Facing the squeeze from inside and out, at least three corporate venture arms are revamping operations to increase their foothold in earlier and riskier investment opportunities. From one side, the move reflects the growing reliance by pharmas on their corporate VCs to stay on top of new science. From the other, it’s a response to being left in the cold by the large private funds dominating late-stage investments.
In the last 12-24 months, Novartis Venture Fund (NVF), Pfizer Ventures and AbbVie Ventures have expanded their activities through increased funding or investments, and reshaped or grown their teams.
Investors from these and other firms told BioCentury that the emergence of larger funds has put pressure on many corporate VCs to rethink their strategies.
“Most corporate ventures are mid-sized funds, and like other mid-sized funds don’t have the scale to compete in the same pool,” said Anja König, global head of NVF. For that reason, she said, “mid-sized funds including corporate ventures just aren’t very active in driving crossover, series C or even sometimes series B now.”
The large rounds have also penetrated series A rounds, causing some pharmas to arm their venture teams with more cash, and to push for more investments in younger companies.