Early stage venture capital firm CRV has closed a $600 million fund that accomplishes a couple of firsts for the venture firm. The fund will embrace strategic growth stage investments as well as early-stage deals and adds bioengineering to the fund’s investment strategy. It’s an interesting development for a firm more commonly associated with investments in Twitter, Dropbox, and Yammer.
CRV noted in a blog post on Medium that the main motivation for the firm’s strategy shift is “to create the ability to invest in later-stage rounds of teams that we have gotten to know well but have not invested in previously.”
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In addition to bioengineering, Fund XVII will also invest in enterprise, consumer-centered companies, according to the blog entry.
Axios reported that the fund’s strategy actually marks a change from CRV’s initial plans to have a separate fund for early stage investments and another fund for investments in growth stage companies. In response to Axios, a statement from the company noted that the new fund allowed the firm to execute on its continued early-stage focus “but with an additional mandate to invest in very selective growth opportunities we believe can drive venture returns.”
The venture capital firm began investing in medtech and biotech businesses last year when George Zachary, a partner with CRV, created the practice. Although CRV plans to use the fund to invest in medtech segments that have not previously been part of its investment strategy, such as companies that use machine learning and other forms of artificial intelligence, it is also interested in tech applications for biology and chemistry, according to the blog post.
We believe that healthcare is ripe for massive disruption from the application of computer power to traditional fields of biology and chemistry, and over the past year George and our newest partner, Dylan Morris, have been active in this emerging area.
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Morris joined CRV last year after working for venture capital firm Innovation Endeavors, which has backed the kinds of medtech companies that have seized CRV’s interest, such as Color and Freenome.
CRV has invested in a few consumer-oriented health IT companies. It took part in Amino’s Series B round three years ago and its Series C last year. The healthcare business, which seeks to improve price transparency, has focused on helping people with self-insured employers find physicians and book appointments based on individual conditions, service needs, health insurance coverage and personal preferences near where they live and work. The investment firm led Health IQ’s Series A round in 2013, which developed a quiz on health knowledge and made it the basis for reducing the cost of life insurance.
For the past year, CRV has made five investments in life science companies, although it was not a specific focus of the previous fund. Among the companies in this area that received CRV backing are:
3T Biosciences, cancer immunotherapy startup which closed a Seed round last fall;
Color, a physician-ordered genetic testing business, seeks to improve understanding of hereditary disorders and access to that information by individuals;
Freenome offers liquid biopsies to screen for cancer. It examines biological signals that span relevant analytes to markers of the immune system’s response to tumor cells;
Plexium is so early stage its website is intentionally blank, save for a brief summary of its business: a comprehensive drug development methodology. A more intriguing description on CRV’s website describes it as taking an “integrated approach to drug development” that brings together different aspects of the drug development workflow from simply identifying a target to lead optimization and multi-dimensional diagnostic tests on one platform.
Recursion Pharmaceuticals wants to change the way we think about drug development through a scalable approach to drug discovery designed to not only identify new drugs but also find new ways to use current drug formulations, according to a summary of the company on CRV’s website. Among its areas of interest are rare diseases, inflammation, and aging.
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