Top biotech venture capital funds of 2018 and 2019

by Richard Murphey



Whether you're a startup looking for funding or an aspiring VC looking for a job, it's a good time to be in biotech. 2018 was the biggest year for biotech venture capital on record, with $17B invested globally into biopharma startups 1. Biotech VC firms also enjoyed a great year for exits, with 46 big venture-backed IPOs and $37B worth of M&A exits.

In the first 6 months of 2019, VC funding is down from 2018 levels, but still tracking to be the second highest year ever (in this post, I use "biotech" and "biopharma" interchangeably to mean companies developing FDA-regulated prescription medicines -- no devices, diagnostics, etc. Biopharma is by far the biggest subsector of healthcare VC.).

This post will describe the top biotech venture capital firms from 2018 to today:

  • What kinds of investors fund biotech startups?
  • Who were the most active biotech VCs in Series A and B rounds in 2018? In the first half of 2019?
  • Which VCs made the most money from IPO exits in 2018 and 1H 2019?
  • Which VCs had the best M&A exits in 2018?

Perhaps most encouragingly, the biggest investments and exits were for companies with life-saving medicines and transformational technology. The industry now seems to value true innovation more than incremental advances and me-too drugs. If you're interested in seeing what kind of startups investors are funding, checkout our searchable list of recently funded biotech startups.


Who's investing?


As the amount of capital invested in biopharma startups has skyrocketed since 2013, new classes of investors have entered the sector. Crossover investors (investors who traditionally invest in public biotech companies but also selectively invest in private companies), who used to focus on later-stage investments, are becoming active at the Series B stage, and even lead the occasional Series A round. In 2018, Chinese investors became one of the most active funders of biopharma, both in China and abroad. However, increased US government scrutiny of Chinese investments has essentially halted Chinese investment in US biopharma companies in 2019.

Late stage funding has become highly competitive with many new entrants, but early stage funding is still dominated by traditional biotech VCs.

Notably, generalist tech VCs are slow to enter the sector. Generalist tech VCs are becoming more active in "bio", but generally focus on investing in companies that focus on non-pharma verticals, or that provide products or services to pharma rather than developing their own drugs.

What kind of investors led the most biopharma Series A and B deals in 2018?

How are things shaping up through the first half of 2019?

Series A funding is still dominated by specialist US biotech VCs. European biotech VCs have become more active, representing 14% of lead investors in Series A biopharma rounds in 1H 2019 compared to just 4% in 2018. Pharma corporate VCs and Chinese investors reduced their share of Series A investing in 1H 2019 compared to 2018.

The shift in Series B funding has been more dramatic. Chinese investors were the most active lead investors in Series B rounds in 2018, but their share of global Series B investing has dropped by half in 1H 2019. The decline in Chinese investment in US biotech startups is even more dramatic, with an 80% reduction in Series B investments in US companies led by Chinese VCs.

US biotech VCs have picked up the slack, increasing their share of lead roles in Series B deals from 12% in 2018 to 28% in 1H 2019.


Few active lead investors


2018 was notable not just for total VC investments in biopharma, but also for the record level of Series A investing. As shown previously, Series A investing is dominated by US-based biotech VCs. Within this subset of investors, only a handful of investors lead more than 2 Series A deals each year.

The top Series A investors are also company creators and many of their A investments go to companies they build in-house. They then syndicate out to crossover investors (public equity investors who invest selectively in private markets, often in the last private round), Chinese investors, and corporate VCs.

Through the first half of 2019, Series A investment activity is roughly on pace to match 2018, while Series B funding is set to exceed that of 2018. The list of top investors is shifting, with traditionally late-stage investors like Sofinnova, NEA and Orbimed jumping into the top 5 most active Series A investors.

Who were the most active lead Series A and B investors in 2018?

The world of biotech VC changes quickly, however, and the top biotech VCs of last year may not be key players this year. For example, the first half of 2019 saw a dramatic decline in Chinese investment in US biotech startups. Three of the top 4 lead investors in Series B rounds in 2018 -- Chinese funds 6 Dimensions, Hillhouse and Sequoia China -- have not led a single Series B investment in a US biotech startup in the first half of 2019.

Find biopharma investors who lead Series A and B rounds

Get a list of biopharma investors who led $10.2B in Series A and B rounds from 2018 through today


Who's exiting?


In biotech these days, exit is often through IPO. Here are the VCs who made the most through IPO exits in 2018 and 1H2019:

This is calculated using data from publicly available SEC filings, which disclose the price per share for venture investments, pre-IPO stock splits, shares held by major investors (with 5% or greater ownership), and in many cases the amount that major investors invested in each private round. This data is incomplete in that it only captures investors who own 5% or more of a company's shares, so smaller investors aren't captured. The amount of venture capital invested for each investor is not always disclosed, and in some cases the shares invested in private rounds do not sum to the total shares owned by the investor at IPO. In these cases the amount invested per investor is not meaningful, or "N/M".

The biotech IPO market has continued to be active in 2019. To learn more about the kinds of companies going public, and what valuations these companies commanded as private companies, check out this post. I also did a writeup on the returns that venture capital firms have generated from their investments in startups that went public.

M&A exits were less common, but there were two major exits: Celgene's acquisition of Juno for $11B, and Novartis' acquisition of AveXis for $8.7B. Both companies were public at time of exit, and both raised their Series A rounds less than five years before exit. The major investors in AveXis were Deerfield, Roche Venture Fund, and Paul Manning (an angel investor). The major investors in Juno were ARCH Venture Partners, Venrock, the Alaska Permanent Fund (not really a VC) and Bezos Expeditions.

How is 2019 shaping up compared to 2018? Check out our 1H 2019 biopharma startup and VC report for an in-depth look at the first half of 2019, or check out our free startup dashboard for summary info updated on a regular basis.

For a comprehensive overview of 2018 biotech venture capital and startups, check out our free 2018 biopharma startup report


1 In this post, I use biotech and biopharma interchangeably to mean "companies developing FDA-regulated prescription drugs".

You may also like...

Valuations of biotech startups from Series A to IPO

Venture returns from biopharma IPOs, 2018-Q1 2019

List of recently funded biotech startups

Bay Bridge Bio Startup Database

How to value biotech companies

Biopharma VC Basics 2: How do VCs work?

The world's most expensive drug? A case study of Zolgensma