Goldman Sachs gets into biotech investing with new venture fund

2024-01-03

Dive Brief:

Goldman Sachs Asset Management has wrapped up fundraising for the first fund in its Life Sciences investment venture, securing $650 million in equity commitments.

The fundraising exceeded the firm’s target and ranks as one of the largest-ever rounds for a first-time private life sciences growth fund, Goldman said Wednesday. Institutional, strategic and high net worth investors participated, bolstering a “meaningful commitment” from Goldman Sachs employees.

The West Street Life Sciences I fund will target early- to mid-stage companies with a number of assets in their portfolios, plus startups focused on life sciences tools and diagnostics, Goldman said. The firm is particularly interested in precision medicine, genetic medicine, cell therapy, immunotherapy, synthetic biology and artificial intelligence.

Dive Insight:

Goldman’s foray into the biotech world shows continuing investor appetite in the venture capital arena, even while the public biotech market remains tepid. The last year featured a number of new VC fund launches, including from Dimension, Cure Ventures, Yosemite, Foundery and Bioluminescence Ventures.

“The current environment provides an attractive opportunity for investing,” Amit Sinha, the head of Goldman’s Life Sciences Investing, said in the company’s statement. Technological advances are allowing new ways to attack diseases, creating a “golden era” for life sciences, he said.

Goldman established the life sciences group in 2021. Sinha and his investing team work alongside an advisory board of academics, clinicians, scientific experts and entrepreneurs that Goldman says have an average of more than 24 years of experience in the industry.

Life Sciences I has already committed about $90 million to five companies: Moma Therapeutics, Nested Therapeutics, TORL Biotherapeutics, Septerna and Rapport Therapeutics. The companies are using a variety of technologies including precision medicine and AI to develop new treatments for cancer, neurological conditions and rare diseases.

The venture capital activity stands in stark contrast to the slow pace of initial public offerings for biotechnology companies. A stock downturn that began in late 2021 largely persisted through 2023, leaving companies with fewer options for growth. While the sector’s flagship stock indexes showed some signs of improvement in recent months, they’re still far off the highs reached in 2021.

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