Tech billionaire starts late-stage life science VC fund

An entrepreneur who made his fortune building a $14 billion tech company is setting up a life science venture capital fund. The Israel-focused fund will target maturing life science startups with a view to helping companies grow into the next Teva ($TEVA) rather than sell up or outlicense their programs, Reuters reports.

Marius Nacht, the billionaire cofounder of Check Point Software Technologies, is behind the fund. Nacht plans to build on his personal dabbling in investing in startups by rounding up $100 million to funnel into Israeli companies. The fund will target companies that have already advanced deep into development and offer them an alternative to selling out when their R&D bills start to escalate.

“We are not here to sell out, we are really here to try … and create a big company, create a financial ecosystem for healthcare companies in Israel,” Nacht said. “I’m wishing for the creation of another Teva or another Check Point in healthcare.”

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Whether the fund is big enough to support this lofty ambition is debatable. At $100 million, the fund will deplete quickly if used to enable companies to advance into late-phase trials without the support of an industry partner. But even if the audacious ambition is ultimately tempered by reality of R&D economics, $100 million in funding would still be a welcome boost to the Israeli startup scene.

Israel creates more than its fair share of biotechs but historically the level of local funding has failed to reflect this activity. The government stepped in to improve the situation in 2010 when it brought in OrbiMed to run a locally-focused fund.

Things have picked up since then. OrbiMed introduced a second, $307 million Israeli fund earlier this year, bringing its total under management in the country up past $500 million. Local firm Pontifax Venture Capital manages upward of $350 million. And the proportion of life science VC investments coming from foreign organizations increased from 17% in 2010 to 60% in 2015.

Nacht has supported the sector to date using his personal fortune--the value of his stake in Check Point is approaching $2 billion--and cash from friends and family, Globes reports. This money has gone into companies including ischemic optic neuropathy hopeful Regenera Pharma.


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