Despite a decline in overall fundraising, which is on track for the lowest amount closed in more than a decade, AI-related deal activity remains a bright spot for the healthcare sector, according to the latest report from Silicon Valley Bank (SVB), a division of First Citizens Bank. Over the last three years, all healthcare sectors saw strong growth in AI deal activity while companies not leveraging AI saw a 20% decrease.
“Despite a challenging fundraising environment, we continue to see encouraging signals across the market, particularly in AI investment across all sectors,” Jackie Spencer, head of relationship management for life science and healthcare banking at Silicon Valley Bank and author of the annual Healthcare Investments and Exits Mid -Year Report, said. “Healthtech is leading the way, with AI-related deals doubling over the past 12 months. New AI applications are helping to reduce administrative burdens and drive greater efficiency throughout the healthcare system.”
Silicon Valley Bank’s mid-year 2025 Healthcare Investments and Exits report analyzes and predicts trends for venture capital investing, fundraising and exits across healthtech, biopharma, diagnostics/tools (dx/tools) and device sectors in the United States. The latest edition of the report also includes a spotlight on China.
China has established itself as a force in global biotech, with structural advantages in cost, development speed and regulatory efficiency, according to the report. In the first half of 2025, total spending on Chinese biopharma licensing deals reached $3 billion, already more than what was spent in 2024.
Key Findings
AI Spotlight:
- Healthtech stands out: Despite headwinds in the overall market, investors are still spending on healthtech which accounted for about a third of total healthcare investment, with Healthtech AI accounting for 21%.
- AI tools attract funding: Mid-way through the year, half of all dollars going to dx/tools companies are going to those that leverage AI.
- Admin tops clinical spend: Back-office applications are taking center stage as AI adoption is focused on reducing administrative burden rather than clinic tasks—accounting for 44% of all AI investment in the first half of 2025.
Investment by Sector:
- Biopharma: Late-stage companies show favor; median biopharma pre-money valuations among Series C+ sat at $247M in H1 2025, compared to $46M and $87M for Series A and B biopharma startups, respectively.
- Healthtech: Healthtech remains strong as the sector raised $8.2 B total dollars during this half, the strongest half since H1 2022. Series B deal size jumped to $40M, the highest over the past five years.
- Dx/Tools: There are silver linings in a slowing market for early-stage diagnostics and tools companies. While deal activity has slowed since 2024, Series A median pre-money valuations and deal sizes hit a five-year high at $38M and $14M.
- Medical Device: Device investment proves to be consistent, totaling between $3B and $4B every half since 2022. However, macroeconomic events could cause a veer off course as device companies appear likely to be most impacted by tariffs.
