- SVB healthcare/life sciences head Megan Scheffel says the bank’s post-2023 approach is largely unchanged, backing venture-backed healthcare companies from early to late stage with banking and debt.
- 2025 healthcare investing is down overall but increasingly concentrated in fewer, larger rounds, with AI-driven mega-deals lifting average check sizes despite lower deal counts.
- Funding has shifted toward healthtech provider-operations tools while biopharma and diagnostics/tools have weakened, and the Series B “middle” is thinning with more unlabeled raises.
- In a more selective market, startups face higher bars to show defensible moats, clinical or revenue proof points, and capital efficiency to secure later-stage capital.
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Silicon Valley Bank’s healthcare/life sciences strategy, as articulated by Megan Scheffel, emphasizes continuity: SVB continues to focus on supporting companies along the growth continuum—from Series A through late rounds—with both banking and debt products, irrespective of whether market conditions are booming or contracting. She underscores that SVB’s mission is to partner with companies through their inflection points, and this has not changed following its failure in 2023.
Corroborating that, broader market data from SVB’s own reports (e.g. the 17th Healthcare Investments and Exits Report) shows total healthcare investment in 2025 was approximately $46.8 billion, down from higher peaks (e.g. 2021) but still at substantial levels; AI-driven health companies accounted for nearly half of all healthcare investment, while sectors like biopharma and diagnostics/tools experienced decrements of 19% and 33% respectively.
The trend toward fewer deals but larger sums is clear. Rock Health data shows that digital health funding for 2025 year-to-date through Q3 was approximately $9.9 billion across 351 deals, surpassing the same stretch in 2024. However, there were only 107 deals in Q3 alone, down from over 120 in previous quarters; yet 19 mega-deals ($100M+) had already closed, more than all of 2024. Average deal size rose to $28.1 million compared to $20.4 million in 2024.
These shifts have sectoral implications. Healthtech, especially provider operations solutions (non-clinical workflows like scheduling, documentation, billing), is attracting large portions of investment—44% of healthtech investment in SVB’s latest report. While biopharma remains essential, its funding is under pressure unless companies show certain proof points or clear moats. Series B rounds are thinning, and many fundraises are “unlabeled,” complicating benchmarking.
Strategically, this environment rewards companies with strong management, differentiated IP, clear clinical or revenue signals, capital efficiency, and solid planning. It also raises barriers for emerging or early stage companies lacking those, especially in biopharma or diagnostics. Financial institutions like SVB may lean more into structuring debt or banking relationships to retain presence even when equity investment is constrained. Further, M&A and consolidation may play a more important role as exit or survival strategies.
Open questions: How sustainable is the AI-led investment surge, especially with regulatory, clinical, and reimbursement risks? Will the thinning of middle-round and Series B funding lead to a “growth gap”—firms unable to scale despite promising early indicators? To what extent will the trend toward fewer but larger fund investments shift power toward generalist “mega” VCs and incumbents, potentially squeezing out niche or frontier innovation?
Supporting Notes
- SVB’s healthcare investment in 2025 totals ~$46.8 billion, a ~12 % decline from previous peak levels.
- AI companies received over $18 billion in 2025, comprising 46 % of total healthcare investment.
- Sectors like biopharma and diagnostics/tools dropped sharply: −19 % and −33 % respectively.
- Rock Health data: through Q3 2025, digital health funding reached $9.9 billion across 351 deals, ahead of 2024’s $8.4 billion through Q3.
- Only 30 Series B rounds were recorded through Q3 2025, as compared with an average of 60 per year over past years.
- 19 deals of $100 million+ closed in 2025, already surpassing 2024’s full-year count.
- Healthtech provider operations: $5.5 billion invested so far in 2025, on pace for ~$8.25 billion by year-end; nearly half of healthtech investment dollars allocated there.
- SVB emphasizes they still support companies even if not raising mega-rounds—focus remains on “next inflection point,” quality of management, moat, IP, etc.
- SVB’s description of services: banking clients in healthcare & life sciences include biotech, MedTech, health tech; providing both banking (operating accounts, payments, investments) and debt for manufacturing, working capital, etc.