment growth and a stronger exit environment for well-positioned companies.

Looking ahead to 2026, HSBC Innovation Banking expects healthcare venture markets to continue their gradual recovery. Healthcare venture investment is projected to reach $65-$70 billion in 2026, supported by improving IPO conditions, increased M&A activity, and continued engagement from growth and crossover investors.

The 2026 Venture Healthcare Outlook analyzes investment, financing, and exit trends across the healthcare venture ecosystem, drawing on proprietary data and market insights from HSBC Innovation Banking.

To view the full report, visit: https://www.hsbcinnovationbanking.com/us/en/resources/2025-annual-venture-healthcare-report?cid=B:OSOC:10937621680:10893300135

Media Contact

Conor Gronbach
Communications Manager, CIB
HSBC Bank USA
conor.gronbach@us.hsbc.com

About HSBC

HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 57 countries and territories. With assets of US$3,234bn at 30 September 2025, HSBC is one of the world’s largest banking and financial services organisations.

Disclaimer

This material has been prepared and provided to you by members of the Corporate and Institutional Banking business of HSBC Bank USA, N.A. (“HBUS” or “we”). HSBC Innovation Banking is a business division with services provided in the United States by HBUS. Materials are being provided to you in connection with an actual or potential mandate or engagement and may not be used or relied upon by any other person or for any purpose other than as specifically contemplated by a written agreement with the issuer. We will not be liable for any liabilities arising under or in connection with the use of, or any reliance on, this document or the information contained within it. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. Distribution is restricted to the United States.

Information is for discussion purposes only. Presentment to you does not constitute in whole or in part, any commitment to extend or arrange credit, or underwrite, subscribe for or place any securities, or provide any other product or service in any jurisdiction. This document does not constitute an offer or solicitation for, or advice that you should enter into, the purchase or sale of any security, commodity, or other investment product or investment agreement, or any other contract, agreement, or structure whatsoever. Materials have been prepared without regard to your particular need, investment objectives, financial situation, or means. This document shall not be regarded as creating any form of adviser/client relationship, and HSBC may only be regarded by you as acting on your behalf as a financial adviser or otherwise following the execution of an engagement letter on mutually satisfactory terms.

This information is intended for your sole use, and not for general distribution. You are permitted to store, display, analyze, modify, reformat, and print the information for your own use. You are not permitted to publish, distribute, disclose, transmit, or otherwise reproduce this information, in whole or in part, in any format, to any third party without our expressed written consent.

We do not provide tax, accounting, or legal advice. Accordingly, you should seek advice based on your particular circumstances from your independent advisors. All United States persons (including entities) are subject to U.S. taxation on their worldwide income and may be subject to tax and other filing obligations with respect to their U.S. and non-U.S. accounts. Any discussion of U.S. tax matters contained herein is not intended or written to be used, and cannot be used in connection with the promotion, marketing or recommendation of avoiding U.S. taxes.

Any information contained in this material is not and should not be regarded as investment research, debt research, or derivatives research for the purposes of the rules of the Financial Conduct Authority, the SEC, FINRA, the CFTC or any other relevant regulatory body. It has not been prepared in accordance with regulatory requirements to promote the independence of investment research. Any opinions in this material are the opinions of the author and may be changed at any time without notice. Opinions expressed in this material may differ from the opinions expressed by other divisions of the HSBC Group, including its research department and corresponding research reports.

This material contains information relating to third parties. The information does not constitute any form of endorsement by these third parties of the products and/or services provided by HSBC or any form of cooperation between HSBC and the respective third parties. All trademarks are the property of their respective owners.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

Financial instruments described herein may not be suitable for everyone. You should not act upon the information contained in this document without consulting your business advisor, attorney, tax and accounting advisors. This material should not support the primary basis for investment or hedging decisions made.

The Information contained herein is not meant to be comprehensive. Information is derived from sources believed to be reliable but not independently verified. HSBC and third-party contributors do not undertake, and are under no obligation, to provide any additional information, to update this document, to correct any inaccuracies or to remedy any errors or omissions. Under no circumstances will HSBC or the third-party contributor be liable for (i) the accuracy or sufficiency of this document or of any information, statement, assumption or projection contained in this document or any other written or oral information provided in connection with the same, or (ii) any loss or damage (whether direct, indirect, consequential or other) arising out of reliance upon this document and the information contained within it.