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Sofinnova raises Europe’s largest early-stage healthcare fund with €472m

The fund has backed unicorns Ascendis Pharma, Shockwave and Actelion

By Eleanor Warnock

Antoine Papiernik

European biotech and life sciences VC Sofinnova Partners has raised its tenth flagship fund for healthcare startups in Europe, the largest focused on early-stage healthcare in Europe. 

The firm says it will deploy €472m across 15 to 20 new biopharmaceutical and medical device startups. The average cheque size will be €25m per company, but will depend on factors such as when Sofinnova enters, a spokesman confirmed. Its last flagship early-stage fund was €333m, announced in 2019

The silver lining from Covid is that there has never been more interest in investing in healthcare,says Antoine Papiernik, managing partner and chairman of Sofinnova. “Finally, we’re seeing significant growth in capital from outside Europe. Europe is being recognised for innovation.”

The firm was originally targeting a €350m fund with a €450m cap. 

Founded in 1972, Sofinnova is one of Europe’s oldest VC firms. It has offices in Paris, London and Milan. The company announced a €445m fund for late-stage healthtech companies earlier this year, and currently has €2.5bn under management. 

Some of the notable companies from Sofinnova’s early-stage portfolio include Actelion, which sold to Johnson & Johnson in 2017 for $30bn (part of Capital II portfolio), CoreValve, which sold to Medtronic for $800m (part of Capital IV portfolio) and Danish company Ascendis, which now has a market capitalisation of $8.86bn (part of Capital V portfolio) after listing on the Nasdaq in 2015

It has also participated in notable rounds recently, including co-leading France’s largest-ever Series A, Mnemo Therapeutics’s €75m round, in June.  

Papiernik says that one of the biggest challenges remaining for European healthtech and biotech entrepreneurs is fragmented local European public markets which, he says, compared with the US, “do not have the critical mass of investors, banks and analysts that are needed to provide the strength of support that companies in this sector need over the long term”. 

“That means that at this stage, biotechs that want to find the necessary capital to support them through their growth, need to find the public investors where they already are, i.e. on the Nasdaq [stock exchange],” he says. “Not everyone is able to do that, and that self-selects a specific type of company that is set up in a way that allows it to go public and raise money on the Nasdaq to fund its long-term growth.”

Eleanor Warnock is Sifted’s commissioning editor. She tweets from @misssaxbys

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