In Europe, Contrarian VC Wellington Partners Favors Medical Devices

Article preview from Start-Up - October, 2012

In September, Wellington Partners announced that it closed on €70 million ($91 million) in new venture capital, the first commitment for a fund devoted to life science investing. The target size of Wellington Partners IV Life Science Fund is €120 million, a significant increase over its previous fund devoted to the life sciences, which raised €78 million. Five years ago, this event wouldn’t even have been news, but in a world where venture capital funds are generally contracting, and specifically with regard to life sciences, Wellington offers medical device start-ups a bright spot of hope.

In Europe, Contrarian VC Wellington Partners Favors Medical Devices

Article preview from Start-Up - October, 2012

At a time when venture capitalists are steering away from the medical device sector, the decision by venture firm Wellington Partners Venture Capital GMBH to raise €120 million ($155 million) for a new fund, Wellington Partners IV Life Science Fund, to be invested heavily in devices is noteworthy. In September, Wellington closed on the first €70 million in new venture capital. The new fund represents a significant increase over its previous €78 million fund.

Wellington’s announcement comes at a time when many investors are fleeing the life sciences, and a large percentage of those that are staying are drifting away from medical devices. In the US, for example, according to START-UP’s 2012 Life Science Venture Capital Survey, 46% of survey respondents said they would cut their investments in medical devices in future funds. In Europe, where the venture capital support of medtech is less entrenched than in the US, there has long been a dearth of capital for medical device start-ups. There are fewer than 20 funds of a substantial size in Europe that will invest in medtech at all, and many life science focused firms aren’t raising new funds.

For those stalwart firms that have maintained their medical focus, including Edmond de Rothschild Investment Partners, which began fundraising in February 2012 for a €250 million life science-focused fund, Index Ventures, which raised €150 million for its first life science focused fund in March 2012, Sofinnova Partners, which raised a €300 million fund last year, and Wellington Partners, ready capital, an abundant deal flow, and the exodus of many institutional investors means that “this is exactly the right time to invest in this market because nobody else wants to or is able to,” says Wellington’s general partner Rainer Strohmenger.

Continued...

To read this article in its entirety, purchase now as a PDF and receive it immediately via email. Or get it FREE when you subscribe to Start-Up.

About Start-Up

No publication reviews leading edge companies and technology better than Start-Up. Each issue of Start-Up profiles the most important new product companies, identifies the hottest technology areas, reviews funds flowing into private companies and investment trends, and reports on university tech transfer licensing. Industries covered: pharmaceuticals, biotechnology, medical equipment & devices, and in vitro diagnostics.

Plus:
To find out about more about more about Elsevier Business Intelligence's medical device publications and databases, multi-user access and/or advertising with Medical Devices Today, please contact Kristy Kennedy at (480) 985-9512