A Rapid Decline – Has the Number of Life Science Start Ups Dropped in 2022?

One of the most talked-about topics in life science has been around the number of start ups that have come to market in the past decade, with numbers increasing on an annual basis. The same expectation was held at the start of 2022, with more start ups expected to be launched with all the excitement that accompanies it. However, what we got was something very different instead. 

The January Decline 

It is a well-known fact that January is a hugely popular month for launching new startups, especially because it chimes in well with the new year and important industry conferences that are being held. In addition to all the pomp of new start ups, we also expect to see a lot of financing being waved around as a mark of each start up’s success and in line with previous years.  

According to Crunchbase, the first half of 2021 saw 392 new start ups whereas 2022 offered just 85 – meaning that January 2022’s offerings pale into insignificance and a new trend of declining start ups seems to be more realistic.  

In addition, January 2022 life science start ups saw the lowest amount of financing in more than a decade, leaving many of us in the industry questioning what the future may look like as a financial crisis looms.  

The Opportunity for Large Companies 

One of the opportunities offered as a result of this decline is for larger life science companies to buy up small start ups that have promising ideas and provide them with the tech and support needed to turn them into viable market options that can help change the face of life science. 

This sounds great for large companies, but it does mean that many startups will be left facing difficult decisions around staying private and finding innovative ways to attract venture capitalists who aren’t ready to splash their cash just yet. The result of this change is a slower-to-market range of solutions that may help push innovation forward.  

It’s Not All Bad News 

Before everyone starts to panic that the life science industry is in decline, it’s important to look at the bigger picture. Over the past ten years, there have been thousands of new startups going public and getting lots of funding and support to create the solutions we need. Now there is a decline, but it doesn’t mean the industry has come to a standstill. 

Since January, there have been plenty of startups who have gone public, but the pace that we are used to has to slow down otherwise we will end up with a saturated market and even bigger staffing and financing problems than we are already facing. The good news for those startups that have already gone public is that there is now less competition for them to face as they progress their businesses. 

Time for Change 

Maybe now is the time for us to reevaluate the way we launch startup firms and the role that larger corporations have to play in bringing innovations to the forefront. One thing is certain, the new normal that life science is facing may have to incorporate a drop in startup options – only time will tell if it is a permanent decline or just a momentary blip!  

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