- Aug 01, 2022
Venture capital is the lifeblood of breakthrough medical technologies. With the unprecedented growth in the global Biopharma and MedTech industries, new start-ups with novel ideas are emerging.
In 2022, over $14 billion was funded in Biopharma setup globally, and 37 major IPOs of VC-backed Biotech businesses raised a combined $4.2 billion. As per Forbes, Biopharma mergers generated a further $37 billion.
However, as the COVID Biotechnology boom ends, it is becoming more challenging for entrepreneurs to get venture money.
Amidst rising interest rates and the looming threat of recession, the once-hot IPO market has come to a grinding halt. Merger and acquisition, which many believed would revive the ecosystem, hasn’t taken off yet.
Which Parties Are Investing?
The ecosystem of Biotech ventures peaked in 2021. Many investors contributed their efforts in early-stage Biotech to find the next Moderna. However, the situation has tremendously changed since the market crash began in November 2021.
The overall investment in Biotech firms has grown significantly. The rise in transaction volume may be attributed to the increase in transaction sizes as the top firms receive extensive working capital.
The Venture Capitals
1. Kleiner Perkins
CEO: John Doerr (chairman), Brook Byers (founder).
Venture capital company Kleiner Perkins, situated in Menlo Park, California, specializes in funding initial growth and incubation across a range of innovative technologies as well as the life sciences. This firm is especially renowned in the Biotech sector for tech advancements and digital health.
2. New Enterprise Associates
CEO: Luke Goh
Technology and healthcare are two areas in which California-based New Enterprise Associates, Inc invests. This venture capital firm was founded in 1977 with only $16 million in funding. The firm’s website states that it now has $20 billion in pledged money spread across 16 funds, making it one of the world’s most prominent venture capital organizations. Being bicoastal, the company primarily invests in the US eastern seaboard but has an international presence.
3. OrbiMed Healthcare Fund Management
CEO: Samuel Isaly
The New York-based OrbiMed Healthcare Fund Management has made various investments in the life sciences sector, including MedTech and Biopharma. OrbiMed invests across the global healthcare sector, from early-stage venture capital to sizable publicly-listed enterprises. Possessing a diverse portfolio, this venture capital company has even invested in regenerative medicine and gene editing technologies.
4. Interwest Partners
CEO: Keval Desai
California-based Interwest Partners focuses on healthcare and IT. Along with conventional medicinal biopharma, the firm’s portfolio also includes a variety of technologies and online health start-ups. InterWest spends an aggregate of $7 to $15 million on each portfolio business during their engagement, covering the whole spectrum of venture investment phases. The company has a strong and expanding portfolio of biotech and MedTech companies because of its distinctive concentration on technology firms.
5. Canaan Partners
CEO: Eric Young
The early-stage venture financing firm, Canaan Partners, focuses on game-changing innovations in information, digital technologies, and medical sciences. Over the last 31 years, the firm has managed a highly diversified $5 billion fund that comprises some of the top names in technology and life sciences. Fintec, frontier technology, Biotech companies, digital health, and MedTech are all included in Canaan Partners’ portfolio.
6. Alta Partners
CEO: Andrew Sheiner
Since 1996, Alta Partners, a renowned life science venture capital firm, has invested in over 130 businesses. The team’s diversity and integration offer in-depth expertise that produces tangible outcomes for its businesses and investors. To date, over 70 of the company’s life science products have received FDA approval.
7. Versant Ventures
CEO: Jerel Davis
In 1999, Versant Ventures, Inc., a Menlo Park, California-based venture capital company, was founded. According to its website, the business has 36 IPOS and $3.2 billion under control. The firm primarily works in the Biopharma industry and has a remarkable in-house scientific breakthrough research facility called Versant’s Discovery Engines.
8. Flagship Pioneering
CEO: Noubar Afeyan
Flagship Pioneering offers a distinctive business strategy that conceives, develops, finances, and expands first-in-category ventures to revolutionize sustainability and human health. The company focuses on first-in-class goods and cutting-edge, disruptive technologies. It has a variety of technologies spanning Biopharma, engineering, food, and other areas.
9. Domain Associates
CEO: Dennis Podlesak
Domain Associates was one of the first investment firms to primarily focus its holdings in the Biosciences industry in 1985. This venture capital firm is one of the top investors in the life sciences, with a track record of more than 260 firms and a total capital of $2.8 billion+. Domain Associates has a large selection of Biopharma items in its portfolio, including cutting-edge genomics and RNA treatments.
10. Novo Ventures
CEO: Kasim Kutay
In 1999, Novo Nordisk and Novozymes partnered to form Novo Ventures (Nova A/S), a Danish private limited venture capital firm headquartered in Hellerup, Denmark. It is owned entirely by the Novo Nordisk Foundation, the holdings limited of the Novo Group. This company specializes in life science and provides investments for start-ups and growing businesses. It is a part of the more prominent Novo Holding company, whose investments are more varied.
11. New Leaf Venture Partners
CEO: Ronald Hunt
New Leaf Venture Partners (NLVP) invested in Biopharmaceuticals during its growth and venture phases. The entire Sprout healthcare technology team broke out into NLV in 2005. As a spin-off of the Sprout Group, NLVP has been participating in Biopharma since 2005. The business focuses on disruptive and clinically significant technologies with a long tradition of curative Biopharma investments and a recent focus on expanding digital health investments. Since launching its healthcare technology investments in 1993, the group has become one of the industry’s top venture capitalists.
12. Third Rock Ventures
CEO: Tariq Kassum
When Third Rock Ventures was established in 2007, the prospect of turning scientific advancements into ground-breaking medications set public imaginations on fire. In addition to an increased focus on algorithm engineering and digital health technologies, Third Rock Ventures has a history of investing in the Biotechnology sector.
13. Essex Woodlands Health Ventures
CEO: Guido Neels
Essex Woodlands was established by the Essex Venture Fund. Since then, the company has raised seven more funds, totaling over $2.5 billion, making it one of the world’s largest and most renowned Biosciences venture capital companies. The company’s life science and healthcare investment portfolio spans the Biopharmaceutical, Biotechnology, medical equipment, services, and information and technology industries.
14. Blackstone Life Sciences
CEO: Stephen A Schwarzman
Blackstone, one of the largest private venture capital firms, founded Blackstone Life Sciences in 2018 after acquiring Clarus Ventures, an equity firm with $2.6 billion in assets. This fact is the cornerstone of the firm’s infrastructural drive in the biological sciences, healthcare, and Biotech company sectors. The company is steadily growing its life science footprint, emphasizing infrastructure, financial instruments, and real estate.
15. Third Security
CEO: Randal J. Kirk
The venture capital firm, Third Security, located in Radford, Virginia, is distinctive for its increasing global view and very patient approach. The company focuses its investments on both early and late-stage life sciences enterprises. It is noteworthy that the company identifies various affiliate investment companies, or New River Management Funds, which are smaller corporate venture capital funds with a regional concentration.
The Takeaway
Knowing a venture capital firm’s investment portfolio is crucial before contacting them. Does the firm have any background in technology similar to yours? Shortlist a couple of venture capital firms that are likely to be interested in your company in terms of the products and the industry.
Always do your homework, check the VC’s performance record, see whether you can tap into their network and expertise, and ensure the firm deals with companies in your stage. After all, you cannot rush your way into building long-term relationships!
