Healthcare companies saw slightly fewer dollars last year, after a record-breaking 2018. Companies in the U.S. and Europe raised a total of $32.49 billion last year, largely driven increased investments into healthcare technology, according to a report released Thursday by Silicon Valley Bank.

That amount was just shy of the $33.17 billion companies raised in 2018, but still substantially higher than 2017. Companies also saw more deals overall, with a total of 1,414 deals reported in 2019, up from 1,222 in 2018.

Biopharma companies still accounted for the largest piece of the pie, raising $15.6 billion last year, followed by the fast-growing health tech sector, which raised $7.5 billion. Medical device investments also grew year-over-year, raising $4.9 billion, while funding for diagnostics tools fell sharply to $4.4 billion.

Source: Silicon Valley Bank, Healthcare Investments and Exits Annual Report

Healthcare technology companies, which include insurance startups such as Clover Health and precision medicine startups such as Tempus, raised a total of $8.8 billion last year. That’s up 13 percent from 2018, and even more impressive, nearly double the amount raised in 2017.

Investors took a particular interest in provider operations startups,  such as Chicago-based primary care startup VillageMD, which raised $175 million, and London-based telehealth company Babylon Health, which raised a whopping $550 million.

Mental health startups also gained traction last year, including Boston-based Pear Therapeutics, which raised $64 million for its software used to treat substance use disorders.

The sector also saw several big exits last year, mostly through mergers and acquisitions. Digital health startup Propeller Health, which makes software to manage asthma and COPD, was acquired by ResMed for $225 million.

2019 also brought several long-awaited IPOs from health tech companies. Silicon Valley Bank recorded a total of eight, including diabetes management startup Livongo, fertility benefits company Progyny, and health IT company Change Healthcare.

So far, the eight companies have been performing well, collectively up 17 percent on average from the original offering price. Progyny performed the best of the group, with its stock now valued at $32, up from its initial IPO price of $13 per share.

Going into 2020, Silicon Valley Bank predicts that investments into healthcare technology companies will only continue to grow.

“We expect that 2019’s successful public offerings will pave the way for more healthtech IPOs, specifically in the alternative care space,” the report noted.

On the whole, Silicon Valley Bank expects to see funding slow in most other healthcare sectors after 2018’s frenzied deal-making. Researchers are predicting biopharma investment will decrease by 10 to 15 percent, as well as a slight decline in medical device investments.

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