Ysios is optimistic about diagnostic and device investments in 2014

We all know that med tech venture funding declined in 2013 in an ongoing trend in which those numbers have fallen for years. But we've seen some signs of VC life, and yes, even optimism, in 2014.

Among the optimists: Barcelona venture capital firm Ysios Capital announced in March that it was looking for $139 million to seed a new investment fund to back promising diagnostics, med tech and pharmaceutical companies, up to 15 over time, deals envisioned to take place along with other coinvestment funds and investors.

Is this new fund a sign that optimism is returning to med tech venture investing? What's more, does this mean there's a future in investing in early-stage diagnostic and device ideas, even as VCs have shifted their funds toward safer, later-staged investments?

"Definitely," Ysios managing partner Joël Jean-Mairet told me recently via email. "We believe early stage diagnostic and device opportunities have the potential to offer good returns."

But there are caveats, Jean-Mairet continued: "In our view, in such cases it is imperative to seek clearly disruptive and game-changing assets, [and] products that are cost efficient, and should have a clear case of clinical utility and rapid adoption. What this boils down to is assets that upon reaching certain critical milestones have a clear exit potential."

Between 40% and 50% of the new fund will target diagnostics and med tech, Jean-Mairet told us. And it follows announcements from global VC firms including Gilde Healthcare, OrbiMed and Versant that they either had raised or are raising new funds of their own.

Jean-Mairet said that Ysios will solicit investments for the new fund from institutional investors, which include pension funds, banks and large family offices.

-- Mark Hollmer, Editor
FierceDiagnostics (email | Twitter)

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