Mega-Round Momentum Drives Healthcare Venture Market Despite Investor Headwinds
(NEW YORK) – Mega-rounds propped up healthcare venture funding in H1 2025, even as early-stage financings declined, according to HSBC Innovation Banking’s newly released Midyear Venture Healthcare Report. Authored by Jonathan Norris, Managing Director at HSBC Innovation Banking, the third annual report highlights how investment dollars remained strong due to a surge in $100M+ rounds, even as deal volumes and first-financing activity dropped sharply in Q2 2025 amid investor caution.
Following a rebound year in 2024, the first half of 2025 saw a 20% drop-in investment activity in Q2, marking a clear return to investor selectivity amid macroeconomic uncertainty.
Despite this backdrop, overall dollars invested remained strong, thanks to a surge in $100M+ mega-rounds, which accounted for the vast majority of capital deployed into venture-backed healthcare companies. The report finds that the top 15% of companies successfully raised new investor-led capital, often at step-ups in valuation, while others resorted to insider-led rounds, consolidation, or shutdowns.
“This cycle continues to reward differentiation and scale with large investment,” said Jonathan Norris. “The bar for raising capital has risen, but there’s clear evidence that leading companies continue to attract significant investment, both early-stage companies with compelling technology and a strong investor base and later-stage deals in big markets who show significant revenue scale.”
Key Highlights:
- Biopharma: First-financing dollars dropped 60% from Q1 to Q2, with larger deals accounting for the preponderance of capital invested. Oncology, autoimmune and metabolic indications accounted for most of the mega round activity.
- Dx/Tools: First-financing activity remained soft, with top deals clustered around AI-enabled drug discovery and clinical decision support.
- Med Device: Overall funding is on a record-setting pace, however there was continued consolidation toward later-stage pivotal trial funding and commercialization efforts.
- Healthtech: One of the few sectors where first-financing activity increased, driven by AI-platforms, SaaS infrastructure, and payer-provider solutions.
The report also notes a narrow IPO window in biopharma, and two new first-half IPOs in both med device and Healthech. Norris believes there are select opportunities for IPO exits in H2, with late-stage pipeline strength in biopharma and companies with significant revenue scale in the other healthcare sectors.
To view the full report, visit https://www.hsbcinnovationbanking.com/us/en/business-stage/hsbc-healthcare-reports.
Media Contact:
Conor Gronbach
Communications Manager, CIB
Conor.gronbach@us.hsbc.com
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