One of the most aggressive investors in bleeding-edge biotechs is gearing up for a new fund, and it's clearly looking to set an in-house record.
Arch Venture Partners is gathering $400 million for Fund IX, according to a new filing at the SEC. That figure is likely a place marker for the final number. Arch raised about $425 million for Fund VIII less than two years ago, after initially setting out for $250 million.
Like many of its partners and rivals in the venture field, Arch has enjoyed the benefits of a three-year bull run for the industry. While that run-up on stocks following an explosion of IPOs came to a screeching halt in the last few months, venture groups like Arch had enjoyed an epic increase in industry valuations. And institutional investors have been warm to a long lineup of venture funds debuting over the past few years.
For Arch, an investor in bellwether upstarts like Juno ($JUNO) and bluebird ($BLUE) along with more recent high-profile ventures like Codiak ($92 million total) and Denali ($217 million Series A), it's been a great time to be in biotech. Arch co-founder Bob Nelsen told me back in 2014 that the purpose of Fund VIII was to go bigger than ever before, and that sentiment seems to fit with its design for Fund IX.
"We believe that what we do well is take large risks on horizontal platforms," Nelsen said then, noting that a pill that could affect Alzheimer's would be worth a fortune. And Arch likes to go in early, backing industry vets while enjoying a chance to spearhead large Series A rounds that can reach anywhere from $50 million to megarounds reaching $200 million or more.
As expected, Arch isn't in a position to comment right now.
"We can not comment because of SEC rules, other than to confirm it is true," Nelsen noted in a response to a query.
But just how well it ends up will offer a fresh example of investors' appetite for high-risk startups that promise to move the dial on treatment standards.
- here's the SEC filing