The last month has seen a flurry of fundraises from European life sciences venture capital firms as they time their announcements around the ebb and flow of the pandemic in Europe.
This week, the Belgian investment firm Novalis Biotech announced the first closing of its second fund with €8M in the bank. Others raising new funds in the last few weeks include the UK accelerator Start Codon, French investment firm Jeito Capital, the German heavyweight TVM Capital Life Science, the Irish Fountain Healthcare Partners, and the Israeli Peregrine Ventures.
Why are there so many funding announcements from life sciences VCs in late Autumn? One main reason is that uncertainty around the first waves of Covid-19 cases led many venture capital firms to hold back announcements until now.
“I think people are synchronizing their announcements after the summer,” noted Hubert Birner, Managing Partner at TVM Capital Life Science.
“We could have announced it in July, but we decided to do it in October. We were hoping normality would come back to business amid [the pandemic].” As Birner explained, such an announcement would have gone unnoticed among the constant stream of Covid-19 news.
The same thing happened earlier this year. Life science VCs were very quiet about their fundraising during the pandemic chaos of April and May. This was then followed by a burst of announcements in summer. For example, Eir Ventures launched in July, around the same time as other funds closed by Forbion, Epidarex, and BioGeneration Ventures.
However, while fundraising announcements were delayed, VC operations have been able to continue for the most part.
“While the Covid-19 pandemic has presented many challenges, including difficulty in meeting with people face-to-face, we have been extremely pleased by the deal flow we’ve seen in Europe and remain on track,” said Rafaèle Tordjman, CEO of Jeito Capital. “It’s an exciting time to be an investor in biotech, as we are seeing more innovation and exciting science than ever before.”
Furthermore, worldwide lockdowns seem to be causing little negative effect on funding across the biotech sector. In fact, there’s been a massive increase in healthcare investments this year.
“The Covid-19 pandemic has put healthcare front and center,” said Tordjman. “Investors are paying attention to healthcare like never before and are increasingly looking to invest in the sector.”
Big pharma companies are additionally leading many of the VC firms’ fundraising efforts. Examples include Eli Lilly backing TVM Capital, Sanofi funding Jeito, and Novartis collaborating with Start Codon.
“Big pharma is always on the lookout for the next groundbreaking technology, but getting access to such technologies can be a challenge,” said Daniel Rooke, co-founder and COO at Start Codon.
“Investors can offer such access, given their links to institutional organizations and early-stage communities as a whole, and this presents opportunities for big pharma that are now, I think, more widely recognized and accepted than might have previously been the case.”
As we move into winter — and towards Brexit — it’s unclear whether VC funding announcements will again drop over the next few months. However, Birner advised to expect more in the new year after the pandemic’s second wave.
“I would wish to see some new teams and new approaches, and that people will be able to raise money to refresh the face of the industry and have more competition,” he said.
“I was hoping to see a bit of that coming out of the UK, but I think as long as Brexit is unclear, that will take some time. Maybe Germany will have one or two new fund managers and maybe we’ll see something out of Switzerland.”
Cover image from Anastasiia Slynko