K2 HealthVentures has secured $400 million to support public and private companies in life sciences and healthcare. The East Coast investor will primarily provide debt financing to enable companies to reach milestones with minimal equity dilution.
Working out of offices in Boston and New York City, K2HV plans to provide companies with $10 million to $50 million and support to help them grow over the long term. K2HV will typically make the money available through debt financings, although it is open to investing in equity, too.
With other financiers also offering debt and equity investments, K2HV is seeking to differentiate its offering through the experience of its leadership team and claimed commitment to long-term time horizons.
“K2HV has patient, permanent capital, with no fixed investment time horizons and no fund cycles. This enables us to be truly long-term oriented and strategic in our approach, and to adapt and grow our investments over time as our partner companies grow,” Anup Arora, managing director and chief investment officer of K2HV, said in a statement.
Arora is splitting leadership responsibilities with Parag Shah, who holds the titles of managing director and CEO. The pair both previously worked at Hercules Capital, where Shah served as group head of the life sciences practice and Arora worked as managing director. Shah left Hercules to work as chief financial officer of health cloud platform provider eCare Vault but has now reunited with Arora.
To get K2HV up and running, Shah and Arora have tapped L1 Health for cash. L1, which lists ex-Roche CEO Franz Humer on its health advisory board, has aspirations to invest up to $3 billion to buy and build healthcare assets.
L1 partner sees K2HV supporting its goals. Meghan FitzGerald, a partner at L1, said the decision to back K2HV reflects a belief that “the market need is ripe and growing for creative financing to accelerate innovation in healthcare.”