Kleiner, Perkins, Caufield & Byers

Kleiner, Perkins, Caufield & Byers

Dollars: $88 million
Deals: 29
Based: Menlo Park, CA
Website: kpcb.com
Founded: 1972

In 2012, Kleiner Perkins remained one of the larger venture capital operations still focused on life sciences, a go-to funding source for disruptive technologies in the drug, diagnostic, medical device and digital health spaces. Amgen ($AMG) spinoff Atara Biotherapeutics, organ transplant maintenance company TransMedics, absorbable sinus stent maker Intersect ENT, digital health company Red Brick Health and gene sequencer/diagnostics upstart Foundation Medicine are just a few that drew new Kleiner Perkins investments in 2012. Partner Beth Seidenberg told us that the firm believes 2012 was "a great year" for its investments, and noted that they also successfully raised a whopping $525 million last year for the new Kleiner Perkins Caufield & Byers XV fund.

Beth Seidenberg

But while life sciences delivered great results, Kleiner's investments in other areas were less than stellar. Reuters recently reported that Kleiner Perkins has experienced mixed outcomes in computer/consumer technology and alternative energy in the face of bad governmental policies in the U.S., rapidly declining natural gas prices and robust competition from China. The news agency said general partner John Doerr and the firm's principals met with investors in February in an unusual display of frustration over the performance of its funds, reportedly pledging to investors it would do better in the future. And while Kleiner doesn't release details about fund performance, it may have no choice. Xconomy reports that a Reuters-driven lawsuit in California could make that data public (as well as similar records from Sequoia Capital), in order to determine how much cash was invested and the level of returns received from 10 Sequoia and Kleiner Perkins VC funds over several years.

Seidenberg declined to comment on the outside reports. But she said Kleiner Perkins is "quite bullish about the firm, specifically about the life sciences portfolio and the progress that has been made." That means in 2013, Kleiner Perkins will "stay the course," Seidenberg noted, with an eye toward launching companies in which it invests.

"We are focused in general, particularly for this new fund, on early-stage investments," she said. "We like to start companies and we like Series A. And we are still looking across all the different areas--drugs, devices, diagnostics, and healthcare IT."

She added that her firm sees a life sciences industry that will experience a better 2013, in part, because of progress with the FDA, reimbursements, and an opening in M&A and IPO activity on the biotechnology side. Case in point: cancer specialist and portfolio company Tesaro ($TSRO) went public in mid-2012, raising $81 million in what has become a rare IPO success story. And in March 2013, the company pulled in another $91 million in a successful stock offering. With Tesaro, at least Kleiner Perkins, InterWest and other investors obtained a robust return. And Seidenberg said she expects both M&A and IPO activity to return for the other life sciences sectors as well, and "we are really excited about that."

She noted that "if you look at the biotech index in relation to Nasdaq and the S&P, biotech outperformed other indices, and investors are starting to take note of that, and reengage in new companies becoming public entities."

- read the Xconomy report
- here's the Reuters article

For more:
Tesaro pockets $91M in big financing as major cancer trials continue
Amgen and Kleiner Perkins team up on biotech spinoff Atara
TransMedics hauls in $36.2M for transplant tech
Foundation Medicine's $42.5 million round to juice Dx commercialization

-- Mark Hollmer (email | Twitter)

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