Venture capital investment in radiology has grown substantially over the past two decades, according to research published December 15 in the Journal of the American College of Radiology.
A team led by Anirudh Bikmal from Emory University in Atlanta, GA, found that between 2000 and 2023, over 2,800 venture capital firms invested $11.4 billion in radiology companies. This included nearly 2,600 investments in 646 total radiology companies.
“This trend underscores the increasing role of private capital in shaping innovation within radiology,” Bikmal and colleagues wrote.
While previous studies have examined venture capital trends in various medical fields, the researchers pointed out that data regarding investment patterns in radiology are limited.
Bikmal and colleagues studied investment trends in radiology-focused companies from 2000 to 2023. They also identified key areas of innovation that attracted investors. Using the Pitchbook database, the researchers included venture capital investments in radiology companies between 2000 and 2023.
The team categorized companies into the following categories: medical devices, healthcare services, AI healthcare software, non-AI healthcare software, consumer goods, and biotechnology and drug discovery. It also assessed total capital investment, the number of funded companies, clinical trials, and international patent filings.
From 2000 to 2023, 2,851 firms made 2,584 investments in 646 radiology-focused companies. The $11.4 billion in total came from investments ranging from seed- to late-stage funding. This included an average investment and postinvestment valuation of $6.3 million and $51 million, respectively.
The total capital invested increased over time and peaked in 2021 at $2.2 billion. The team observed a similar trend when these figures were adjusted for inflation in 2023 dollars.
Medical devices and AI healthcare software made the most investment, at 28.1% and 22.2%, respectively. The next biggest categories included non-AI healthcare software (17.9%), healthcare services (13.5%), and biotechnology and drug discovery (18.2%). The team identified 267 clinical trials and 9,224 patents for these companies.
Spearman’s correlation between total capital investment and the number of documents ranged by category from 0.47 for biotechnology and drug discovery to 0.59 for medical devices. Across all categories together, this correlation between total capital investment and clinical trials was 0.49.
The results suggest that venture capital-backed innovation “will likely continue” to play a pivotal role in radiology by speeding up the adoption of emerging technologies and expanding market opportunities for startups, the study authors wrote.
“However, increasing venture capital funding in radiology may bring about ethical challenges with regard to safety, patient-centered product development, and appropriate implementation,” they concluded. “As the healthcare landscape continues to evolve, further research is needed to assess whether and how venture capital investments translate to improved patient outcomes.”
Read the full study here.