European venture capital firms Ventech and Ysios Capital Partners, whose funds are traditionally tilted toward early-stage companies, plan to shift further into some late-stage opportunities that can bring quick returns.
The firms’ strategies were evident last week with their participation in fund-raisings for Woburn, Mass.-based biologics developer BioVex Inc. and Madrid-based stem cell therapy company Cellerix SA. Biovex completed a $70 million Series F fund-raising to finish ongoing Phase III trials while Cellerix took in EUR27 million toward an open Series C round for commercialization. The two investors became new shareholders in Biovex and re-upped their commitment to Cellerix.
The strategies come at a time when companies like BioVex, which in a different market might have already had an exit, are presenting new funding opportunities, said Ventech General Partner Mounia Chaoui. Paris-based Ventech plans to explore potential late-stage opportunities while keeping true to its early-stage focus on European companies. Like Ventech, Barcelona-based Ysios will balance late-stage investments with early-stage deals.
Both Ventech and Ysios have fresh capital to put to work. Ventech closed a EUR150 million third fund, Ventech Capital III, in 2007. Ysios closed its first EUR70 million fund, Ysios BioFund I FCR, in August.
Chaoui said Ventech is aiming to realize exits and business development deals for its portfolio companies by 2012, when the firm expects to raise a fourth fund, Chaoui said.
“What we hope is that in 2010 there is going to be a market recovery and an even better one in 2011, and exit as many companies as possible, Chaoui said.
For Ventech, which typically focuses on Series A and Series B rounds, that means selectively pursuing late-stage companies for the upcoming nine investments from its current fund. Those deals will add to the roughly 19 investments Ventech has made from that fund.
Ventech plans to invest 40% of its third fund in biotechnology and the remaining in information technology. So far, the firm has exited one investment from that fund, when Wengo sold to Vivendi Group in March for a 3 times return, according to Chaoui.
Ventech exited about 21 companies from its first two funds, which invested in roughly 50 companies total. Those funds include Ventech Capital I, a EUR62 million fund that closed in 1998, and Ventech Capital II, a 2001 EUR112 million fund. Limited partners in those first funds included mostly European banks, fund of funds and insurance companies.
Ysios already focuses about 30% of its investments on late-stage opportunities, while the remaining 70% is aimed at fueling early-stage development in Spain. That split may move closer to 50-50, said Partner Joel Jean-Mairet.
Ysios has made three investments from its fund so far, including Meyrin, Switzerland-based cardiac catheter ablation company Endosense SA in addition to BioVex and Cellerix. The firm plans to make new investments in Spain in the coming months, Jean-Mairet said.
Ysios’ first fund will make about 10 total investments, focusing mostly on therapeutics and medical technologies. Each investment will average EUR5.5 million. Ysios plans to make about three new investments per year, according to Jean-Mairet.
Ysios’ Spanish limited partners include: institutional investors, pension funds including Telefonica SA, banks including Banco Bilbao Vizcaya Argentaria SA and Banco Santander SA, other financial institutions, local development agencies and high net worth individuals.
Reach Ventech at 33-1-58-19-21-50; Ysios Capital Partners at 93 403 9772.
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