Venture capital funding for digital pathology tops $860M

2021 04 27 15 25 5437 Pathology Digital Workstation Microscope 400

Investment in companies developing digital pathology solutions has totaled more than $860 million since 2014. Despite the COVID-19 global pandemic, almost a quarter of the total funding ($207 million) has been raised so far in 2021.

Investment is now evolving to focus on startups developing artificial intelligence (AI) solutions for digital pathology image analysis.

Funding for digital pathology companies has reached over $860 million since 2014, with 73.4% raised since 2019. Investments have begun to increase in size as recent challenges faced by global healthcare providers have highlighted the need for pathology departments to digitize, with almost a quarter of the total funding ($207 million) coming early in 2021.

2021 04 27 16 29 4982 2021 04 27 Signify Small
2021 04 27 16 29 4982 2021 04 27 Signify Small Large

Image courtesy of Signify

While 68.8% of funding raised was dedicated to U.S.-based companies, investment is also beginning to scale in other international markets as companies mature and seek later-stage funding.

Compared to the beginning of the decade, there has been a notable shift in investment from hardware/software solutions toward AI-image analysis. The three largest unique vendor deals noted in the period are Paige ($125 million series C), PathAI ($60 million series B), and Volastra ($44 million seed).

It has also been noted that those companies seeking to focus and specialize in the preclinical market (like Volastra and Owkin) often receive larger funding amounts at an earlier stage, likely due to the higher potential return on investment (ROI) for vendors entitled to drug royalties and lower regulatory barriers for adoption.

Key findings can be summarized as follows:

  • While 2014-2017 reflected a relatively quiet period for investment in digital pathology, over the last three years there has been a significant uptick in funding. This is mostly for software vendors focusing on AI, reflecting a growing confidence in the market's potential.
  • Vendors targeting the preclinical market have experienced higher levels of funding at an earlier stage compared to clinical counterparts. This is likely due to the higher potential ROI for vendors entitled to drug royalties and lower regulatory barriers for adoption.
  • Relative to markets like medical imaging AI and AI in drug development, investment in digital pathology remains modest. AI's penetration of digital pathology remains low, in part due to regulation, a fragmented supply chain, and limited investment from healthcare providers in modernizing clinical labs so far.

This research relates directly to Signify's upcoming study "Digital Pathology -- World Market 2021." For more information, please contact [email protected].

The comments and observations expressed are those of the author and do not necessarily reflect the opinions of

Page 1 of 17
Next Page