Despite economic uncertainty due to the continuing COVID-19 pandemic, private equity groups continue to have no problems raising capital from investors—from institutions such as pension funds, banks and insurance companies to wealthy individuals and family offices. In fact, there is so much capital out there that in the case of Atlas Ventures, they found that there were more investment dollars than actually needed. In this highly oversubscribed fundraising round, the early stage venture capital firm investing in groundbreaking biotech innovation found raised $400 million to close their twelfth fund called Fund XII.
TrialSite News provides a brief breakdown of this investment group as part of the Investor Watch segment. And with COVID-19 and the ensuing public health crisis, the topic of advancing innovative new biotechnology companies has never been more important. What if there was a way to rapidly develop a vaccine to all classes of coronaviruses, for example? What difference would that make to the world? How many lives would ultimately be saved? How much economic impact would a vaccine have made? These are questions that lead to venture capitalist (VC) answers.
Atlas Ventures is a venture capital firm that seeks to partner with experienced entrepreneurs-in-residence to create new startups focused on cutting-edge innovation, sourced from leading global institutions and the team’s entrepreneurial networks. Atlas’s model centers on finding appropriate “matches” with the business model and strategy with underlying scientific opportunity and in the process developing valuable assets from product engine platforms to asset-centric entities.
Atlas Venture partner Bruce Booth acknowledges given the advent of COVID-19, “The importance of advancing innovations in biotechnology has rarely felt more critical.” In highlighting the success of this latest twelfth round, he emphasized his firm’s fortunate position to have built trust with the LP community (investors). Atlas has raised $1 billion across three funds to advance new medicines for patients since 2017 alone.
Kendall Square Incubation
If Boston is the capital of biotech, then Cambridge is the epicenter within that capital; and Kendall Square is where it all happens. Hence, Atlas operates an in-house incubation space at their offices in Kendall Square. Operating in the midst of the world’s’ most impressive concentration of not only academic research but also biotech clusters, the firm smartly likes a “hands-on” collaborative model with the upstarts—from inception through actual development of transformational new medicines. This is critically important in the early stages of biotech inception, where so much can go wrong. It is because, in part, this firm takes such a hands-on approach that LP investors oversubscribed the fundraising round. This model leads to better results, Ceteris paribus.
Much like law firms, making partner at a VC firm undoubtedly takes an incredible amount of dedication, commitment, smarts and 80+ hour work weeks and, importantly, results. VC leadership ultimately consume one thing and one thing only: results. Hence, when such a promotion occurs, it makes the VC firms’ press releases. Michael Gladstone undoubtedly earned the privilege spending eight years as a key contributor working on the firm’s portfolio firms, including Akero, AVROBIO, Delinia, IFM and others.
How does Atlas Compare?
There are different methods of comparing firms to rank for superiority. In terms of the top venture firms for total investment in the life sector, Atlas is pretty high, ranking ninth overall by 2018. An impressive figure given the firm focuses on earlier stage investments. New Enterprise Associates came in number one according to this ranking. As Atlas positions itself as an early stage investor, it was surprising to not see the firm ranked in most prominent active biotech Series A investors. Ranker’s listing of top 20 biotech investors precludes the firm. The firm did surface on a top venture capitalist list for investments in oncology-focused firms.
TrialSite News’ cursory review of the firm’s approach reveals a confident and focused group. The firm believes that the imminent opportunity informs the model. Two key focus areas include 1) Drug Discovery Platforms and 2) Asset-Centric Product Plays.
Platforms center on “big science” companies that represent enormous opportunity for investor liquidity at multiple points along the lifecycle of the investment and include examples such as Avila, Co-Stim, IFM, Intellia, Magenta, Nimbus, mirage, Padlock and Surface. While Asset-Centric plays early stage, investments focus on driving promising therapeutics to clinical proof-of-concept status with examples such as Annovation, Arteaus, Delina, LTI, Quartet, Rodin, Spero, Stromedix and Zafgen.
Positioned as a leading biotech venture capital firm, Atlas Venture’s differentiator includes a goal of “doing well by doing good” seeking to identify and build breakthrough biotech startups for a quarter of a century now. By working side by side with exceptional scientists and entrepreneurs, they seek to translate high-impact science into medicines for patients. With a “seed-led venture creation strategy,” the firm rigorously identifies, selects and focuses investment on the most compelling opportunities in a quest to build scalable businesses for the results—realization of value for all involved.