VC firm Wellington Partners has raised its fifth fund dedicated to investing in life science companies, with a major focus on those located in German-speaking countries.
Wellington Partners has well surpassed its initial target of €150M for its fifth life sciences fund. With a total €210M raised, this new fund is more than double the size of Wellington’s previous life sciences fund.
The fund will invest in 15 to 20 life science companies, up to €20M in each one. Its main focus will be companies located in Europe, and particularly those in German-speaking countries. However, the VC will also consider selected investments in North America and Asia.
“Germany has a very strong innovation ecosystem, and only a modest amount of VC money available to fund these,” said Regina Hodits, Managing Partner at Wellington Partners. “We are based in Munich, and have close ties to the sources of innovation in healthcare in Germany and the neighboring countries, which provides us with high-quality deal flow and opportunities to invest.”
The investment strategy of Wellington Partners centers around early-stage biotech companies developing technology platforms that can yield multiple valuable products. The VC also invests in developers of medical devices, diagnostics, and digital medicine that are nearing regulatory approval or have already launched a product.
According to Wellington Partners, existing investors including the European Investment Fund and the European Investment Bank, as well as family offices and trusts, have substantially increased their contribution to this new fund compared to previous ones. “This interest has been triggered by successful exits within our existing portfolio and a clear investment strategy,” Hodits told me.
Since the closing of its previous life sciences fund in 2012, the VC has made a return on several successful companies in its portfolio. They include Merck’s acquisition of German immuno-oncology company Rigontec for almost €500M in 2017, as well as the acquisition of Symetis, a Swiss company that developed medical devices to aid heart surgery for €390M.
The new fund also attracted three new investors — German bank KfW, German insurance company Talanx and the investment arm of the University of Texas.
“Fundraising for Healthcare Venture funds in Europe, and especially in Germany has been challenging, but recently more investors have come to realize that this investment segment offers an attractive risk-return profile and have started to invest significantly more in the space,” concluded Hodits. “This has made it possible for experienced fund managers to successfully raise funds, which in turn will enable more innovative companies to get financed.”
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