The State of Seed-Stage Investments in Pediatric-Focused Companies

by Juliana Perl

Coauthors: Elisabet Rosas, Kunj Sheth, Janene Fuerch, James Wall

Health Inequities

It is understood across the innovation ecosystem that venture capitalists are less likely to fund pediatric health technology companies compared to adult health technology. However, the actual degree of investment has not been objectively analyzed. This study aimed to quantify the current state of seed funding for pediatric health technology companies which address conditions impacting patients under 21 years old.

PitchBook data was filtered for US-based health technology companies receiving seed funding for the 3 years between October 2019 – September 2022. Health technology was defined to include devices, diagnostics, and digital technology, and exclude pharmaceuticals, drug discovery/biotech platforms, wellness products, and medical supplies (i.e. protective equipment). Public information on each company was then reviewed to categorize companies based on patient populations of pediatric-only, pediatric-and-adult, or adult-only.

327 companies received a total of $943.2M in seed investment in the 3-year period. Of these, 19 (5.8%) addressed pediatric populations and received a total of $78.5M (8.3%) in seed funding. In a deeper look at those 19 companies, 14 (73.7%) addressed a pediatric-and-adult market and received $72.8M (92.8%) of the total seed funding, leaving 5 companies (26.3%) addressing pediatric-only needs with $5.7M (7.2%) in seed funding. One lone pediatric-and-adult company (Sibel Health) accounts for $33 million of the seed funding data.

This data demonstrates a lack of investor interest in pediatric health technology. The 5 Pediatric Device Consortia, sponsored by the FDA, work with hundreds of entrepreneurs addressing pediatric conditions each year. This implies that the lack of pediatric device investment is not a pipeline issue, but rather a demonstration of both perceived and actual business incentives that are misaligned with the advancement of health for the world’s youth.