Flagship Closes New $270M Fund For Healthcare and Cleantech Ventures

Source:  Arlene Weintraub, Xconomy, January 11, 2012.

Cambridge, MA-based Flagship Ventures announced today that it has closed its fourth fund, raising $270 M—significantly more than the $250 M the firm initially intended to secure. “We could have raised even more, but we decided to cut it off and get on with forming a portfolio,” says Noubar Afeyan, CEO and managing partner of Flagship Ventures.

Flagship was founded in 2000 and has since built a portfolio of more than 65 companies in the fields of biotech, medical technology, and sustainability. Afeyan believes the firm generated so much interest in its fourth fund because of recent successes from the $235 M fund it established in 2007. That portfolio includes Agios, for example, a Cambridge, MA, company that established a $150 M development deal with Celgene last year.

Flagship’s approach to investing is distinctive in that about 25 of the companies in its portfolio come from its own innovation unit, VentureLabs. It’s not an incubator, Afeyan says, but rather a mechanism for transforming concepts into companies in completely new markets. “We explore opportunities in spaces where there are no companies whatsoever,” he says. Companies emanating from VentureLabs include Hypnion, BG Medicine, and Adnexus Therapeutics. Afeyan estimates that about 35 percent of the new fund’s portfolio will come from VentureLabs.

Arlene Weintraub is the editor of Xconomy New York. She can be reached at aweintraub@xconomy.com and followed on Twitter @awjourn.

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