Deep tech, round 2: DCVC Bio bags $350M fund to chase the tip of the life science spear
It took one trip from San Francisco to Vancouver for Kiersten Stead and her DCVC Bio crew to feel confident about throwing their weight — and cash — behind AbCellera.
CEO Carl Hansen’s academic background and the potential of the platform, which combined machine vision and robotics with microfluidics, were promising. But the site visit sealed the Series A deal, where DCVC was the lead and only investor.
“We saw a company that had a highly advantaged method for basically turning antibody development into a deep search mechanism, similar to what Google might do,” she said.
As AbCellera burnishes its profile through an Eli Lilly-partnered antibody designed to help end the pandemic, Stead and John Hamer, the other managing partner of DCVC Bio, have closed $350 million to bet on companies that similarly sit at the intersection of “deep tech” and life sciences.
DCVC Bio II, just like its predecessor, will look for early-stage companies. Series A, seed rounds should comprise the majority of the portfolio, but they also don’t mind rolling up their sleeves to help spin out a startup if the opportunity arises.
The way Stead describes it, these are places where computation is an “absolute core competency” rather than an afterthought or simply a supporting function.
“Generally speaking, our companies generate their own data, they have their own developers and they’re building novel AI, novel algorithms on their proprietary data to address recalcitrant problems across the life sciences,” she said.
The team — most of whom worked together at Monsanto Growth Ventures before moving under DCVC — is thinking big. Citing “the triple threat of climate change, an increasing global population and fragile global supply chains,” they also want to tap into agriculture and industrial biotechnology.
When it comes to therapeutics, Stead is beginning to see the confluence of different modalities from protein degradation to cell therapies and gene editing.
Chasing those emerging arcs of computation and biology has brought DCVC Bio to new inventions in robotics and automation — think Orca Bio’s automated system for manufacturing cell grafts — as well as living medicines, such as the genetically engineered microbes at Novome. Physical intelligent systems will loom large to complement software breakthroughs, she predicted, while things like reinforcement learning (algorithms that can generate their own data) could work around some of the current constraints in biological research.
Even though pharma these days is clearly cognizant of the need to integrate new computational technologies, Stead said they face the real challenge of recruiting people who have experience setting up commercial AI. That’s not to say they don’t play a key role in bringing the compounds generated on new platforms toward the market; they may just come in later in the process.
“A common thread of entrepreneurs that we invest in and build companies with is that they ran X computational group at X pharmaceutical company but realized that they couldn’t start from scratch and build it from the ground up,” she said, “and and they were really profoundly limited by that, and wanted to start a startup so that they could do X right, whatever their particular area of interest is.”
DCVC managing partners Matt Ocko and Zachary Bogue said on their blog recently the fact that the new fund was raised entirely during the pandemic highlights the appetite for even more. Their first fund has backed some efforts to address the current healthcare crisis; it’s time to find “the next set of solutions to the next set of problems.”