Biotech Venture Capital Firms
Posted: Mar 16, 2021 9:00 AM ET | Last Updated: Mar 16
Although venture capital deals were slightly down in 2020 as a result of the Covid-19 pandemic, the venture capital outlook for the biotech industry is expected to be strong in 2021. The pandemic has placed a greater importance on technological and medical innovation, with analysts projecting a strong year of biotech investment as developments and clinical trials resume. Venture Capital firms continue to search for innovative biotech companies including drug developers, digital health companies, medical device companies and other startups in the life sciences sector. Without access to public markets, biotech startups rely on Venture Capitalists for funding to cover costs for research and development, running clinical trials, manufacturing products and other operational expenses. As a biotechnology company looking for growth in the current landscape, it is critical to be aware of some of the top venture capital firms in the industry. Below is a list of some of the largest biotech investors.
ARCH Venture Partners
ARCH Venture Partners is one of the largest biotech investors globally. The firm is an early-stage venture investor focused on life science discoveries to prevent, detect and cure diseases. Based in Chicago, and offices in Seattle, San Francisco and Dublin, the company takes a long term and flexible approach to investing with investments ranging from $50,000 to $150 million. ARCH Venture Partners describes themselves as contrarian, bold, and imaginative risk takers who follow the science to found companies based on revolutionary technologies that can impact people’s lives.
Within the last year, ARCH Venture Partners has raised $3.31 billion through three funds dedicated to investing in the creation and funding of early-stage biotechnology companies. The firm made more than 25 deals in biotech in 2020, totaling more than $3 billion. Half of which were Series A projects, totaling more than $1 billion.
Founded in 1974, Sofinnova Investments is biopharmaceutical investment firm investing in late preclinical and clinical therapeutic companies across the United States and Europe. With over 45 years of experience in biotech investing, the Sofinnova has approximately $2.3 billion in assets under management and committed capital. The firm’s portfolio contains companies focused on therapeutic areas such as oncology, respiratory, dermatology, ophthalmology, neurology and women’s health. Their investments have led to 18 FDA approved drugs.
Sofinnova Ventures began as the U.S. affiliate of the Paris-based Sofinnova Partners, but the two firms split to become independent entities in 1997. For over 35 years, Sofinnova Partners has backed nearly 500 companies at different stages of development, working with entrepreneurs in technology, cleantech and the life science industry.
NEA is one of the largest VC firms globally with nearly $24 billion in assets under management. The firm is based in Washington D.C. and Menlo Park, California with additional offices in Baltimore, Bangalore, Beijing, Boston, Mumbai, New York City, San Francisco and Shanghai. NEA invests in companies in all stages ranging from seed stage through growth stage in the technology and healthcare sectors.
The firm’s active portfolio includes more than 500 growing businesses. Since its founding, NEA invested in nearly 1,000 companies, more than 230 of which have gone public and more than 390 were successfully merged or acquired.
Atlas Venture is an early-stage venture capital firm that invests in startup life sciences companies in the United States. Headquartered in Cambridge, Massachusetts, where the majority of its investments are located, Atlas Ventures has been supporting startups with capital for more than 20 years. Since 2017, the firm has raised $1 billion across three venture capital funds to advance new medicines for patients.
Atlas Venture is expected to continue its successful biotech investing in 2020 as the firm announced the closing of a highly oversubscribed fund raising $400 million for investment in startup life science and biotech companies. The firm also has an in-house incubator for startups during the early stages of development, providing workspace, capital, and opportunities for collaboration.
Located in San Francisco, California, Alta Partners is a venture capital investment firm that has funded over 130 companies in the healthcare and life sciences sector since being founded in 1996.Last month Alta Partners closed its NextGen Fund III, which was oversubscribed and has total capital of $275 million.
Their strategy is to continue investing in curative therapeutics and health-tech companies. With $2.3 billion raised across 10 funds, Alta has overseen 118 exits and 71 FDA approved drugs and products over 25 years.
Flagship Pioneering has developed a unique model called Pioneering, which combines scientific and technological innovation, systematic entrepreneurship, professional capital management, and a strong management team with a vast network of expertise. The firm ephasizes extensive industry collaboration with partners including AstraZeneca, Bayer CropScience, and Nestle Health Science.
After raising $1 billion in 2019 for growth stage investment in biotech, the firm raised an additional $1.1 billion in 2020 for investment in their Flagship Labs Unit. Flagship Pioneering has originated and fostered the development of over 100 science-based companies, resulting in an aggregate value of more than $30 billion. The company adds 6-8 new companies per year. They have had 24 IPOs since 2013 and more than 2,500 patents granted across the globe.
RA Capital Management
RA Capital Management is a multi-stage investment manager dedicated to investing in private and public companies in the healthcare and life science sectors who are focused on developing drugs, medical devices, and diagnostics. The firm provides seed funding to startups, as well as leads private, IPO, and follow-on financing for its portfolio companies.
In 2020, RA Capital Management raised $461 million, increasing the firm’s private deal capacity to over $1.3 billion and total assets under management to approximately $6.8 billion.
5AM Ventures is a venture capital firm focused on early-stage investing in next generation life science companies.The company strives to get into companies at the earliest possible stage, finding entrepreneurs and technologies that have significant potential. 5AM Ventures portfolio is diversified within the healthcare industry’s biopharmaceutical, drug delivery technology and research instrument sectors.
In 2019, 5AM Ventures closed two new venture capital funds focused on the biotech sector, totaling $497 million in commitments.
Founded in 1996, Polaris Partners is a multistage venture capital firm investing in technology and healthcare companies. Polaris is based in Boston , Massachusetts with an office in San Francisco, California. The firm has more than $4 billion in assets under management and has invested in more than 250 companies.
F-Prime Capital is a global venture capital firm spread across the United States, Europe, and Asia. The firm has more than $2 billion in assets under management and over 200 healthcare and technology companies in their portfolio. The company’s healthcare portfolio (formerly Fidelity Biosciences) makes multi-stage investments in companies focused on therapeutics, medtech, and health IT & services.
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