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Flagship Ventures and Arch backing a $150 million biotech fund from the New York City Economic Development Corp. And Accelerator, CEO Thong Le says, aims to start 8 to 12 companies with this current fund, though some of them will be formed at its headquarters in Seattle.
“There is so much VC money concentrated at these other places that it’s much more competitive to find a good project to fund while in New York City,” Cantley says. “We have all these fantastic institutions but very little tapping of that locally.”
The Petra deal has been a long time coming for Accelerator. The firm was initially formed in 2003 when Leroy Hood of the Institute for Systems Biology teamed with a group of biotech venture capitalists and Alexandria Real Estate Equities to get behind startup biotech ideas that were too early for traditional VC investment. It’s since funded 12 companies with mixed results (read more here about Accelerator’s ups and downs), but had talked publicly for years about expanding into a new market, and eyed New York specifically because of the dearth of on-the-ground early-stage biotech venture capitalists.
That vision finally became a reality in July 2014, when the company raised $51 million, struck partnerships with seven New York city institutions—among them Weill Cornell—and opened up an office at the Alexandria Center. At the time, Le told Xconomy that Accelerator had made its share of mistakes in the past, and that there was going to be much more “discipline and focus” around the types of deals it’d do going forward. Accelerator has since spent a year and a half vetting hundreds of deals and months specifically on Petra before deciding to move forward.
“We have a much tighter business plan around each of these opportunities going into them” than in the past, Le says. “If we’re gonna fail, we’re gonna fail fast. If we’re gonna succeed, we’re gonna succeed through a series of steps that we’ve laid out. That’s why these deals are taking a little bit longer to announce.”
The Petra financing is the largest Series A round Accelerator’s history—prior to this, it had put some $45 million total towards 12 early-stage biotechs, the largest sum being a roughly $5 million seed investment in VLST. The new biotech is named after the ancient Jordanian city of Petra, a historical landmark and once a major center of commerce. It’s a nod, Le says, to Petra’s plans to target enzymes that play a “pretty central role” in a variety of cellular functions—and, perhaps, like Kallyope, to help attract other startup biotechs to New York.