ShangPharma Innovation Incubator Expansion Is Taking Strong Root in the Bay Area
In March venture capital firm ShangPharma Innovations announced its plans to expand its life sciences incubator in San Francisco by 40 percent, including state-of-the-art laboratory infrastructure upgrades to its facility. That investment is paying off as the incubator is growing.
The San Francisco Business Times reported that the Bay Area incubator is snagging new tenants as it provides much-needed space for life science companies in the crowded (and expensive) San Francisco real-estate market. But, for ShangPharma, it’s not just about the number of tenants in its life science incubator. The Times reported that the venture capital firm does not require those accepting its seed funding or early funding to set up shop in the incubator. Nor, the Times added, does it require those companies that do take space in the incubator to tap into ShangPharma’s financial resources.
The ShangPharma Innovation expansion provided 9,000 square feet to the already 32,000 square feet of space. The incubator is co-located with ShangPharma Innovation's venture capital team, which makes seed-stage and Series A investments in life science entrepreneurs, and with Shanghai ChemPartner, a leading contract research organization providing services spanning discovery chemistry, discovery biology and preclinical development through manufacturing for small molecules and biologics.
The provision of space is important for many companies, particularly smaller companies and startups that cannot afford their own offices in the pricey Bay Area. But ShangPharma Innovation provides more than space. It also provides financial support through its grant programs and seed funding programs.
But, for ShangPharma’s leadership, the money is not that high on the list of important things the facility offers tenants. In an interview with the Times, ShangPharma Innovation Chief Executive Officer Walter Moos said the “least valuable thing we provide companies is the actual dollars.” He said that “dollars are in abundance” but said perhaps the most important asset is that the incubator provides a place for “mind share.” Meaning that startups and other young companies have access to seasoned professionals who can provide advice on a myriad of related subjects. That kind of philosophy, the Times said, goes to ShangPharma Innovation’s parent company, Shanghai-based ShangPharma Group.
Companies that have accepted ShangPharma’s hospitality include IDEAYA Biosciences, Inc. and Circle Pharma, Inc.
Moos said that one of the strengths of ShangPharma Innovations strategy is that its strategy is actually flexible as it supports the industry.
“Sometimes we do equity, sometimes we don’t,” Moos told the Times. “We don’t have a single model that works. We try to make it work for everybody.”
The Bay Area is well known as a stronghold of biotech innovation. That’s one reason companies like ShangPharma Innovation have established incubators and space for life science companies. There are numerous sites that have been set up to provide housing for the biopharma industry. The Cove, a large life science development, broke ground in 2015. The campus includes seven buildings ranging in size from 102,000 square feet to 158,000 square feet in both single- and multi-tenant building configurations. Some noted tenants include AstraZeneca, LakePharma, Five Prime Therapeutics, Denali Therapeutics and CytomX Therapeutics.