New Animal Pharm database suggests scope of animal health funding is widening
Venture capitalists have broadened their horizons within the animal health sector in recent years, with funding spreading to new segments.
In 2017, several animal nutrition companies have secured early-stage investment. This is in contrast to three or four years ago, when investment was largely directed to developers of drugs for companion animals.
To track early-stage investment in the animal health market, Animal Pharm has launched a Funding Database. This tool features all of the early-stage deals covered by Animal Pharm since 2009. It highlights angel, seed and series A-D rounds, as well as initial public offerings (IPOs) from around the world. Subscribers can use the database to search for investments by country and product focus, as well as the investors behind each deal.
The database highlights the funding handed out from 2009 to 2015 for specialists in companion animal treatments such as Aratana Therapeutics, Putney, Kindred Biosciences, Nexvet Biopharma, Piedmont Pharmaceuticals and VetDC.
This initial surge of interest from the investor community led to several IPOs. However, the market for IPOs has died down in recent years. This led small businesses to look for early-stage investment from alternative sources.
Investment in the animal health arena has since spread to a wider range of targets. Veterinary vaccines, animal nutrition and data technology have become more popular destinations for venture funds.
This year, Animal Pharm has already tracked more early-stage funding deals than any other year. Of the 25 deals covered, nine were linked to food animal nutrition or feed.
Nevertheless, companion animal therapy specialists are still popular investment targets with Zomedica Pharmaceuticals, Elias Animal Health and Piedmont Pharmaceuticals all pocketing funding this year.
Number of deals in early-stage animal health investment 2016-2017
While these positive trends will be a boost for young animal health businesses, funding is still a difficult prospect. Investors are still cautious when it comes to prospects in the animal health sector.
Location of early-stage animal health investment deals 2016-2017
Animal health investment warming up
Notably, the new Animal Pharm database features some companies that received funding and then were acquired. These include Nexvet Biopharma, Putney and Silent Herdsman.
These exit strategies may be the proof to venture capital firms that animal health companies are a sound investment.
Matthias Hofer, a partner at Stonehaven Consulting, told Animal Pharm: "Looking at recent exits in animal health, it appears those have been good investments. As a specialized consulting company, we are getting more and more involved with promising start-up companies in animal health. We are excited to see what seems to be a new biotech era in animal health; similar to what has happened to human health in the past."
Recently, Animal Pharm spoke to consultant Dr Sam Al-Murrani echoed these sentiments by pointing out a widening sphere of investment opportunities in animal health. However, he also noted the lack of funding opportunities available to young animal heath businesses.
He said: "Lots of investors don't know much about animal health. I get calls on a weekly basis from investors who have no clue. But it's a fairly complicated market. There is no cost reimbursement for pets and a limited, although growing pet insurance market. Only about 40-50% of pets go to the vet regularly. There are many things happening at the same time in this market – it's very nuanced. But you can make money in animal health; you just need to know what you're getting into."
Animal health would benefit from more funds solely focused on fuelling start-ups in the veterinary medicines sector.