[Updated 6:35 p.m. PT. See below.] Section 32, a venture capital firm headquartered near San Diego that launched in 2017 with a $151 million fund, has had a big month.
The firm, based in San Diego’s coastal Cardiff-by-the-Sea community, was started by Bill Maris, who launched and previously headed Google’s corporate venture investment arm, GV (originally called Google Ventures).
In an interview with Xconomy last year, the former Googler said his firm planned to focus most of its attention on investments at the juncture of life sciences and information technology.
This month, two of the firm’s investments have proved prescient. Johnson & Johnson (NYSE: JNJ) announced Wednesday that it would acquire one of Section 32’s portfolio companies, Redwood City, CA-based surgical robot startup Auris Health, for $3.4 billion in cash.
In an e-mailed statement, Maris called the acquisition an “early validation” of the work Section 32 is doing. He also said he made the Auris investment with a potential acquisition by J&J in mind.
“My original thesis when I invested in Auris… included the thought that the company would make a perfect acquisition candidate for JNJ given their strengths and interests, if that was the route the Auris wanted to go,” he said. “I wrote that in my original notes, so it is gratifying to see that come to pass.”
And while Maris has seen many tech demonstrations over the years, especially during his time at Google (NASDAQ: GOOGL), he said a demo of what Auris was working on several years ago left him “stunned,” and inspired his initial investment.
Auris has commercialized a robotic system cleared by the FDA to assist surgeons in diagnosing and treating lung conditions; the company has said it plans to develop the technology for other procedures, too.
Section 32 participated in the $280 million Series D funding round Auris raised in 2017, its most recent. Prior to acquisition, Auris had raised more than $700 million from its backers in a series of financings.
The biotech is testing experimental therapies for Alzheimer’s disease and other brain disorders. Section 32 participated in Alector’s $133 million Series E financing round, which closed in July.
Maris, perhaps best known for his investments during his time at Google in tech darlings such as ride-sharing behemoth Uber and smart-home product maker Nest, has a longstanding interest in wielding technological tools to extend human longevity. Calico (for California Life Company), the Google-backed biotech that has been researching aging since its founding in 2013 in an effort to determine ways to extend the human life span, was his idea, according to a New Yorker article from 2017 about Silicon Valley’s passionate pursuit of life extension.
While Calico hasn’t talked much about what it’s been up to since its launch, the company last month hired Aarif Khakoo, most recently vice president and head of translational medicine, global development at Amgen (NASDAQ: AMGN), to oversee early-stage drug development—a new role within the business.
The Auris deal and Alector IPO may just be the start for Section 32 when it comes to making bets that pan out nicely: Maris says the firm has dozens of other companies in its portfolio (including San Diego-based Cue Health, which says it is developing new medical diagnostics products), and a focus on supporting “the most important clinical, scientific and technological breakthroughs which will accelerate, distribute and improve care to patients.”
For a time, Section 32 had a website that listed its investments, but today it has only a simple splash page. Crunchbase currently lists 23 portfolio companies for Section 32, including Irish healthcare startup Teckro, which closed a $25 million Series C financing round Thursday.
In late 2017, about six months after announcing its first fund, Section 32 filed paperwork with regulators indicating it planned to raise a second fund, of up to $250 million.
[Paragraph added with information about the second fund.] Maris says Section 32 did raise a second fund around that time, and that the firm recently added to it. He wouldn’t disclose the amount that was raised initially or how much has been tacked on since, but says the firm exceeded its targets.