Q1 2025 Medical Device Investment Roundup: A Record-Breaking Start to a Year of Reckoning

Big deals, even bigger questions. Jonathan Norris of HSBC Innovation Banking explains why 2025 is already one for the books.

Venture investment across the medical device sector kicked off 2025 with a bang, posting $2.6 billion in first-quarter funding across 132 deals—the highest quarterly dollar mark in three years. According to Jonathan Norris, Managing Director at HSBC Innovation Banking, who writes comprehensive reports on the venture healthcare ecosystem, this surge marks a 20% rise in both capital and deal count compared to the 2024 average.

“Not only did we have more dollars, but there were more deals, which is really good to see,” Norris says, in a recent interview with The Lens. “I think the quick and easy takeaway is that more companies were getting funded in Q1, and a good percentage of the bigger deals in the quarter were PMA pivotal trial rounds. It looks like positive momentum for the sector to see a big quarter. That’s our 35,000-foot view.”

But beneath the celebratory surface lies a market under tension, and one that is bracing for impact with headwinds including controversial federal policies and regulatory changes, and a closed IPO window. However, despite this dynamic environment, resilient medtech companies are being funded and continue to develop life-saving technologies, and selective, strategic investors have funds available to invest in the most compelling device opportunities.

Here, we break down the Q1 medical device venture investment picture, including overall volume, the top venture deals of $50 million or more, and first financings, in what’s sure to be a year of reckoning in medtech.

Q1 Medical Device Venture Investment: Large Rounds Dominate

From January to March of this year, while overall investment volume surged, in Norris’ view, the structure of the deals reflects an ongoing trend: bigger rounds, bigger syndicates, and shared risk.

During the quarter, 16 venture deals of $50 million or more accounted for $1.3 billion in funding—half of the quarter’s total (see pie chart). But no single deal dwarfed the field. The largest, at $142 million (organ tissue preservation company OrganOx), announced in February, was notable but not outsized compared to biotech, where deals north of $300 million aren’t uncommon.

“The top 10% of deals taking 50% of the dollars is a trend we had been seeing in 2024. I don’t think it’s necessarily new, but it’s a continuation of the bigger deals taking the majority of the capital that’s out here. It signals a continued investor strategy of caution,” Norris explains.

Investors are continuing to opt for a “safety in numbers” approach, building multiple syndicates with enough dry powder to weather potentially turbulent next rounds, notes Norris. If no new investor is found, the strategy is that a company could have enough capital from its pool of existing investors to stay afloat with an inside round if needed.

Big Bucks for Cardiovascular
and Non-Invasive Monitoring

In terms of overall Q1 device venture investments by indication, there were two segments that were either way ahead of pace or ahead of pace versus 2024 investment, according to Norris. Way ahead of pace is cardiovascular, with $500 million already invested in 16 deals. In all of 2024, 25 cardiovascular device deals secured funding totaling $542 million.

“Cardiovascular medical device investment in Q1 hit almost the entire dollar amount that was invested in the sector in all of 2024. I think that’s very interesting, and inherently makes sense, as the cardiovascular space had the most private M&A activity in 2024 and is a consistent source of strategic interest,” says Norris.

And this strategic interest is reflected in the capital being raised. Among the many deals that the LSI team tracks in Compass, LSI’s proprietary market intelligence solution for competitive intelligence, deal-flow analysis, and opportunity assessment, nearly every single one can find a corollary with recent M&A activity in the cardiovascular devices market. Put simply, people are doubling down on the bets that companies like Boston Scientific, Edwards Lifesciences, and Johnson & Johnson are making.

For good reason too. These are device markets, within the greater $62.5B cardiovascular devices market, that are seeing growth at between 2x to 6x the compound annual growth of the worldwide market for cardiovascular devices. For example, according to recent forecasts from LSI, pulsed field ablation (PFA), transcatheter mitral valves, and left ventricular assist devices (LVADs) are projected to increase at a CAGR of 32.8%, 22.0%, and 10.9%, respectively.

Non-invasive monitoring (NIM) is another segment that stood out in Q1, according to Norris, with $419 million in 18 deals. For all of 2024, 54 NIM deals totaled approximately $1 billion.

Once again, the investment is sound. As far as risks go, these devices typically have a lower risk classification, facing reduced clinical and regulatory barriers. This means that these products can validate commercial viability far more quickly than complex medical devices. In today’s M&A market, an established commercial model is often a prerequisite. 

Furthermore, the NIM market continues to be one seeing rapid growth. According to LSI’s Compass, the market for remote diagnostic and monitoring solutions will nearly double in the next five years, as the market grows at a CAGR of 11.4% from $26.2 billion to $45.7 billion. 

With regard to total device venture investment by month, Norris notes that there was a fairly even distribution. In January, deals totaled $913 million, then a small dip to $790 million in February, but then the total popped back to $882 million in March (see figure showing Q1 versus 2024 numbers). So fairly stable month-to-month activity—which wasn’t the case for early-stage deals, as Norris explains below.

$50-Million-Plus Deals
by Indication

Singling out the largest, most compelling deals in Q1—the 16 investments totaling $50 million or more by indication—a handful were cardiovascular, according to Norris. These include 4C Medical Technologies ($175 million), Supira Medical ($120 million), VitalConnect ($100 million debt and equity financing), Alleviant Medical ($90 million), and Cardiac Dimensions ($53 million).

In non-invasive monitoring (NIM), FIRE1 ($120 million) and VitalConnect ($100 million) were among the $50 million-plus deals announced in the first quarter.

On the neuro side, there were also several bigger deals in Q1, including MicroTransponder ($65 million; detailed below), Saluda Medical ($100 million), and Cala Health ($50 million). Norris notes that although Cala announced the initial closing of their financing in December 2024, the company upsized it a bit in 2025, so he is counting it in 2025. 

Top Venture Deals: Commercial vs. Clinical-Stage, with PMAs for the Win

Looking at the 16 $50 million-plus deals in Q1 by company stage, Norris notes that it was an even split between commercial and clinical.

“This is a shift from what we saw in 2024, where eight of the top 10 raises were for companies already on the market,” says Norris. 

Norris also notes that many of the big deals this past quarter are pre-commercial, PMA-stage (and thus becoming prime M&A target) companies. The biggest med device deals in Q1 included:

• 6 commercial 510(k) companies
• 2 commercial PMA companies
• 6 PMA companies raising money for pivotal trials
• 2 PMA companies raising money for feasibility trials

“So far this year we are seeing companies successfully raise pivotal trial rounds, which is very important,” explains Norris. “We see the opportunity for these PMA deals to get to a potential acquisition before they get approved. Typically, we see the exit zone present itself after they finish a pivotal trial. That’s where the big guys typically come in and say, we like this company, we like the market. Let’s just pick it up now, we’ll take it from there and handle the commercialization. It’s good to see venture investors taking those bets, and provides near-term validation for early-stage PMA companies that funding will be available to fund pivotal trials.” 

Norris explains that of the 16 biggest deals, eight had valuation information around them. Seven of the eight were either up or flat rounds, and one was down, Norris notes. 

“We’re seeing larger rounds for companies that are doing very well in the eyes of new investors. An up-round means that new investors are ascribing value to what the company has done in their last round of fundraising,” says Norris. “Larger rounds are going to companies that investors see real value in—those companies have hit important milestones.”

Big-Deal Syndicate Investments in Q1

On the investor side, three large venture firms—Gilde Healthcare, Longitude Capital, and Ally Bridge Group—took part in several $50-million-plus medical device syndicate deals this past quarter. Here we’ll detail a sampling of these multiple-investor deals, interestingly with several being cardiovascular deals (see next page for link to a compelling cardio investment panel from LSI USA ‘25).

In January, Gilde Healthcare participated as an existing investor and Longitude Capital as a new investor in Dublin, Ireland-based heart failure device solutions company FIRE1’s $120 million financing round. The deal was led by new investors Polaris Partners and Elevage Medical Technologies, joined by another new investor Sands Capital, and additional existing investors Andera Partners, Gimv, the Ireland Strategic Investment Fund, Lightstone Ventures, Medtronic, NEA (New Enterprise Associates), Novo Holdings, and Seventure Partners.

Also in January, Gilde led a $90 million financing in Alleviant Medical, a privately held company developing a no-implant atrial shunt for heart failure, to fund its second pivotal trial. The round also added Omega Funds and includes participation from existing shareholders S3 Ventures, RiverVest Venture Partners, Vensana Capital, Longview Ventures, Gilmartin Capital, TMC Venture Fund, and undisclosed strategic investors. 

In February, ambulatory cardiac monitoring company VitalConnect closed $100 million in financing through a combination of equity and debt capital. Equity financing was led by new investor Ally Bridge Group, with significant participation from existing investors including EW Healthcare Partners, MVM, and Revelation Partners, while Trinity Capital provided the debt financing.

In March, Gilde and Longitude participated as new investors in a $65 million Series F financing round for commercial-stage implantable vagus nerve stimulation company MicroTransponder, along with existing investors US Venture Partners, Osage University Partners, Action Potential Venture Capital, GPG Ventures, The Vertical Group, and Exceller Hunt Ventures.

Also in March, Cardiac Dimensions, developer of minimally invasive treatment modalities to address heart failure and associated cardiovascular conditions, closed an oversubscribed $53 million Series E financing round led by Ally Bridge Group. New investor Claret Capital Partners and existing investors Hostplus, M.H. Carnegie, Horizon 3 Healthcare, Lumira Ventures, and a confidential strategic investor also significantly participated in the round.

First Financings:
A Promising but Precarious Rise

Along with overall Q1 device venture investments, first financings—defined by HSBC as seed and Series A venture rounds totaling at least $2 million—also surged in the quarter. In medical devices, 25 deals were reported, totaling $289 million.

“While the total sounds small compared to overall, it was the second biggest quarter for early stage in the last four years,” says Norris. “Q2 of last year was a big quarter, coming in at $511 million. That was the biggest quarter we had ever really seen in early-stage device. But Q1 2025’s $289 million is close to double any other quarter in 2024, which ran at about $150 million a quarter. So this is a really strong early-stage number.”

In terms of deal size, there were no first-financing deals over $50 million, but there were four deals exceeding $20 million, and then another five deals that raised between $10 and $20 million, according to Norris. “Those are good-sized early-stage rounds for the device sector, and will typically give companies some room to hit important value inflection milestones,” he says. 

However, in terms of the investors that stepped up to the plate for first financings in the quarter, Norris says the typical, traditional players stayed on the bench. 

“I noted one deal each from OrbiMed, the Mayo Clinic, ShangBay Capital, and Catalyst Health Ventures. But most of the other folks that are typical major players in early-stage device were quiet in Q1.”

Norris says that this relative radio silence begs the question: why would investors want to invest in Series A medical device companies right now?

“There’s uncertainty in the market at the moment around not only what’s going on within the FDA, NIH, and the financial markets, but also about the ability to find a new Series B investor. And that’s been a longstanding concern in the med device arena,” he explains. “Typically, when a company gets to Series B, it hasn’t taken substantial technology risk off the table, and doesn’t have a substantial amount of patient data. While companies have made progress, new investors often do not see enough progress to enable a strong step-up in valuation.”

What Norris is seeing is a bit of a push and pull in the market. 

“It’s a great opportunity for investors to come in and do a Series A in terms of finding great companies and actually negotiating favorable valuations. But a lot of these investors are just not willing to do it right now because it is so difficult to find new Series B investors,” he says. “Many typical early-stage players have pulled back Series A activity, in favor of later-stage deals with more technology risk off the table and closer to exit.” 

Looking at first financings by indication, in 2024, cardiovascular didn’t get much investment. But in Q1 of this year, four cardiovascular deals came in for a total of $60 million, notes Norris.

The story becomes a bit more telling when examining the monthly totals. January and February appeared stable, with $150 million invested in January and $113 million in February. This compares to $144 million in Q124, an impressive $511 million in Q2, $152 million in Q3, and $164 million in Q424. 

But then came March of this year, when funding plunged to just $26 million.

“Early-stage medical device funding dropped off a cliff in March. But because these numbers are not really big, and one month does not constitute a trend, I offer caution about concerns with how light the month was. It will be very interesting to see where dollars go over the next few months,” says Norris.

2025 as a
Year of Reckoning

While Q1’s numbers paint an overall positive picture, the undercurrents, as noted with first financings, are anything but stable. Medical device venture investors are selective, cautious, and protective—and startups must go above and beyond to prove not just their technology, but their long-term viability in a market where fear of the next round is driving every decision.

As Norris predicted in his 2024 year-end outlook, 2025 is going to be a “rubber hitting the road moment” for a lot of companies that were on insider rounds that might not be able to find a new investor. (See “Look What You Made Me Do: Novel Tech Deals Dominate Device Venture Investment in ‘24, Set Stage for a Brisk ‘25,” The Lens, January 2025.)

“It’s also a function of the fact that we had such a buoyant 2020 and 2021, with a lot of companies launched during that period of time,” he says. “Many companies that scraped by on insider rounds over the past two years now face a brutal reality. Find a new investor or fold. With limited support left in existing funds, consolidations and asset sales could rise in some segments.”

As seen in the Q1 numbers, investors are showing that they are cautious, but as always, opportunistic. The best deals are happening, but only for those who can prove they’re ready.

“The best investments are made when the market is down,” says Norris. “But when you don’t know where the floor is, it’s hard to commit. It’s a market watching itself, unsure whether to speed up or slow down. Keep in mind that the device sector has always been resilient, and it will be able to navigate this down cycle,” Norris concludes. 

JONATHAN NORRIS

Managing Director, HSBC Innovation 

Jonathan Norris joined HSBC’s Innovation Banking Division in April 2023 from SVB, where he was a Managing Director for 17 years. At HSBC, he manages healthcare venture relationships and works with investors and companies on commercial banking and debt products. In addition, for more than a decade, Norris has written comprehensive reports on the venture healthcare ecosystem, covering venture fundraising, investment, valuations, and exits. These reports have been widely cited in the ecosystem, and he often speaks at major investor and industry conferences. He has more than 20 years of healthcare banking experience. Norris earned a B.S. in business administration from the University of California, Riverside, and a J.D. from Santa Clara University. 

You can reach Norris at Jonathan.Norris@us.hsbc.com. View his 2024 Annual Venture Healthcare Report at www.hsbcinnovationbanking.com/us/en/business-stage/hsbc-healthcare-reports, and stay tuned for his first-half 2025 venture healthcare report in July.

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