by Richard Murphey
Updated April 28, 2023
After a decade-long boom, biotech winter is here.
In 2023, venture capital investment into biopharma startups is on pace to hit its lowest level since 2016.
This post will describe the top biotech venture capital firms that drove this boom, and who is still investing today:
Who’s investing?
In 2021, it seemed like everyone was investing in biotech. Today, only a select few investors are still active. And they are doing fewer deals.
The established biotech investors — venture and crossover funds like RA Capital, Orbimed, ARCH, and Versant — are still active, but at a lower volume than in the past. In addition to the stalwarts, there is a new group of VCs that have been picking up the pace.
The below charts illustrate this trend. In 2022, we see a decrease in activity of crossover investors and established biotech VCs at the B stage, and an increase in “other” investors (including family offices, sovereign wealth funds, and European funds). At the Series A stage, etablished US biotech VCs are ceding share to generalist tech / techbio VCs.
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A changing investor landscape
One paradox of venture capital investing today is that venture firms are still raising huge amounts of cash, despite investing less of that capital. Some of them, like ARCH, Flagship and Versant, are continuing to invest actively despite deteriorating downstream capital markets (these funds were some of the most active during the COVID bubble as well). Others are reserving more capital for their existing portfolio or to invest opportunistically. Other active investors at the Series A stage include techbio funds like Lux, Northpond and Lightspeed, and Catalio.
The crossover / Series B landscape has changed dramatically. RA Capital is still among the most active, though at a significantly lower level than in the past. Casdin and Orbimed are other traditional crossover funds that are still active (though at lower levels). Most of the other household crossover funds of years past have significantly scaled back.
Which VCs made the most from exits?
Below are the VCs who made the most from exits in 2018 through May 2023. This list includes biotech startups that raised $50M+ on NASDAQ or NYSE or were acquired while public (we don’t have data for private M&A). The market values assume the investor held all shares since IPO. This table only includes data for companies where investors held 5% or more of common shares pre-IPO.
This content was originally published here.
