Atlas doubles down on ‘disciplined’ biotech investing with latest fundraise

Dive Brief:

• Atlas Venture said Thursday that it’s raised $450 million for its 14th fund, through which the firm will continue to seed and grow new biotechnology companies.  
• Partner Bruce Booth called the fundraising round the smoothest and most efficient he’s seen in 20 years at the firm. “Given the level of demand, we could have raised several multiples of what we set as our hard cap” of $450 million, Booth wrote in a blog post.
• Booth, Kevin Bitterman, Michael Gladstone, David Grayzel and Jason Rhodes are the investing partners in Atlas’ new fund. Jean-François Formela, who joined Atlas in 1993 to build up its life science franchise and initiated biotech investing at the firm, decided to stop making new investments and instead will focus on his current portfolio and other duties at Atlas. 

Dive Insight:

Investor confidence in biotechnology is recovering after a significant dropoff in recent years. And 2024 has seen a number of multibillion-dollar fundraises from venture capital firms, including Arch Venture Partners, Flagship Pioneering, Bain Capital Life Sciences and Forbion.

But Atlas, one of the most prominent early-stage biotech investors, is purposely keeping its funds relatively small, according to Booth. The firm has some “scar tissue” from growing too fast in the early part of the century, when it invested in tech as well as biotech companies. Atlas is now determined to “stay disciplined and focused on the model that we continue to try to perfect: seed-led venture creation,” he wrote.

A modest fund size better allows the firm to be dynamic and adaptive and gives a better chance of success in early-stage biotech investing, Booth wrote. “We want to remain company builders focused on disciplined capital allocation and driving superlative returns, and resist the temptation to become asset aggregators in order to absorb higher fees,” he added.

The model has worked well for Atlas over the last two years, as the firm launched 16 new biotech companies and saw several startups in its portfolio achieve significant milestones. Versanis, Aiolos Bio, Mariana Oncology and an immune disease drug developed by Nimbus Therapeutics were all acquired. Four other companies went public and another — Day One Biopharmaceuticals — got its first regulatory approval for a drug.

Atlas has invested in more than 30 fundraising rounds by biotech startups since the beginning of 2022, according to data compiled by BioPharma Dive. All told, Atlas portfolio companies have almost 50 clinical trials underway. The firm last closed one of its own funds in 2022, raising $450 million.

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