The UK-based venture capital investment firm Medicxi has closed its third fund, totaling €400M, to nurture early- and late-stage healthcare biotech companies in Europe.
The firm will begin investing in the first beneficiary companies of this fund in the next few months. The big round was raised in just six weeks, and dwarfs Medicxi’s previous fund of €268M back in 2017.
“European venture capital is much more validated than before, so more potential investors look at European venture as an active place to invest,” Francesco De Rubertis, co-founder and Partner at Medicxi, told me. “This was not true maybe five or ten years ago.”
Medicxi has an investment strategy that favors biotech companies with a single drug in development. This goes against the common practice of keeping ‘backup’ candidate drugs in case the lead program goes wrong. “It could look like a risky approach but it turns out focus correlates better with success than with risk,” De Rubertis said to me.
According to De Rubertis, Medicxi is appealing to investors because it has a good track record. One of the firm’s biggest successes has been the US cancer biotech Impact Biomedicines, which was acquired by Celgene in a deal worth up to $7B in 2018. De Rubertis believes Medicxi’s success is partly thanks to the firm’s stringent screening process for investment options.
“We really have a long investigation process,” De Rubertis said to me. “Out of the 1,000 ideas we receive, we will invest in maybe 10 ideas. So there is a big selection.”
The European biotech sector is becoming more mature over the years, which is bringing in higher investments for biotech companies, such as Germany-based BioNTech’s €290M Series B earlier this month. “It’s a solid environment and it’s getting more and more so,” De Rubertis concluded.
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