The tech VC firm Playground Global has hired Nate Chang, a healthcare investment banker veteran who previously helped build out Andreessen Horowitz’s biotech team.
Chang’s hiring shows Playground is here to stay in biotech investing. Founded in 2015, the firm started out investing in consumer tech and deep tech, adding a biotech focus in 2017. Now, the VC firm manages over $1 billion in assets and has a portfolio of about a dozen life sciences investments that includes startups like Manifold Bio, Atomic AI, and Ultima Genomics. Four of Playground’s last six investments fall in its “engineered biology” theme.
In an interview with Endpoints News, Chang said the 43-employee firm will keep growing, pointing to other hires like Katja Gagen, who recently joined as an operating partner to lead marketing and communications.
“The firm wants to continue scaling,” said Chang, who started at Playground on July 10 as an operating partner to support the firm’s engineered biology portfolio. “Life sciences will be a pillar in our going-forward vertical focus alongside some of the established deep-tech verticals we’ve already invested in.”
Chang also hinted a third fund is in the works, noting Playground’s last fund was raised in 2017.
“There’s something coming around the corner on the fund side, so stay tuned for that,” he said. “It’s been a while, so you can probably sense what’s coming around the corner.”
Chang: Watch for more partnerships, potential IPOs over next few months
A Bay Area native, Chang spent 14 years in life sciences investment banking on the West Coast at banks like Morgan Stanley, Credit Suisse, and RBC Capital Markets. He jumped to a16z in 2019 to build its corporate development team for biotech. Before leaving for Playground, he had a brief stint at CBC Group, previously called C-Bridge Capital.
Chang is an operator, not an investor. Previously at a16z and now at Playground, he advises the firm’s portfolio companies on capital raising and business development decisions.
In this market, he said helping Playground’s portfolio companies find the right partnership deals is a key focus. For instance, he said more startups are simultaneously announcing a Series A raise with a partnership deal.
“We’ve got a lot of early-stage companies, and I think there’s a view that business development has been cast aside, especially during the bubble,” he said. “If you’re a biotech company and need to raise money, guess what? Just go to the capital markets. I don’t need to economically dilute my portfolio by signing a partnership. Now we’re back to 2019, OG rules in terms of biotech build and scale.”
In his near-term outlook for the industry, Chang temporarily put on his banking hat. He sees pharma M&A continuing, with deals in the $2 billion to $8 billion range as the sweet spot.
He added that many biotechs are “sharpening their pencils” in preparing paperwork to go public. In particular, he said he’s encouraged by seeing successful follow-on raises for public biotechs backed by fresh data. He said that that will transfer to the IPO market, with companies with strong data eyeing early next year as a possible window.
“There’s going to be a bolus of companies trying to get out in late fourth quarter, first quarter 2024,” he said.
