- Three investors who previously worked at Lux Capital and Obvious Ventures have teamed up to launch a new venture firm that will start and back young biotechnology companies.
- Called Dimension, the New York- and San Francisco-based firm has raised $350 million and is focused on companies at the “interface of technology and the life sciences,” according to a Wednesday blog post from the co-founding managing partners. Dimension is looking for platform technologies that marry elements of biotech with computing, as well as technological tools that aim to make drug discovery and testing more efficient.
- The firm is led by former Lux general partners Adam Goulburn and Zavain Dar, as well as ex-Obvious Ventures managing director Nan Li. At Lux, Goulburn and Dar backed tech-powered biotech startups like Eikon Therapeutics, Kallyope and Recursion Pharmaceuticals. Li is on the board of a number of tech and biotech companies, including DarwinAI and Iterative Scopes.
Goulburn, Dar and Li believe a shift is underway in biotech.
The three friends, who have helped build new companies with their respective firms for about a decade, are convinced the search for new drugs is becoming increasingly digitized. Artificial intelligence and other digital technologies are now more useful in drug development. The shift is birthing new types of biotechs built around high-powered computing software and, unlike previously, staffed with as many computer scientists as biologists.
”The future of this industry is interdisciplinary,” said Li.
That future, in their eyes, needs a specialized investment firm. Traditional biotech venture capitalists have historically been skeptical of tech-focused platforms, while only a “small minority” of tech investors truly understand biotech, according to Dar. Few are fluent in the languages of both fields.
Though the trio’s former firms, Lux and Obvious, do invest in tech-centric life sciences companies — well-funded computational drug discovery firm Recursion is a recent example — they’re generalist firms covering “lots of different subcategories and technology.”
A firm “equally sophisticated in the life sciences as well as technology simply didn’t exist,” Dar claimed.
So last March, they left their respective employers to create one and have spent the last several months putting a fund together to back it.
The result is Dimension, which debuted on Wednesday with $350 million to create and back between 20 to 25 startups. Some of those startups will be drug developers, like Enveda Biosciences, that use a tech-powered platform to find new medicines. Others, like Lamin AI and Kaleidoscope Bio, will make software, databases or other tools to help life sciences companies manage projects, manufacture drugs or run clinical trials. Dimension expects to put anywhere from $1 million to $20 million into each, and has already made a few investments, such as leading Enveda’s $68 million Series B round in December.
Still, Dimension has a long road ahead. Several venture firms have raised new funds in recent years, giving Dimension plenty of competition for potential investments. Returns are also tougher to come by for investors in biotech startups, as initial public offerings remain more challenging to pull off than they were previously. Many private companies, particularly those built on broad, unproven technology platforms, are struggling to raise cash.
“There’s hesitation, angst, excitement, enthusiasm,” Goulburn acknowledged. “We’re three of the closest friends who have been chiseling away at our philosophies and thinking about this future for the last 10 years.”
The founders note they put their fund together during the sector’s recent downturn and got $50 million more than expected. Nearly all of their backers are institutional investors with long-term investing strategies.
“It's not about the next two years. It's about the next 20, 30, 40 or 50 years. This is one of the largest, if not the largest sector, that's yet to be digitized,” Goulburn said. “To us, that’s the largest opportunity in venture today.”