Flagship Ventures, a Cambridge-based venture firm focused on life sciences startups, just announced the close of a $285 million "Special Opportunities Fund" through which they will make follow-on investments in its portfolio companies. With this announcement, the firm also announces its second name change in its 17-year existence. From now on, it will be known as Flagship Pioneering.
The recent $285 million Special Opportunities Fund follows Flagship's Fund V, which closed at $585 million in 2015 and is used to invest in early-stage ventures. With this latest fund, the total active capital Flagship is investing in emerging life science companies now comes to $870 million, and the overall funds managed by Flagship Pioneering to $1.75 billion.
Noubar Afeyan, founder and CEO of Flagship, told us, "The Fund V, which was closed last year, is the main fund through which we are capitalizing our ventures. As you may know, 80 percent of our new ventures are internally developed... We create companies from zilch and our main fund will continue to focus on those early stage companies."
He went on to explain that the new, Special Opportunities Fund was created because, as Flagship has been founding multiple companies each year, they have seen these ventures gain great momentum. "We now have companies more in the growth stage and we wanted a means of supporting them to scale. To do so, we decided to add a special pool of capital to invest in those portfolio companies so they can scale properly," he said.
Moving forward, the two funds - Fund V and the Special Opportunities Fund - will operate in tandem. The former fund will still handle early, foundational investments in Flagship's ventures, while the latter will continue to nurture its companies as they grow.
"That’s the logic," Afeyan said. "It's a strategy used in software and IT investment, mostly on the West Coast. As far as we know, it hasn't been used in the life sciences up until this point."
In the past year, the Cambridge-based firm told us its portfolio companies have made the following accomplishments:
- Moderna Therapeutics, the leader in a new generation of medicines based on messenger RNA, announced its plans to build a state-of-the-art manufacturing facility in Massachusetts to support the company’s ongoing and planned clinical trials. Moderna also raised private and strategic capital in excess of $500 million during 2016 and has set records for capital raised and valuation achieved as a private biotech company.
- Three of Flagship’s trailblazing ventures successfully completed IPOs – Editas Medicine, Selecta Biosciences and Syros Pharmaceuticals.
- Novomer, a Flagship portfolio company that converts renewable feedstock into cost-competitive chemicals and polymers, sold its Converge product line and technology to Saudi Aramco at a value of $100M.
- Indigo Agriculture raised $100M in a Series C financing, the largest private round in the agriculture technology sector history, and launched its first commercial product for water-efficient cotton.
- Denali Therapeutics raised $130M in Series B financing to advance its work in defeating neurodegenerative diseases.
