New Enterprise Associates has closed a pair of funds totaling $3.15 billion to invest in information technology and healthcare companies. And while med tech may not loom particularly large for NEA in comparison to IT or biotech, the firm does have roughly a couple of dozen disclosed, active medical device portfolio companies.
Last October, NEA made a big splash in med tech when Abbott Laboratories ($ABT) invested in three of its electrophysiology startups in one fell swoop to launch itself into that medical device segment. It bought Topera, which focused on the diagnosis and treatment of atrial fibrillation, acquiring it for $250 million plus undisclosed milestones.
In addition, Abbott acquired the right to purchase Advanced Cardiac Therapeutics, which has a novel ablation catheter that measures the volumetric temperature in the heart in real time so that physicians can better control and predict lesion formation for improved clinical outcomes. At that time, Abbott Ventures also invested in VytronUS, which is developing a low-intensity collimated ultrasound to image and treat cardiac arrhythmias.
NEA makes a handful of new medical device investments a year. Its stated healthcare investment strategy specifically encompasses biopharma, healthcare services and medical devices.
Including several undisclosed investments, NEA told FierceMedicalDevices that it added 10 new med tech portfolio companies during 2013 and 2014. These include Advanced Cardiac Therapeutics, cardiovascular device company Ajax Vascular as well as Indian radiation therapy and diagnostics player Panacea Medical Technologies.
Also in 2013, it invested for the first time in at least two med tech companies that have already had an exit: Topera as well as the recently public chronic pain player Nevro ($NVRO), which has almost tripled in value since its debut. But NEA isn't liquid in Nevro yet--the lock-up expiry doesn't lift until May 5.
In 2012, NEA added at least three medical device startups to its portfolio: dry eye disease treatment company Oculeve; Relievant Medsystems, which has a percutaneous radiofrequency treatment for lower back pain; and nonsurgical bladder disorder treatment company Solace Therapeutics.
One of NEA's most successful recent exits in medical devices was for anesthetics company Ulthera, which Merz acquired for up to $600 million total in upfront and milestone payments in June 2014. The firm said in its blog that investors put less than $40 million into Ulthera--giving this exit the potential for a strong return multiple.
The two new funds include a $2.8 billion fund, its fifteenth, as well as an associated $350 million "Opportunity Fund" that is designed to enable the firm to make growth equity deals for amounts that are larger than those typically invested by the main fund. This gives the already notoriously deep-pocketed firm even more range in the kinds of investments it can make.
"As a growing number of companies are scaling faster but staying private longer, large venture growth rounds are increasingly prevalent," said Scott Sandell, who has been appointed Managing General Partner at NEA, in a statement. "Occasionally we would like to put more dollars to work in these later-stage financings while maintaining diversification within our core fund. The Opportunity Fund also affords the limited partners of the Opportunity Fund increased access to select later-stage rounds."
- here is the release