Life sciences venture capital firm Atlas Venture now has $350 million in fresh capital to invest in the early stage biotech companies in the U.S. and around the world.
The new fund is Cambridge, MA-based Atlas’ eleventh. Atlas partner Bruce Booth says in a blog post that the firm began raising funds in April, bringing in capital from previous investors and new ones. It happened quickly. Booth describes the fundraise as the firm’s “fastest and most oversubscribed effort we’ve had in over 15 years.”
Booth points to several trends driving the firm’s investment approach, among them: “massive unmet medical needs” driven by an aging patient population; the push by big pharma companies to externalize their research and development work, which means that more drug discovery work is happening at smaller companies across the biotech ecosystem; and a scarcity of venture capital that has the effect of constraining the supply of new biotech startups. He also points to improvements in the regulatory climate that encourage companies to innovate and smooth the way for them to develop new products and bring them to the market.
Atlas’s portfolio includes companies such as cancer drug developer Bicycle Therapeutics, which raised $52 million earlier this month, and Spero Therapeutics, a company developing new antibiotics to treat drug-resistant bacterial infections. The firm focuses on companies at the earliest stages; Cambridge-based Spero is an example of a company seeded by Atlas to tackle unmet medical needs.
Focusing on early stage companies does not necessarily mean tying up investments for a longer period of time, Booth says. For the last 18 Atlas portfolio companies that were either acquired or completed an initial public stock offering, the median time from seed investment to exit was five years.
“Early stage paradoxically doesn’t imply longer holding periods—if one focuses on high-demand, innovative new medicines,” Booth says.
Atlas has remade itself in recent years. For years, Atlas invested in both information technology and life sciences. But in 2014, the firm separated its life science and IT businesses, with the biotech side retaining the Atlas Venture name. At the time, Booth said that combining IT and biotech had become too bureaucratic, and potentially confusing to both entrepreneurs and investors.
Atlas has been investing in biotech since 1993. Booth says in his blog post that the cycle of biotech launches and exits in the Boston area has solidified the region as a global biomedical center. Though Atlas operates from a biotech hotbed, the firm plans to pursue technologies well beyond its home base. According to Booth, approximately one third of the Atlas companies have Boston connections, another third have ties to the rest of the U.S., and the rest comes from Europe and Asia. Booth says Atlas will begin making investments from its new fund in the fall.