Andreessen Horowitz just launched its biggest biology-focused fund yet. 2 of the firm's general partners told us how they plan to invest the $750 million.
- The venture capital firm Andreessen Horowitz launched a $750 million fund focused on biology, its third "bio fund" since 2015.
- The firm has recently added two additional general partners to make investments for the bio fund: Julie Yoo and Vineeta Agarwala.
- At $750 million, the third fund is bigger than the first two combined. All of the funds are focused on companies at the intersection of technology, healthcare and biopharma.
- The new fund will pursue opportunities in the life sciences and healthcare technology, along with some that go beyond human health, Andreessen Horowitz general partner Jorge Conde told Business Insider.
- Conde said the fund will also consider companies bringing biology into other industries, such as agriculture, textiles, and manufacturing.
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Andreessen Horowitz just raised a massive fund to make big bets on the future of biology.
The VC firm announced on Tuesday that it had raised a $750 million fund focused on biology, its third "bio fund" since 2015.
The Silicon Valley venture capital firm is best known for its technology investments, including early bets on Facebook, Instagram, Lyft, and Slack, among others.
Starting in 2015, it began building its presence in healthcare and biotech with a $200 million fund. Two years later, the VC group raised a second bio fund worth $450 million. Now, Andreessen Horowitz, also known as a16z, is going in again.
Along with the fund's size, which is more than the previous two funds combined, the company has hired two more general partners to help run the fund. Julie Yoo, who joined in October, was previously a co-founder and executive at Kyruus, a healthcare startup, and Vineeta Agarwala joined from GV's life sciences team.
The initial duo of general partners, Jorge Conde and Vijay Pande, spoke with Business Insider ahead of the third fund's announcement. Here's what they had to say about their investing priorities and what's driving their excitement about biotech.
The fund will focus on life sciences, healthcare, and beyond
As the funds have grown in size, so have their ambitions.
Andreessen Horowitz's investing premise when entering the space in 2015 was expecting the convergence of the technology, biopharma and healthcare industries.
"As that happens, we think there are going to be some very large and important companies that are created at these intersections," Conde said.
Alongside that development, the two general partners have also seen rapid gains in the understanding of biology that have made biotech and drug research a more interesting space. They pointed to the recent progress of cell therapies and gene editing.
"The fact that biology can now be engineered is a fundamental shift," Pande said. "We've moved from discovery to design."
The third fund will target life sciences and healthcare technology companies like the first two, Conde said, but it will also consider making investments in companies using biology beyond the healthcare industry.
"If engineered biology is going to have an impact on human health, it's also going to have a huge impact across a range of industries," Conde said. "Industries like agriculture, food, textiles, and even manufacturing broadly - we're seeing activity in all of those spaces."
The most exciting biotech spaces are modular platforms, a16z says
Within biotech, both partners expressed a particular interest in platforms that can be applied to develop treatments for a wide range of diseases.
"The biggest, most exciting areas in biopharma right now are things like CAR-T and in-vivo CRISPR," Pande said, referencing platforms for cell therapy and for gene editing.
These new platforms have brought an engineering mentality into the lab, he said. That is a "fundamentally different" approach than traditional drug discovery, where if a molecule doesn't work it can't be easily fixed.
While future generations of these technologies will continue to improve, the fund is also open to exploring new therapeutic platforms and identifying when they can jump from concept to business.
At its core, a16z is seeking investments in companies applying the principles and processes of the technology and software space to biology.
"People can claim this is tech or this is engineering … That doesn't make it engineering," Pande said. "A lot of the expertise we bring is identifying whether this has made the shift from science to engineering, and whether this is ready to become a tech company."
While an exciting and fast-moving space, that can also bring risk. Andreessen Horowitz knows that firsthand - the firm invested in the seed round of uBiome, a healthcare startup that went bankrupt in October.
When asked about lessons learned from that investment, Pande said that deal predates the four partners on the biofund team.
He did acknowledge the importance of deep expertise instead of being a generalist investor, which he said the firm has with the range of backgrounds and experiences among the bio fund's growing team.
Read more: Meet EQRx, a startup that just raised $200 million to take on Big Pharma by making drugs cheaper
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