Biotech backer Ver­sant arms it­self with record $400M fund, tar­gets a new wave of up­starts

Brad Bol­zon

Ver­sant Ven­tures has once again racked up a record new biotech fund. Fund VI has land­ed, weigh­ing in at $400 mil­lion, well ahead of the ini­tial $350 mil­lion goal and Fund V’s $305 mil­lion to­tal.

That’s enough cash to back some two dozen up­starts in the biotech world, and you can ex­pect a siz­able amount to be di­rect­ed at the emerg­ing com­pa­nies be­ing forged in its dis­cov­ery in­cu­ba­tors in Cana­da and the US: Blue­line Bio­science in Toron­to, High­line Ther­a­peu­tics in New York, and In­cep­tion Sci­ences in San Diego, Van­cou­ver and Mon­tre­al.

Ver­sant likes to work in places where oth­er ven­ture groups are re­luc­tant to fol­low. That’s once of the rea­sons why the VC has been par­tic­u­lar­ly ac­tive in Cana­da. But the ven­ture team al­so has ex­ten­sive con­nec­tions in Eu­rope, an­oth­er re­gion that has been tra­di­tion­al­ly un­der­served by in­vestors.

The for­mu­la has been ef­fec­tive, with IPOs or buy­outs for Quan­ti­cel, Novi­ra, Okairos, Clo­vis, CRISPR, Au­dentes and Gen­Sight. And while IPOs have been on the wane for more than a year now, in­sti­tu­tion­al in­vestors ap­pear hap­py to wait it out for the next wave of of­fer­ings and M&A.

More mon­ey, more in­vest­ing in more places means Ver­sant will al­so be grow­ing its team this year, Man­ag­ing Di­rec­tor Brad Bol­zon tells me to­day. So look for some an­nounce­ments on that score soon. And while the ba­sic strat­e­gy re­mains the same, he adds, you can ex­pect to see even more ear­ly-stage in­vest­ing as Ver­sant stays fo­cused on tap­ping in­to aca­d­e­m­ic ad­vance­ments “off the beat­en track.”

“Val­u­a­tions in­flate when there’s com­pe­ti­tion for deals,” adds Bol­zon,  “and the com­pe­ti­tion is most fierce in the Bay Area and Boston. We’re tak­ing a dif­fer­ent tack” while the VC group will stay in­volved in both big hubs.

“Clear­ly we rec­og­nize that you can’t de­pend on the IPO win­dow,” he says. “It’s a cycli­cal phe­nom­e­non,” so Ver­sant will shift more fo­cus to M&A and build-to-buy deals like Quan­ti­cel, which was ac­quired by Cel­gene.

The grow­ing re­sources has po­si­tioned Ver­sant to jump in­to some am­bi­tious part­ner­ships as well. Most no­tably, the VC and Bay­er have teamed up on a $225 mil­lion stem cell ven­ture, Blue­Rock, con­vinced that af­ter more than a decade of set­backs in the field, the tech­nol­o­gy and the ex­perts are ready to make a land­mark break­through in the clin­ic, point­ing to a wave of com­mer­cial prod­ucts.

Ver­sant now has more than $2 bil­lion un­der man­age­ment.

5AM Ven­tures: Fu­el­ing the Next Gen­er­a­tion of In­no­va­tors

By RBC Capital Markets
With Andy Schwab, Co-Founder and Managing Partner at 5AM Ventures

Key Points

Prescription Digital Therapeutics, cell therapy technologies, and in silico medicines will be a vital part of future treatment modalities.
Unlocking the potential of the microbiome could be the missing link to better disease diagnosis.
Growing links between academia, industry, and venture capital are spinning out more innovative biotech companies.
Biotech is now seen by investors as a growth space as well as a safe haven, fuelling the recent IPO boom.

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