Endeavour Vision closes $275M dedicated med tech, digital health fund
European venture firm Endeavour Vision is switching gears--dedicating itself specifically to med tech and digital health rather than its previous focus on life sciences and IT. Its LPs have bought into the vision in a spectacular way--the firm has raised €250 million ($275 million) in its latest fund--that hit the hard cap and well exceeding the €150 million initial target.
With such a sizable sum, the firm has staked a claim that this new fund, Endeavour Medtech Growth, is the largest European dedicated med tech fund.
The Geneva, Switzerland-based firm has already made two med tech investments out of the new fund--in obesity device player ReShape Medical and in minimally invasive uterine fibroid treatment company Gynesonics. The firm has already closed another two financings that it expects to disclose next month.
"The firm's identity started with IT. We added biotech sometime in 2002. Then we started a med tech practice in 2007," the firm's co-founder, President and Managing Partner Damien Tappy told FierceMedicalDevices in an interview. "The material investment is the same across all sectors, but the value was extremely high with med tech. And it was extremely predictable. We looked at what was the outcome--and that was very much aligned. We never lost a dollar in any med tech companies."
Tappy said Endeavour Vision has invested in 10 med tech companies with 7 exits. He declined to outline the firm's med tech returns, identifying them only as a "significant multiple" that helped to convince new and existing LPs of the prospects of the new fund.
"Originally, Endeavour LPs were successful entrepreneurs plus a group of banks. We have been able to attract more institutional investors. Now, we have probably two-third institutional investors, pension funds and banks with the rest being entrepreneurs and family offices," Tappy said.
The fund will target European and U.S. companies in digital medical devices and digital health that have already gained regulatory approval in the U.S. and/or Europe. It's seeking products that have the potential to change the standard of care in specific indications and expects to a lot between €10 million and €20 million per investment.
An existing approval is key to catching their interest. "We are looking to minimize any remaining regulatory risk. FDA approval takes away a lot of regulatory risk," said Endeavour Vision Operating Partner Robert O'Halla, who was previously the worldwide vice president of regulatory affairs for the medical devices and diagnostics group at Johnson & Johnson ($JNJ). "And depending on the opportunity and advance in patient care, we would go with just a CE mark. We would like to see our money go toward developing the market, rather than developing the product." Both O'Halla and Tappy sit on the board of smart insulin device company CeQur, while O'Halla is also its EVP of regulatory affairs.
But regulatory risk is also becoming less important, the partners noted, with clinical trials often structured specifically to boost marketing, adoption and reimbursement.
The firm is aware that they are going against the grain--med tech is often declared uninvestable by VCs. But they expect that their expertise in helping to build med tech markets will give them an edge in an arena where there are few competitors.
"The big trend that everybody is talking about is the combination of digital health into medical devices," said Tappy. "The way we consume medicine in 10 years will not be the same. It's going to be driven by the combination of IT, data, Internet with medical devices. That's a huge opportunity; I personally believe it's as big as when the Internet came on in 2000."
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