Long-time healthcare investor looks to double number of life sciences startups in its 'evergreen' fund
Having consistently kept about a dozen life sciences companies in its portfolio over the past few decades, European investor Gimv is ready to double down — quite literally.
The Brussels-based firm is adding life sciences as a fifth platform, alongside consumer, healthcare, smart industry and sustainable cities, with the goal of growing the number of backed companies to 20.
Because Gimv is a listed company on its own and runs on an evergreen structure, it’s hard to pin down an exact figure, as with other VCs operating closed end funds, said Bram Vanparys, who’s newly appointed managing partner, head of life sciences.
“When there’s an exit, the money just flows back to the same balance sheet, same bank account,” he told Endpoints News, so that Gimv can pour the cash into a new startup.
But he did say that at any given time there’s usually “a few hundred million” euros in cash. And his team — now comprising seven dedicated members — will have the capacity to invest “larger tickets,” with initial investments of €10 to €15 million per company.
“When I started in the industry 15 years ago, a company was typically financed for 12 months and the CEO, after six months [is already] going out for his next round,” he said. “Now companies are easily financed for three to four years.”
While the healthcare platform involves his private equity colleagues and focuses on cash flow positive, bigger companies like CDMOs, the life sciences group does VC deals with R&D intensive, cash flow negative companies. Both have historically been housed under the healthcare umbrella at Gimv, Vanparys noted.
Moving forward, the goal is to continue searching all over Europe — occasionally in the US — for promising drug developers, typically in Series A and B. But it won’t be too surprising to see an investment in medtech, digital health, diagnostics or life science tools, or the stray public company in the mix, especially during the current downshift, he said.
“We don’t want to exclude anything,” Vanparys said. “But all of these items are more on an opportunistic basis.”
Still, there are things Gimv likely won’t pursue, such as seed financings that are too early.
“[W]hat we would rarely do is invest like $5 million, for example, in a $10 million round with one other investor to get the company just six months or 12 months further,” he said. “We always want to have the mindset of reducing the refinancing risk as much as possible.”
In the past, Gimv was a founding investor in Ablynx, the nanobody player eventually acquired by Sanofi, and backed Covagen, which was bought out by Johnson & Johnson. Current investments include Precirix, ImCheck and ImmunOs — with the latter two recently raising $103 million and $74 million, respectively, in rounds that featured Gimv.
Amid a broader downturn in public sentiments for biotech investments, he noted the turbulence in Europe’s stock market is a little less severe.
“We never invest in files where the only exit trajectory that we see is an IPO,” he said. “If you look at the numbers, mergers and acquisitions over the last 10, 20, 30 years have always been relatively stable while IPO always works in heavy cycles. There’s a very heavy upcycle and now we go to a very heavy down cycle. And we also don’t want to really take that risk of, you know, that while it goes up, it sometimes goes down. So we deliberately — when we saw it going up, we didn’t take the choice that we want to aggressively push our companies to the stock market because we know that at a certain point in time it goes down. So we continue to focus strongly on M&A as an exit rather than IPO as an exit.”