2024 Neurotech Funding Snapshot

🤑 $2.3 Billion Across 129 Deals: Analyzing a (historic) year of fundraising

2024 was a breakout year for commercial neurotech.

From January to December last year, I curated 2,000+ developments spanning fundraising, regulatory, commercial news, as well as industry, societal, and research topics, along with lots of other stuff in this Substack.

After some cleanup, enrichment, and analysis, I’m excited to share this original Neurotech Funding Snapshot of 129 deals from 2024.

Please use this to support your commercial strategy! Cite as follows: “Neurotech Futures’ 2024 Funding Snapshot. https://rb.gy/fic5so”

Full notes on methodology are at the end, with specific notes in each section. Before we dive in, here are three major caveats up front:

1. Category, target market, and even funding stage can be subjective, as many companies fit multiple genres. After much deliberation, I chose labels with a view towards simplicity, rather than granularity, of analysis.

2. This is not a “big list of startups.” Unless a company publicly announced a round last year, they will not be mentioned by name in this article. Why? Out of respect for those founders, investors, and commercial teams’ wishes for narrative control and timed release, a key part of fundraising and competitive strategy.

3. This is not a granular tally, but a representative snapshot of a bulk of last year’s deals. Case in Point: As soon as I got the final graphics for this piece back from my designer, I started finding deals I’d missed. D’oh! So: this analysis does not claim to be, nor should be considered, a comprehensive review of all funding activity in the sector.

Below is an overview and summary by deal stage, from large to small.

Insider Members will find additional charts and summary, along with full methodology notes after the paywall. These include breakdowns of Timeline, Category, Markets, Implanted vs Nonimplanted, Geography, and Broader Context.

🙏🏽 A special thanks to Rithika Kormath Anand for help with data preparation, to Amy Kruse for guidance and her team at Satori Neuro for assistance, and to the several executives who provided feedback and insights to shape this analysis.

2024: $2.3 Billion Across 129 Deals

First of all: What does this mean? Why is it important?

As we’ve seen in recent weeks, government funding for frontier R&D is changing. The financial capital required to start, build, and grow new ventures is one of the most crucial factors in commercial translation.

Translating cutting edge science and engineering applications into viable businesses remains a daunting prospect and bottleneck to innovation in many areas across medical device, digital health, and biotech markets.

Funding thus represents a key vital sign for the health of the field.

I hope these data a) help investors and LPs refine their thesis to help attract more capital to the field, b) provide founders and executive teams with additional context on positioning, timing, and competition, and c) help students and professionals navigate career transitions, i.e. finding companies or sectors that are better capitalized to hire new positions.

Now: What we learn about commercial neurotech markets by analyzing new capital entering the industry?

1. We’re on track to top $4b in 2025.

For context, in 2023 Pitchbook tracked $1.4 billion across 115 neurotech deals, an increase from $662.6 million across 127 deals in 2022.

While these numbers are not apples to apples, desperate times call for disparate data: A back of napkin analysis yields a CAGR of 88%, suggesting, conservatively, we may be on track to top $4b in funding in 2025.

See “Timeline” below for additional insight into how we’re tracking so far.

2. Big Rounds are “In.” So What?

Why are large rounds significant to an industry? One obvious and unspoken reason is the optics of attracting further investments. In general, large rounds indicate a healthy patience and willingness from investors to bet on long-term market strategies. It’s a signal, if a noisy one.

• Seven companies topped $100m in funding last year: Blackrock, Insightec, Mainstay, Precision, and Amber announced these in a single go, while Nalu, Openwater, and ONWARD reached it course of 2024.

• Six additional companies raised over $50m: SPR Therapeutics, Neuronetics, ShiraTronics, Omniscient, Cala Health, INBRAIN Neuroelectronics.

One note: large rounds with clearly indicated stages in the press release were labeled as such, but other later stage financing rounds were simply labeled “growth.” For mature companies older than five years, growth stage deals are more about the “when and why,” not just “how much.”

Here especially, size can be misleading. As HSBC wrote in their Annual Venture Healthcare Report from January, “Despite strong investment, neurology saw more flat and down rounds (eleven combined) than up rounds (five).”

Let’s take a quick look at some of these deals and what they mean.

For many reasons, Blackrock’s $200m was quite unique. For commercial stage companies like Insightec, Nalu, Mainstay, Cala, Omniscient, and Neuronetics, their deals will support growth of existing lines of business.

• Mainstay’s round will support primary market expansion of Reactiv8 as a chronic lower back pain treatment. SPR’s part-debt, part-equity round will “capitalize on commercial momentum, customer demand, and market opportunity to expand SPR sales representation in additional U.S. sales territories.”

• Nalu’s multi-part Series E will target growth in PNS and disruption into a secondary market in SCS. Insightec has made name in high intensity focused ultrasound for Essential Tremor and Parkinson’s, but their life sciences business also holds tremendous upside.

• Neuronetics needed a loan for an acquisition. Cala and Omniscient both have growth plans in existing markets, though the latter’s $66 Series C will fund product development, too.

Pre-commercial investments in Shiratronics, InBrain, Precision, and Amber will primarily a finance path to market through the FDA.

• Precision’s $102m Series C led other pivotal rounds supporting in-human work and regulatory clearance. INBRAIN’s $50m Series B will go to commercializing the world’s first graphene BCI.

• Shiratronics’ $66m Series B will fund their pivotal study. Theirs is a “typical” timeline: Spun out in 2019 with a $33m Series A, FDA Breakthrough in 2021, $3m in 2020, new CEO in 2022, $5m in 2023.

• Amber’s nine-figure series A is unique, as the company leveraged an existing device to keep early costs low en route to developing de novo surgical procedures for an indication a large, underserved population.

• Openwater’s vision for market entry remains unclear to me (I welcome your insights), but with a category creating device, my guess is their funding will support commercial entry and related operations thereto.

3. Early Stage: 27 Series A Deals

On the other side of fundraising are early stage deals to help companies establish their business operation, supporting pre-commercial foundations as well as R&D and product development.

Traditionally a Series A is an “establishing” round to plant a flag and signal a company is officially in building mode on the path to commercialization. Let’s take a look:

• $400m in total Series A rounds, across 27 deals. Excluding Amber Therapeutics’ $100m the average size of a raise was $12m.

• $303m went to 7 implanted technology companies — an average of $17m per deal (again, minus Amber). 2 brain, 3 peripheral nerve, 2 spinal cord.

• $189m went to 20 non-implanted approaches - an average $9.45m per deal. Top categories included 5 companies in cognitive assessment, 3 digital health, 3 EEG, 2 EMG, 2 photobiomodulation.

• Top Markets: 5 in Alzheimer’s Disease, 4 in Depression, 3 in Pain, and 2 in Stroke, Parkinson’s, Brain Injury, and Consumer.

• 63% of Series A-funded companies are US-based, with 7 based in the EU/UK, 1 Israel, 1 SE Asia, 1 in Canada (note that HQ is a flexible category today, as many companies maintain multiple offices worldwide. Additional geographic breakdowns across all stages is below the paywall)

4. Earliest Stage: Seeds Versus Weeds

One exciting part of an analyst’s job is watching dozens of promising companies win the chance to take root and grow across categories. Some of these startups may become huge! But, most will not.

• 63 seed deals reflect $132m of investments, almost $2.1m on average.

• This includes $27m for PNS & SCS, $21m for ultrasound, $22m for EEG, $19m for “Other” (AR, VR, Prosthetics, EMG) and $12m for AI, as well as $9m for BCI, $7m for cognitive assessment, $6m for tDCS, and $5m for digital health tools.

• Data caveat: This includes deals labeled seed, pre-seed, some grants, and various partial deals that didn’t have a better category (See Methodology). Zooming out, this likely represents the tip of the iceberg; optimistically I guesstimate it accounts for ~half of all seed investments made last year.

With too many deals for an exhaustive analysis, here is a quick double-click to illustrate the diversity of technology, applications, markets:

Seed-stage BCI investments include Augmental ($4m) and MintNeuro (£1m). Of the 15 PNS seed checks, 5 were for implanted devices, e.g. SensArs and Juniper Biomedical, while 8 were non-implanted (e.g. Aurenar, Roga, Leesol).

NINA Medical is an emerging high-intensity focused ultrasound (HIFU) company, Myelin-H has neurotech for M.S. StrokeDx is changing stroke diagnosis. Piramidal is an AI startup bringing YC-backed foundation models to epilepsy. Samphire and Morari are targeting gender-based indications with wearable stimulation in different places.

5. Other Funding: The Force Is Strong

What’s not entirely represented above: key acquisitions or IPO’s (see Broader Context, below), as well as an additional $1B+ of investments committed last year by public funds, mission-based funds, strategic philanthropy, grants from nonprofit foundations, and a dozen new accelerators, incubators, and similar programs around the world.

Some of these new funds awarded money to startups, which are included in the above dataset on a case-by-case basis. However, most of the public grants that crossed my radar were omitted. I only tracked 25 grants totaling $37m awarded to startups (not research labs) for purposes of product development or commercialization.

This doesn’t include numerous, major multi-year, multi-million public funding awards to large med techs and prominent neurotech startups, nor the millions in funding to research centers to purchase startup equipment. At some point, I would like to wrangle data from several public sources I’ve identified to publish a more robust analysis. Email me if you’d like to help!

Now, let’s dive into more charts and analysis. We’ll look at Timeline, Category, Implanted/Non-implanted, Geography, and Broader Context.