Flagship Reloads With $824M For Latest Growth Capital Fund

Xconomy Boston — 

Flagship Pioneering, one of the Boston area’s top biotech company creators, has closed a new $824 million fund to help fuel the growth of its startups.

The new fund—Special Opportunities Fund II—will complement the cash the firm uses to start its companies, much like the $285 million “Special Opportunities” fund the firm announced in 2016. In a statement, Flagship CEO Noubar Afeyan said the fund will provide “new capital to grow platform companies”—that is, startups based not on a single asset, but a technological platform that can produce several drugs. (Similarly, in January, another Cambridge, MA, biotech VC firm, Atlas Venture closed a $250 million round to back portfolio companies that have progressed to a Series B or beyond.)

Founded and led by Afeyan (pictured), Flagship has made its mark incubating high-profile biotech startups in bold areas of science through its in-house “VentureLabs” unit. These startups often emerge from Flagship fully formed with significant Flagship cash behind them—like Kaleido Biosciences (NASDAQ: KBIO), which emerged from stealth in 2017 with more than $65 million in the bank, 60 employees, and multiple therapies in human testing. Kaleido went public in February.

Flagship’s startups have notched some large private rounds and, in some instances, ended up closing some of the biggest biotech IPOs in recent years—among them the record $604 million haul from messenger RNA drug developer Moderna (NASDAQ: MRNA) in 2018 and also 2017’s largest biotech offering, the $248 million IPO of neurodegenerative drug developer Denali Therapeutics (NASDAQ: DLNI). Flagship was a founding investor in both firms, as well as two others to go public in 2018: Evelo Biosciences (NASDAQ: EVLO) and Rubius Therapeutics (NASDAQ: RUBY).

Flagship launched five startups in 2018: Invaio Sciences, Inzen Therapeutics, Ring Therapeutics, Cellarity, and Integral. Here’s more on the firm and its strategy.