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Flagship Pioneering raises $824M in new fund

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A life sciences-focused venture capital firm has raised more than $800 million for its latest fund.

Cambridge, Massachusetts-based Flagship Pioneering said Wednesday that it had raised $824 million for the capital pool, Special Opportunities Fund II. The firm plans to use the money to build companies through its institutional innovation division, Flagship Labs. The new fund follows a similar one, Special Opportunities Fund I, which it closed in 2016 at $285 million. Flagship opened the fund in December, aiming to raise $700 million, according to a Securities and Exchange Commission filing.

“With each year of company origination, as we honed our pioneering approach, we have steadily increased our capacity to launch transformative ventures,” said Flagship CEO Noubar Afeyan, in a statement. “Our new fund will complement our origination capabilities with new capital to grow platform companies more rapidly.”

According to its website, one company that Flagship helped build was Moderna, which in December launched the biggest initial public offering in the history of biotechnology, raising more than $600 million. The company’s current market capitalization is $6.6 billion. Other companies that have had IPOs recently include Evelo Biosciences, in May 2018, Rubius Therapeutics, in July 2018, and Kaleido Biosciences, which went public last month. Startup companies in the biopharma space that emerged from stealth last year include Foghorn Therapeutics and Cobalt Biosciences.

Prominent companies that have exited in previous years include Acceleron Pharma, Editas Medicine, Agios Pharmaceuticals and others. Flagship spent $294 million in capital on its companies, including money from the Special Opportunities I fund, on top of $2.2 billion from other funds.

Flagship – which changed its name from Flagship Ventures to Flagship Pioneering in January 2017 – describes its strategy as a four-stage process, namely exploration of potential future value; prototyping some of a venture’s hypothetical innovations; building new companies around those innovations that turn out to be successful; and spinning them out of Flagship Labs.

Photo: claudenakagawa, Getty Images

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