Venture Funding of Biotech is VERY Concentrated… and Very Limited

Fierce Biotech has released their latest analysis of venture capital funding of biotech in the U.S. last year, broken down by metropolitan area:


San Francisco is back out in front, edging out Boston-Cambridge.  After San Diego and Washington, funding tails off rapidly, and by the time you hit #15 Chicago, you’re down to about 1% of the pie.

There are a couple of key takeaways.  First, biotech startup funding is very concentrated, with the big three cities (San Francisco, Boston-Cambridge, and San Diego) totaling more than 60% of all funding ($2.5B).  That number, incidentally, is 25% more than the total of all biotech VC funding in Europe.

Second interesting point: there really isn’t that much VC funding of biotech!  The total is only about $4.5B in the U.S., something just under $2B in Europe, and a smattering elsewhere.  In other words, the level of annual global VC biotech funding is smaller than the R&D budget of just one large pharma company.  Keep that in mind when you hear multiple pharma companies planning on sourcing a large part of their pipeline from licensing and acquisitions.

Finally, recognize that distribution?  Yup, Pareto.  Apparently biotech hub performance is just like employee performance.

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