Raising enterprise funding has been quite a challenge over the past few years, even for companies with a strong track record.
This is the experience of Foresite Capital. Despite 47 IPOs, 28 mergers and acquisitions and 58 FDA-approved drugs, the 13-year-old multi-stage health care and life sciences company took two years to raise its sixth fund.
“Almost all of our fund five LPs were renewed in fund six. They just renewed with 30% less capital,” Jim Tananbaum, CEO and founding father of Foresite, told TechCrunch. “We had a hole to fill.”
The San Francisco-based company sought to be certain that its sixth fund was not significantly smaller than its fifth fund, which totals $969 million and is made up of a $775 million core fund and a $194 million companion fund. Foresite has hired Hadi Tabbaa to fill a funding gap and lead the company’s broad-based investment relationship efforts. Tabbaa, previously with B Capital and Coatue Management, helped the company acquire recent LPs, including family offices in Asia and the Middle East.
On Wednesday, Foresite announced it had closed its sixth fund at $900 million.
The company began investing from Fund Six almost two years ago and during this era it supported many interesting companies. Foresite Capital made waves in April when its accelerator, Foresite Labs, together with ARCH Venture Partners, invested $1 billion to incubate Xaira, a recent AI-based drug discovery startup. Tananbaum also highlighted the company’s recent participation in a $135 million Series A round Bio Whipa clinical-stage biotechnology company testing non-opioid pain treatments.
Last summer, Foresite co-led a $115 million Series F for CG Oncology, a drug discovery company that had successful listing on the stock exchange in January.
Foresite intends to support about 20 companies from its sixth fund, writing checks ranging from several million to $75 million. “We named the company Foresite over a decade ago because we thought we knew where health care was going,” Tananbaum said. “We felt it would be a combination of genomics and artificial intelligence that would lead to the ability to individually distribute care.”
These proceed to be big areas of focus for the company.