In today’s Chart of the Week, we take a look at how healthcare and pharmaceutical startup valuations in the equity crowdfunding space have changed over the past three years.
- When looking at average valuations in the healthcare & pharmaceutical industries, we see a clear increase over the past three years, from $14.9 million in 2021, $34.7 million in 2022, $44.5 million in 2023, and $54.6 million in 2024 (YTD). This represents a three-year CAGR of ~54%.
- However, in statistical analysis, it is important also to analyze medians to ensure that outliers aren’t skewing the data.
- In this case, median valuations over time have a much tighter distribution ($10.3M in 2021, $20M in 2022, $17M in 2023, $14.9M in 2024).
- When the median and average for a data set are drastically different, the median is usually a better indication of the data’s central tendency.
- Therefore, using medians in this case, we can conclude that over the past three years, valuations in the ECF space for healthcare & pharmaceutical startups went up from 2021 to 2022 but have been slowly declining since.
- We also analyze how much these companies were able to raise in the equity crowdfunding markets during this three year period.
- We clearly see that both the average and medians declined between 2021 and 2023, and are now rising in 2024 YTD.
- Therefore, we can safely conclude that healthcare and pharmaceutical startups in the ECF space faced declining investment from retail investors from 2021 to 2023. However, this seems to be rebounding in 2024.
