Dutch VC firm readies $200M fund with an eye on device and Dx investments

Gilde Healthcare is ramping up a new $200 million fund with plans to invest, in part, in promising early and mid-stage medical device, diagnostic and drug companies focused on developing lower-cost products.

This is the third major fund for the Dutch investment firm, which also has operations in Cambridge, MA, the epicenter of one of the world's largest life sciences clusters. Beyond devices, diagnostics and drugs, Gilde said it will search for opportunities in home and digital health. The GHC III fund already has four investments in the pipeline with 8 other equity deals envisioned over the life of the fund. Gilde plans to commit up to $20 million from the new fund into each company.

Venture investment in devices and diagnostics in particular continues to decline, with fewer deals and generally less money to go around. With that in mind, Gilde noted that it accomplished "an achievement in today's fundraising environment" by closing at its original target, attracting backing from sources including Gilde partners, entrepreneurs and family offices along with international corporate and institutional investors.

Gilde's global strategy will be especially interesting to watch in the United States, where the Affordable Care Act has created an environment favoring devices, diagnostics and drugs that boost the standard of care but also help counter spiraling healthcare costs. A fund that targets companies seeking to create devices and diagnostics that costs less to use would definitely generate lots of interest in this climate.

Gilde is hardly alone in launching new VC funds, however. In November, OrbiMed rolled out a $735 million venture capital fund designed for medical device, diagnostic, biopharmaceutical and healthcare IT investments. Versant said earlier this fall that it is raising a new $250 million fund for devices, diagnostics and other life sciences investments. And then there's Third Rock, Atlas and Frazier Healthcare, which have rolled out life science-focused funds in 2013 worth more than $1 billion.

Gilde's new fund has already invested in four companies, including Sapiens, a Dutch neuromodulation outfit developing a deep-brain stimulation treatment for Parkinson's disease. InovaLabs is also a portfolio company, a device operation that produces portable oxygen concentrators for patients with respiratory conditions. The company scored one of the top 10 VC investment deals in the second quarter of 2012, raising capital from Gilde and others. Gilde's portfolio roster also includes iWalk, a Massachusetts developer of bionic orthotic and prosthetic devices, and Definiens, a maker of image analysis software for digital pathology.

While Gilde has three major funds devoted to life sciences technological innovations, it has a fourth focused on mid-market healthcare service companies. In all, Gilde has more than $600 million under management.

- read the release

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