Wellington Partners tanks up with $237M for its next life sci fund — same strategy, but with more cash on hand
A year ago, when Philadelphia-based Carisma Therapeutics was raising a $53 million A round to back their work on macrophages in immuno-oncology, Munich-based Wellington Partners stepped in with the new crowd to take a ringside seat.
That was a bit unusual for the life sciences crew at Wellington, which tends to stay closer to home with investments in the German-speaking region of European biotech — concentrating on startups like Immatics. But then after 22 years in the investing game, there’s also a sense that they don’t want to be completely tied down by too many self-imposed rules.
“It’s a very hot area,” says Wellington managing partner Rainer Strohmenger, who was familiar with the research on macrophages done in Europe. And Carisma fit into the basic profile of the kind of biotech they like to back: 3 to 5 years out from a potential exit window, with a shot at offering a 5X to 10X return on what they put in.
Today, Wellington is doubling down on that basic strategy, unveiling a $237 million venture round that is fully two and a half times bigger than its last fund. That won’t rank as one of the biggest life sciences funds to come out this year, but they’re a player which will have a significant role in the development of 15 to 20 life sciences companies with this money — investing on average around $5 million to $10 million in their portfolio companies.
Strohmenger is particularly chuffed that most of the investors from his last fund have come in with larger sums on this turn. They like the strategy, and Wellington Partners is keeping to it — with a little tailoring on size.
“We can now deploy more money per company, but the investment strategy will not really change,” says Strohmenger, who counts Wellington as stage agnostic when it comes to their backing. “You’ll find companies in early stages but also in growth stages that fulfill these criteria,” with a focus from biotech (about half) to devices, diagnostics and digital health.
I asked Strohmenger about the general growth of venture investing around the biotech world, something he watches every day. Megarounds that were once a rainy have now become quite common.
“The market is still far from being overheated,” he replies. “And in Europe there’s still a scarcity of capital.”
That’s created some special opportunities in devices, where regulatory hurdles have raised the bar on funding requirements. That in turn has created more attractive investment opportunities, he adds, as the companies that clear that hurdle will be able to implement higher pricing for their products, tapping better markets for the work they do.