RA Capital kicks off third VC fund as Peter Kolchinsky and Rajeev Shah bank $880M
RA Capital Management, one of the premier healthcare investment managers, is back with another fund to shepherd the next wave of life sciences innovations.
RA closed its third “Nexus” fund at $880 million, the firm announced Wednesday morning, as a means to supplement its investments in private companies. Like the previous two Nexus funds, the goal of Nexus 3 will be to work in tandem with RA’s evergreen fund to invest in therapeutics, diagnostics and other areas in life sciences.
“In the last few years, we’ve become even more active in diagnostics, devices, tools, vaccines, and other aspects of healthcare beyond therapeutics, all the while remaining highly active in therapeutics,” managing partner Peter Kolchinsky told Endpoints News in an email. Kolchinsky added he expects the fund will participate in new deals through the end of 2022.
Kolchinsky and Rajeev Shah, the two who run the show at RA, have managed 218 investments in private companies since 2012, including 128 that have since gone public through an IPO. The firm largely decides to invest in companies that are anticipating the problems of the future and working on solutions.
If nothing is out there, RA will take advantage of the market opportunity and launch a new company through its incubator. But the focus isn’t always on getting a biotech through its public debut.
“An IPO is seldom the defining value creation event for most stocks, so we expect to continue to support our companies after they go public, by providing counsel and often by maintaining a board seat,” partner Jake Simson said in a press release.
The new fund comes about a year after RA closed Nexus 2, which raised $461 million in October 2020. Nexus 1, RA’s first such fund, got started in July 2019 with roughly $300 million.
Among the biotechs that have garnered RA Capital’s support in the last year are Janux Therapeutics, which burst onto the scene with a Merck collaboration in early 2021 and saw RA Capital lead its crossover round; Tyra Biosciences, which went public last month in a $173 million IPO; Icosavax, developing its “soccer ball” VLPs and which also went public in July; and GH Research, an Irish psychedelics company aiming to develop therapies from the drug colloquially known as “toad venom.”