Venture fundraising has been an arduous journey in recent years, even for firms with an impressive track record.
Jim Tananbaum, CEO and founder of Foresite Capital, shared the company’s experience, stating, “Almost all of our LPs in fund five renewed in fund six. They just renewed with 30% less capital. We had a bit of a hole to plug.” Despite having a whopping 47 IPOs, 28 M&As, and 58 FDA-approved drugs under their belt, the multi-stage healthcare and life sciences firm, founded 13 years ago, struggled to raise their sixth fund in a timely manner.
In an effort to bridge the funding gap and ensure that their sixth vehicle would not be significantly smaller than their previous $969 million fund, Foresite brought on Haidi Tabbaa to lead the firm’s investment relations effort. Tabbaa, formerly with B Capital and Coatue Management, proved to be a valuable asset in bringing in new LPs, including family offices from Asia and the Middle East.
After two years of determination and hard work, Foresite announced the successful closing of its sixth fund at $900 million.
During the investment period for fund six, Foresite made significant contributions to a number of noteworthy companies. One notable investment was in Xaira, a new AI drug discovery startup, which Foresite Labs, in partnership with ARCH Venture Partners, invested $1 billion in last April. Another standout investment was in clinical-stage biotech company Latigo Bio, which received $135 million in Series A funding from Foresite.
The firm also played a crucial role in the $115 million Series F fundraising for CG Oncology, a drug discovery company that had a successful IPO listing in January.
With plans to support around 20 companies from their sixth fund, Foresite will be writing checks ranging from a couple of million dollars to an impressive $75 million. Tananbaum reflected, “Over a decade ago, we named the firm Foresite because we believed we had an understanding of where healthcare was heading. We anticipated that the combination of genomics and artificial intelligence would revolutionize individualized care.”
These are still critical areas of focus for the firm.
