USA – Lightstone Ventures, a bi-coastal venture capital firm focused on the life sciences, has raised another US$375 million to invest in early-stage companies.
The new fund, Lightstone’s third, exceeded what the firm hoped to raise, and received “strong support” from existing limited partners as well as new ones.
Lightstone says that since forming in 2012, it has raised over US$850 million and invested in more than 30 companies, including LocanaBio, Catamaran Bio, Ra Pharma and Tizona Therapeutics.
Lightstone’s latest haul adds to a flurry of big-ticket funds from venture firms focused on drug companies.
This year alone saw Versant Ventures, venBio and Flagship Pioneering, the biotech incubator that founded Moderna, collectively raise billions of dollars for further investing.
For the past few years, and especially since the coronavirus pandemic put healthcare in the spotlight, investors have flocked to young biotech companies.
To turn a profit, venture firms usually need their portfolio companies to either get bought or go public through an initial public offering. In the case of biotech, acquisitions and IPOs have hit record highs in the last couple years, which has made it easier for firms to go back to investors and ask for more money.
Citing data from BioCentury Online Intelligence, the journal Nature reported that venture firms raised US$29 billion for biotech investing last year, up from US$20 billion in 2019.
That momentum appears to be continuing into 2021 as well. Versant, which has invested in roughly 70 companies, including CRISPR Therapeutics, Five Prime Therapeutics and Audentes Therapeutics, completed a US$950 million fundraise in April.
Then in June, San Francisco-based venBio announced it had collected another US$550 million through an oversized fund that saw interest from a “broad range” of institutional investors.
Lightstone is the latest firm to secure more money for biotech investing, with a specific focus therapeutics and medical technologies.
Formed by members of the life science teams at Advanced Technology Ventures and Morgenthaler Ventures, the firm completed its first fund in 2014, raising US$172 million. It then followed with a second fund in 2017, which closed at US$250 million.
In addition to the funding update, Lightstone announced Monday that it has appointed Christina Isacson as a partner and Young Kwon as an operating partner.
Kwon, meanwhile, is coming off a decade at Momenta Pharmaceuticals, which was sold to Johnson & Johnson for US$6.5 billion last year.
At Momenta, Kwon held leadership roles like senior vice president of corporate development and strategy and chief financial and business officer.