After a period of revamping a venture strategy gone wrong, Atlas Venture has come out today with news about an oversubscribed 9th fund of $265 million. It's a rare comeback story in a VC industry that is suffering from an overall lack of capital to fuel startups in biotech and other high-risk-and-reward sectors.
As Dan Primack reported for Fortune, Atlas encountered headwinds after the firm grew large during the dot-com era and strayed from its roots in engaging with entrepreneurs on highly innovative ideas and assets in life sciences and tech. The Cambridge, MA-based firm closed offices, let go of staff, and shrunk its partnership from more than two dozen to 7 partners today, Altas Partner Bruce Booth wrote on his blog.
Booth has preached fiscal discipline in his blog posts and practiced the same with his portfolio of investments in biotech companies--including such outfits as Zafgen, Nimbus and Stromedix--with highly virtual strategies that stress outsourcing work and keeping small core staffs of industry veterans. It paid off at Stromedix, which Biogen Idec ($BIIB) acquired last year for $75 in upfront cash and up to $487.5 million in potential payments. And Nimbus and Zafgen have made progress, he said.
As he wrote this morning, Booth and members of the life sciences team at Atlas plan to continue backing asset-focused startups as well as those with platform technologies that can yield many potential products. The firm won its platform gamble on Avila Therapeutics, which biotech giant Celgene ($CELG) scooped up last year for $350 million upfront and up to $575 million in later payments based on milestone successes.
The firm overshot its $250 million target for its latest fund by $15 million. Though the venture group raised far less than recent funds from Third Rock Ventures and New Enterprise Associates, Atlas has raised enough to stick to its focused strategy, which has involved selectively seeding startups such as Nimbus through the early validation phases and then investing alongside a larger number of firms that can help finance the companies to later stages of development.
"We have a very good track record of helping build great companies and great returns (Momenta, Adnexus, Avila, Stromedix, etc…) and lots of emerging ones with great momentum (Zafgen, Nimbus, Miragen, RaNA, Arteaus, etc…)," Booth said in an email to FierceBiotech. "I think LP's like that we are experimenting with new models of doing early stage biotech and have shown we can deliver on it."
- check out Primack's piece
- and Booth's blog