Cleveland healthcare companies attracted almost $200 million in new equity investments in 2016, continuing a strong local trend of ideas translating into investment dollars, say authors of an annual industry study covering the Midwest.
Forty-six Northeast Ohio companies raised $198 million last year, according to the BioEnterprise
Midwest Healthcare Growth Capital Report. The figure put Cleveland fourth in regional venture investment, just behind Minneapolis ($422 million), Chicago ($323 million) and St. Louis ($241 million). Ohio also ranked third among Midwestern states in drawing $291 million in healthcare investment funding, trailing only Minnesota ($424 million) and Illinois ($327 million).
“We are encouraged that Cleveland, again, ranks near the top of Midwest regions in number of companies and investment attracted,” says BioEnterprise president and CEO Aram Nerpouni, whose local nonprofit is tasked with assisting biomedical startups.
Medical device companies led the charge with $89 million raised, followed by $58 million garnered by local biotech and pharmaceutical firms. Matching a national trend, funding in Cleveland's health IT and services sector more than doubled, from $20 million to $50 million.
Drug development company BioMotiv
raised $37.5 million in 2016, representing the region's largest deal. OnShift
, a developer of software for post-acute care and senior living, had the next largest deal at $18 million. ViewRay
, makers of a clinical MRI-guided radiation therapy system, raised $13.75 million.
Since 2012, Northeast Ohio's healthcare sector has acquired an average of $200 million in private investment capital, a trend that Nerpouni says is emblematic of the area's strides in the industry.
"A decade ago we were getting $30 million a year," says Nerpouni. "The consistency we're seeing now is exciting."
The region has also had more than 60 exits since 2002, meaning global entities are consistently grabbing up area companies, although many of these businesses are staying in the region after being acquired. Nerpouni cites Explorys
, a healthcare data analytics company and division of IBM Corp. now building its headquarters near Cleveland Clinic.
Nerpouni expects local healthcare funding to break $200 million in 2017 as Cleveland's biomedical industry continues to find its legs.
"Look at the talent we have moving into Northeast Ohio," says Nerpouni. "The rest of the country is catching up to the fact that if you're a biomedical company, this one of the places to grow."