Print“But amid debate over whether there is a full blown early-stage funding crisis in the life sciences, a few new venture funds focused on early-stage life sciences have closed.”
New Enterprise Associates has announced the close of a $2.6 billion global fund, believed to be one of the largest venture funds ever raised. The fund, NEA’s fourteenth, will be invested globally in the technology, energy, and healthcare sectors. Peter Barris, NEA’s managing general partner, told The New York Times that NEA plans to allocate about one-third, or nearly $860 million, to healthcare companies globally, with most of the money to be distributed to early-stage biotechnology, biopharmaceutical, and medical device companies.
As reports in recent weeks have highlighted, early-stage life sciences companies are seeing less money coming their way. The National Venture Capital Association reported that in the second quarter of 2012, only $697 million of new venture money was infused into the biotech industry, its lowest amount in years. And research by The Burrill Report found that, overall, 35 percent less money came into life sciences companies fundraising for series B round investments in the second quarter of 2012 compared to the same period in 2011.
But amid debate over whether there is a full blown early-stage funding crisis in the life sciences, a few new venture funds focused on early-stage life sciences have closed.
NEA’s $2.6 billion fund follows announcements from Flagship Ventures, which closed a $270 million life sciences fund and Canaan Partners, which closed a $600 million for a new fund, $200 million of which will be allocated to healthcare and the life sciences.
It took just two months of fundraising efforts for NEA to attain its goal of $2.6 billion (and according to NEA, they could have raised more). NEA’s last fund in 2009 closed at $2.5 billion but took over seven months of fundraising efforts. Barris said that their fundraising efforts uncovered “enormous interest in venture capital as an asset class.” Limited partners who had backed away from venture during the financial crisis are coming back.
That limited partners might be opening their doors to venture funds again is a welcome sight considering the major contraction the venture capital industry has seen in recent years. And it’s even more of a respite for the companies in healthcare sectors, as cash starved early-stage healthcare companies will certainly welcome the fresh capital.
July 27, 2012
http://www.burrillreport.com/article-nea_reveals_2_6_billion_global_venture_fund.html
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