ARCH Venture Partners Closes on Two New Funds Worth $1.46 Billion

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ARCH Venture Partners announced two new venture capital funds to invest in early-stage biotech companies with a combined total of $1.46 billion. They are ARCH Venture Fund X and ARCH Venture Fund X Overage.

The funds will focus on early-stage biotech companies, with some possible co-investing from both funds. Fund X Overage will be used to take bigger stakes in later-stage companies that need more capital.

“ARCH has always been driven to invest in great science to impact human health,” said co-founder and managing director Robert Nelsen. “There isn’t a better illustration of our principles than our all-in battle against COVID-19. The healthcare revolution will be accelerated by the changes that are happening now and we are excited to continue to invest aggressively in risk takers doing truly transformational science.”

ARCH’ Venture Fund IX and ARCH Venture Fund IX Overage closed in 2016 with a combined $1.1 billion. ARCH Venture Fund VIII and ARCH Venture Fund VII Overage closed in 2014 with a combined $560 million.

Companies ARCH has invested in include Illumina, Alnylam Pharmaceuticals, Juno Therapeutics, Vir Biotechnology, Sage Therapeutics, bluebird bio, GRAIL, Beam Therapeutics and many others.

“Our companies bring cutting-edge science, tools and talent to bear in developing medicines for a wide range of diseases and conditions faced by millions,” said managing director Kristina Burow. “With these two new funds, we are continuing that work with urgency and a deep sense of purpose. We invest at all levels, whether it’s fifty thousand dollars or hundreds of millions, so that each company and each technology has the best chance to advance and change the landscape.”

The timing of the raise, with the economy staggering from the global COVID-19 pandemic, is interesting. Another prominent biotech venture capital firm, Flagship Pioneering, also announced raising $1.1 billion today for its seventh “origination fund” to support biotech startups. Flagship began raising the funds in January and closed on it late last week. Since being founded in 2000, Flagship has created 41 companies, all except one in Massachusetts. Companies it has helped launch include Moderna, Denali Therapeutics, Cellarity, Sigilon Therapeutics, Kaleido Biosciences, Rubius Therapeutics, Codiak Biosciences and numerous others.

Both venture capital firms noted that the COVID-19 pandemic is clearly at the forefront of investors’ minds, with particular political and media attention being paid to the role of biopharmaceutical companies in developing and testing drugs and vaccines against the disease.

ARCH, for examples, noted that Vir, Alnylam, VBI Vaccines, Brii Biosciences and Sana Biotechnology are currently working on developing therapies for COVID-19, that Qanterix is working on clinical testing and supporting clinical trial continuity, Twist Biosciences is advancing genomic and gene engineering tools related to COVID-19, and Bellerophon’s inhaled nitric oxide (iNO) delivery system just received emergency expanded access approval from the U.S. Food and Drug Administration (FDA).

Flagship’s founder and chief executive officer, Noubar Afeyan, pointed out, “The only time I remember people in the White House talking about anything having to do with biotechnology was when the human genome was sequenced, and that was because it was a milestone. Now we’re talking about the impact” of biotechnology on millions, possibly billions, of people worldwide.

Steve Gillis, managing director of ARCH, said, “ARCH is still willing to sit down with a scientist with a lab notebook to develop and translate great science into great companies. Fundamental science is what drives us and creating new diagnostics and disease modifying and curative therapies is what motives us.”

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