German-based Earlybird Health discussed its plans with BioSpace for its latest venture capital fund that will finance early-stage to late-stage European companies including biotech.
Pictured: European flags flap in the wind outside EU headquarters in Brussels, Belgium/iStock, Alexandros Michailidis
One of Europe’s most established and active venture capital firms has closed its latest fund with the help of health insurers, as it looks to support early-stage European startups through advanced technologies approaching regulatory approval and commercialization.
Last week, the German-based VC firm Earlybird Health announced it closed a €173 million ($185.4 million) fund to finance companies in Europe across the healthcare sector including digital health, diagnostics, medical devices and biopharma
Rabab Nasrallah, a principal at Earlybird, provided additional details to BioSpace on the fund’s investment approach and the potential for the company to expand its activities outside of Europe.
Nasrallah said the firm started the new Earlybird Health Fund in response to a lot of “great innovation” the company has been seeing in the European Union. While Earlybird manages other funds, including Digital West (Western Europe), Digital East (Emerging Europe) and Health, it decided to create a larger fund than the last to invest in late preclinical and early clinical companies in health sectors.
With the new health fund, Earlybird is planning to strategically tie financing activity to companies between the A and B series rounds where there is not a tremendous amount of financing, according to Nasrallah.
So far, the fund has made several investments in the biotech sector, including in Grey Wolf Therapeutics and Arecium Therapeutics, which were preclinical when Earlybird invested in them but are now seeing more significant activity and starting clinical trials, Nasrallah noted
While Earlybird has focused on oncology companies, it is looking to potentially invest in cancer-based startups. The firm is also interested in future investments in other biopharma sectors, such as fibrosis and the central nervous system.
However, Nasrallah hastened to add that Earlybird is “agnostic” when it comes to modality. Though the fund has so far not invested in the cell and gene therapy sector, it is an area the firm is “actively” looking at, she said, especially as non-viral approaches are becoming more prevalent.
“We’re looking at close to the clinic, so not too early in preclinical or maybe late preclinical or in the clinic already and where we can see the impact of our investment,” Nasrallah added.
While Earlybird is currently focused on investing in European companies, Nasrallah said the fund could invest in U.S. or Israeli companies. Still, the companies need some kind of a foothold in Europe, she explained.
Nasrallah said that Earlybird plans to close an investment in the U.S. soon. She also mentioned that firm has a significant focus on the U.K. Since the Brexit decision, many European funds have a limited amount to invest Britain. Earlybird is currently “actively” looking at U.K.-based investment.
The advantage that Nasrallah sees in investing in European biotech is that there is a lot of promising technology in the ecosystem. With valuations still low, it is more affordable for biotechs to start clinical trials in Europe before the U.S.
Earlybird joins life science and biotech VC firms that have closed in early 2024. This month, Goldman Sachs Asset Management closed a $650 million fund while three industry veterans launched Scion Life Sciences with $310 million in its war chest.
Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.
