Venture Capital

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.


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