CHEVY CHASE, MD – New Enterprise Associates has replenished its checking account. NEA, one of the busiest venture players in the life sciences industry, has put together a $2.6 billion fund–its 14th. And NEA Managing General Partner Peter Barris says the fund reflects the growing concentration of capital in the hands of a few big players capable of playing on a global basis.
“Our industry has been profoundly transformed in recent years, and a new model has quietly gained traction where more dollars are being committed to large funds that are global and diversified in nature,” Barris said in a statement, boasting that the new fund is one of the largest in venture history. The 10 largest VC firms now snag about a third of all the dollars coming into the venture industry, according to NEA, “with the concentration of capital doubling over the last decade as the overall VC market contracts.”
Barris told The Wall Street Journal that it will invest a third of the cash, about $780 million, in healthcare, with most of that money earmarked for biotech and medical devices. That figure dwarfs any of the new funds that have been launched in the past year.
The biotech industry will welcome the fresh flow of cash. Over the first two quarters of this year VC investing has slowed dramatically, raising fears that the new normal for investing in drug development involves a lengthy dry spell which could start to threaten the industry ecosystem for startups and fledglings. On the other hand, though, investing does tend to fluctuate from quarter to quarter. Over the past 72 hours biotechs in the U.S. and Europe have announced $175 million in new venture cash, compared to the $697 million reported by the National Venture Capital Association for the entire second quarter.
NEA has certainly been a big player on the biotech side of healthcare. Its top partners include James Barrett, on the boards at Amicus, Clovis and Peptimmune, among others, and David Mott, the former CEO at MedImmune, where he set up the venture arm and now sits in the boards at Epizyme, Omthera and Tesaro. Mott recently joined the board at Prosensa after NEA led the startup’s $30 million fundraising round back in January, spearheading its first investment in Europe and signaling its interest in more global deals.
The fat new fund certainly won’t be devoted to life sciences. NEA’s strategic focus is on IT, healthcare and energy.