Waltham, Massachusetts-based biotech startup ElevateBio raised $401M through its Series D funding round led by Matrix Capital Management's new fund AyurMaya Capital Management Fund. The round is the largest private biotech fundraising so far this year, displacing ReNAgade Therapeutics — which raised a $300M Series A round yesterday — from the top spot. The venture funding slowdown that started in mid-2022 has not impacted healthcare startups as severely as other sectors. Global healthcare sector startups nabbed $5.7B in VC funding in April alone, taking in the highest share of the total financing deployed. The second highest share of funding went to AI startups which raked in $2.8B funding in the month. The funding pace for healthcare startups slowed slightly in Q1 due to macroeconomic uncertainty and market headwinds. Investors were inclined toward making more early-stage bets than late-stage investments. Late-stage investments were reserved for promising portfolio startups through extension and bridge funding rounds. Silicon Valley Bank (SVB) anticipates that non-traditional investors will likely increase their investments in the healthcare sector. However, valuations will probably be lowered, resulting in many flat and down rounds. Funding is expected to remain consistent over the next few quarters due to heightened investor interest in the sector and the availability of dry powder.
Despite the funding pullback, U.S.-based VC firms raised $21.8B worth of healthcare-focused funds in 2022, the second-highest yearly total behind the record-setting total of $28.3B from 2021. In Q1 2023, VC raised funds worth $6.8B to deploy into healthcare startups. Twenty-seven new healthcare-focused funds closed in Q1 2023, demonstrating a strong investor interest in the sector. Per SVB, roughly $55B in dry powder is available with investors to back healthcare startups. ElevateBio's current funding round brings its total capital raised to date to $1.25B. ElevateBio's CEO David Hallal claims that "the majority of our capital is still on our balance sheet," giving them "degrees of freedom" to grow. The large reserves of capital give the company the luxury of going public at its will rather than out of necessity. ElevateBio last raised a $525M Series C round in 2021. At the time, the round was the second-largest private biotech funding of the year. ElevateBio intends to use the proceeds from the current funding round to advance its tech platforms and expand its geographic reach. Additionally, funds will enable the firm to grow its end-to-end genetic medicine manufacturing platform BaseCamp and gene editing platform Life Edit. New investors Woodline, Novo Nordisk, and Lee Family Office participated in the funding round, joined by existing backers Emerson Collective, SoftBank Vision Fund 2, Fidelity Management & Research, F2 Ventures, Redmile Group, EDBI, Samsara BioCapital, and others. ElevateBio also signed a partnership with Novo Nordisk that could help the firm potentially make $2B, contingent upon achieving certain milestones. Novo Nordisk will provide an undisclosed upfront cash payment to Elevate Bio's integrated subsidiary Life Edit Therapeutics, with additional payments of between $250M to $335M for each milestone for seven programs under the collaboration. ElevateBio added over 15 new biopharma in the last year, including Novo Nordisk. |
