New trends in funding for biotechnology startups

New trends in funding for biotechnology startups
Photo: PublicDomainPictures, Pixabay

Biotechnology is an expansive and exciting field that has a lot of new startups coming in all the time to enter the market with their innovations. Recently, there has been a shifting trend in how these startups raise capital to fund their research and development.

While software startups get a great deal of their funding from areas in and around New York City, the greater Boston metro region is outranking NYC in the volume of money being given to biotech startups.

A notable example reported by Crunchbase News shows how immunotherapy startup AlloVir was able to raise $120 million in venture capital. This is much higher than the average amount raised by software startups, showing that biotechnology is certainly much more alluring to investors.

It is also indicative of the high cost of biotechnology work, with expenses such as lab testing, clinical trials and regulatory checks taking up a large chunk of capital. With the outcomes of lab experiments less predictable than with software, there’s a much greater risk/reward factor when it comes to biotechnology startups.

It’s clear that the sources of funding for biotech startups are starting to diversify as well as become more heavily invested in the fate of these ambitious upstarts. However, the incredible advances biotechnology offers in the form of medical, lifestyle and fitness products make it arguably the most lucrative startup industry to get involved in.