Understanding Mega-Rounds in Biotech Funding

🚨 I analysed all $10M+ biotech funding rounds from the past six months. Here’s the direction we’re heading in 👇 - Hundreds of companies & deals. - Billions raised. - Deal flow still slower than usual - but capital is moving again. 🧬 𝗚𝗲𝗻𝗲 𝗘𝗱𝗶𝘁𝗶𝗻𝗴 𝗶𝘀 𝗯𝗮𝗰𝗸. → Funding is climbing fast. → Investors are moving past CRISPR headlines - toward delivery systems, manufacturability, and non-viral platforms. → This is where the next build-out begins. 💥 𝗔𝗗𝗖𝘀 𝗮𝗻𝗱 𝗕𝗶𝘀𝗽𝗲𝗰𝗶𝗳𝗶𝗰𝘀 𝗮𝗿𝗲 𝗮𝗰𝗰𝗲𝗹𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝗮𝗴𝗮𝗶𝗻. → Rounds are big - several $100M+ raises this year - but fewer players. → We’re entering “ADC 2.0”: smarter payloads, bispecific formats, and CDMOs scaling capacity. 🏗️ 𝗠𝗮𝗻𝘂𝗳𝗮𝗰𝘁𝘂𝗿𝗶𝗻𝗴 𝗜𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 (𝗖𝗗𝗠𝗢 / 𝗖𝗠𝗖) 𝗶𝘀 𝗽𝗶𝗰𝗸𝗶𝗻𝗴 𝘂𝗽 𝘀𝗽𝗲𝗲𝗱. → Investors are backing enablers - not just therapies. → The next capacity race has already started. 🧫 𝗖𝗲𝗹𝗹 𝗧𝗵𝗲𝗿𝗮𝗽𝘆 𝗶𝘀 𝗰𝗼𝗼𝗹𝗶𝗻𝗴. → Fewer rounds. Smaller checks. Consolidation everywhere. → Leadership turnover usually follows - not expansion. 🧠 𝗔𝗜-𝗗𝗿𝘂𝗴 𝗗𝗶𝘀𝗰𝗼𝘃𝗲𝗿𝘆 𝗵𝗮𝘀 𝗹𝗼𝘀𝘁 𝗺𝗼𝗺𝗲𝗻𝘁𝘂𝗺. → The hype hasn’t vanished, but focus has shifted. → The winners will be those who embed AI in discovery - not make it the story. 📈 𝗠𝘆 𝗽𝗿𝗲𝗱𝗶𝗰𝘁𝗶𝗼𝗻: ➡️ The next phase of biotech growth will be built around Gene Editing + Delivery, ADC 2.0, and Manufacturing Scale-Up - the platforms that make advanced therapies possible at scale. 👥 𝗪𝗵𝗮𝘁 𝗱𝗼𝗲𝘀 𝘁𝗵𝗶𝘀 𝗺𝗲𝗮𝗻 𝗳𝗼𝗿 𝘁𝗮𝗹𝗲𝗻𝘁? → Hiring patterns are already shifting. → The companies building infrastructure and integration capability will win. Expect rising demand for: • CMC and Manufacturing Operations leaders • BD heads in ADC and delivery technology • Cross-functional executives who can link science, scale, and strategy These hires are already coming up in our searches, and I doubt it'll change any time soon. Need some help hiring in these areas? Let me know - always happy to chat. #Biotech #LifeSciences #VentureCapital #GeneEditing #ADCs #CDMO #ExecutiveSearch

If you’re a biotech start-up looking for funds in 2024, either you’re lucky enough to raise a nine-figure venture round, or you’re scrounging for what’s left over. In the first quarter of this year, biotechnology and pharmaceutical companies collectively raised $5.9 billion across 209 rounds, according to the latest Venture Monitor report from PitchBook and the National Venture Capital Association (NVCA). The dollar amount is an increase from the 2023 quarterly average, but it’s spread across fewer deals. The total deal count is the lowest since the third quarter of 2018, during which PitchBook recorded 202 venture rounds. Before that, only 2016 saw so few deals. The dip is especially low among early-stage deals. Industry watchers say investors are still risk averse and, consequently, prioritizing investment in companies whose drug candidates are farther along in development. “I think the bar is still high,” says Katie Walsh McCarthy, chief innovation officer at the Halloran Consulting Group, Inc. “Investors have really reestablished their expectations. They do want to ensure there’s a reasonable amount of risk.” Those start-ups that have managed to buck the trend and raise “mega-rounds”—$100 million or more—have a few things in common. For one, investors are still likely to back experienced management teams. Investors are also more inclined to fund clinically validated science—that is, drug candidates that have been tested in humans. But Carolina Alarco, founder and principal of the consulting firm Bio Strategy Advisors, LLC and an angel investor, worries that this dynamic creates a secondary problem: that biotech may be “losing its edge” by deprioritizing newer programs. “Experienced CEOs and founders normally gravitate toward proven technologies and platforms to have the most likelihood of success,” Alarco says. “Young entrepreneurs and scientists, they have the true innovation. They have the real treatments that are going to come out in 10 or 20 years. I think we’re doing a disservice to science by not opening up some funding to these highly innovative approaches.” More detail in my latest for C&EN: https://lnkd.in/emcUD7aW

Biotech investing in 2024 was defined by bold bets and shifting priorities with a strong concentration of capital in fewer, high-value deals. RA Capital led the way as the most active venture firm, while ARCH Venture Partners focused on select but sizable financings. Novo Holdings, GV, and OrbiMed rounded out the top five, demonstrating the continued dominance of well-established players. Biotech companies leveraging AI secured $5.6 billion in venture funding in 2024, nearly three times the previous year, highlighting investor confidence in AI-driven drug discovery, diagnostics, and precision medicine. Megarounds were a defining trend with 96 biotech companies secured financings of $100M or more last year, signaling that while early-stage funding remains selective, investors are willing to back high-potential innovations at scale. As the landscape shifts the industry will be watching to see if 2025 will bring a more diversified spread of capital, or if large funds continue to double down on a select few. 

40%+ of Seed and Series A funding in 2026 is flowing into $100M+ rounds, as Zachary DeWitt recently highlighted. The market is making a big bet on mega rounds. I'm taking the under on their performance--I'd bet heavily on an index of regular-sized seeds vs the megas.   Here's what I think is happening. Ambitious founders surrounded by AI hype see Anthropic's and OpenAI's returns and think they need to do something similar. In their minds, this means raising huge rounds to fund NBA-level salaries for the most legible AI talent at Meta, Google, other AI labs, etc.   The problem is that this approach is fundamentally derivative. This is not how Anthropic, OpenAI, or any of the other most disruptive AI companies started. Disruption requires doing something that experts dismiss. If a startup requires raising mountains of cash to hire legions of expensive experts, it might have some degree of success, but it will not be disruptive.   Look, this is tricky. Anthropic raised giant early rounds and seems very mission-oriented, so I don't want to paint with too broad a brush here. That said, Anthropic's $124m Series A in 2021 was actually very unconventional in many respects, even in the context of a frothy 2021.   Besides being derivative (and thus not disruptive), this approach also selects for mercenary over missionary culture. And all things being equal, companies with missionary culture outperform. Because if you really care about solving a problem, you're willing to make sacrifices and do non-consensus things—not just copy what worked for the last wave.   So, why does this pattern persist despite these concerns?   The most economically dominant point is that the investors doing the big rounds make a lot of money on management fees. When partners at funds enjoy massive compensation from management fees, investment performance becomes a "nice-to-have."   To be fair, many of these partners are post-economic and are arguably more interested in hiring huge teams and building "platforms." The fees justified by mega rounds align nicely with the expense structure of empire-building. On the other hand, the smaller rounds are done by firms where the principals are making much less on management fees and have much more incentive to see a return on the capital via carry.   The mega firms would surely retort that many of the smaller rounds are done by firms that are here today, gone tomorrow. And there's truth to that. Mega firms with billions of assets are inherently more stable. At the same time, those firms are fundamentally targeting much lower returns. It's trade-offs all the way down.   So when I look at that 40%+ number, I see capital flowing into a pattern that selects for derivative thinking and mercenary culture, with an underlying incentive structure that ensures it keeps happening.   And that's why I'm taking the under on the performance of that 40%.

In the first half of 2024, more than 50 biotech companies raised venture rounds of $100 million or more. If this pace continues, we will be approaching market conditions seen during the peak around three years ago. Take a closer look at our latest life sciences research ⬇️ ▪️ A few factors are driving this push to mega funding rounds. Most prominently, rather than focusing on the early-stage investments popular in the boomtimes of 2020 and 2021, investors are interested in companies that are well into trials with strong clinical data, as they are seen as less risky relative to discovery stage companies. ▪️ Most notable, Xaira Therapeutics out of the Bay Area, announced it raised $1 billion in April to fuel its research in drug discovery with help of artificial intelligence making it one of the largest biotech venture deals ever. ▪️ While a great deal of the capital raises will be used to grow operations and support research, over the past year plus we’ve seen several cases where mega raises have translated into a real estate transaction. In March 2023, Cargo Therapeutics raised $200 million – nine months later they signed for a 99,000 s.f. deal in Mid-Peninsula in the Bay Area. Also located in the Mid-Peninsula, Terremoto Biosciences signed a lease for 27,000 s.f. earlier this year after raising $175 million in November 2023.

Why are biotech rounds ballooning while early-stage deals disappear? A 2025 VC review finds biotech financings are larger and skew later than the broader market; CSL’s $117M commitment to advance Varm illustrates that trend. That concentration accelerates clinical progress but widens a funding gap for seed and Series A teams doing the hard work of de‑risking targets and platforms. If we want a steady pipeline of innovation, LPs and founders need instruments that bridge discovery to IND. https://lnkd.in/efysaxR9 Averin Capital #drugdiscovery #innovation

BIOTECH FINANCING UPDATE 6/29/25 - 7/9/25 Private-biotech financing continues to thin out. Endpoints News counted just 31 “megarounds” (≥ $100 M) in H1 2025 — down 38 % from 50 a year ago. Although the average round crept up to $185 M, total dollars plunged because the billion-dollar outliers of 2024 disappeared. Raymond James now pegs Q2 2025 as the slowest quarter for private-biotech capital in seven years, while William Blair tallied only 52 private deals worth $4.1 B versus 71 / $7.1 B in Q2 2024. Stubbornly high rates, sagging XBI (-7 % YTD), slim IPO windows and policy noise (budget cuts, tariff threats, FDA oversight shifts) have even the former “haves” feeling the squeeze. (Table describing the deals at the bottom from Endpoints News) 🧬 CoRegen Inc. — $93.4 M private placement Undisclosed investors back the gene-editing startup to scale manufacturing and launch a Phase 1/2 trial of SRC-3-knock-out Treg cells for solid tumours (TNBC, GBM) in H1 2026. ☣️ Actithera — $75.5 M Series A M Ventures , Arkin, Hadean Ventures, Sofinnova Partners & 4BIO Capital fund the radiopharma newcomer to take its FAP-targeting Lu-177 radioligand into the clinic and build hubs in Cambridge, MA and Oslo. 💵 AN Venture Partners — $200 M debut fund The ARCH Venture Partners -allied VC closes its first life-sciences vehicle with LPs including Otsuka & Shionogi, aiming to export Japanese science via US-based startups. 👶 Sama Fertility — $3.8 M seed SNR Ventures and others bankroll “SimpleIVF,” a largely at-home, $6 K IVF cycle with only two clinic visits and a money-back baby guarantee. 💊 Syntis Bio — $33 M Series A Cerberus Capital Management leads funding for Bob Langer/Giovanni Traverso spin-out using mussel-inspired polymer coatings to deliver an oral duodenal-blocking obesity pill and enzyme therapy for homocystinuria. 🧠 Handspring Health — $12 M Series A Cobalt Ventures tops up the youth-mental-health tele-startup to expand a “Complex Care” program (3-6 hr/week therapy, crisis line) aimed at keeping kids out of hospitals. 🦠 Vor Bio — $175 M private placement RA Capital Management, Mingxin Capital & Forbion fund a pivot from oncology to autoimmune work, paired with a $45 M telitacicept licence from RemeGen. Thats all, not too much movement. For more financing updates please consider following Liam Killingstad to continue feeding my ego!

In a recent report “Biotech financing: darkest before the dawn” by Melanie Senior published in Nature Biotechnology, she examines the biotech sector's financial landscape in detail, offering insights into the challenges and emerging opportunities in 2024. Here are some key takeaways from the report: ✔ Modality matters. Antibody-drug conjugates (ADCs) and radioligand therapies (RLTs) are gaining significant investor interest, with companies like Tubulis and Pheon Therapeutics raising $139 million and $120 million, respectively, to advance their cancer-focused ADCs. Meanwhile, cell and gene therapy (CGT) companies are struggling, with venture funding, the number of financings, and average round sizes all down sharply in 2024. ✔ Investment trends are showing a clear preference for later-stage programs. The average Series A round in 2024 is $80 million, more than double the $40 million average in 2019. So far this year, a quarter of all Series A rounds have been over $100 million. The trend towards fewer but larger funding rounds is evident, with at least 50 companies raising rounds worth $100 million or more in 2024. ✔ Artificial intelligence (AI) and machine learning continue to attract significant venture capital. Companies in this space are on track to raise more funding in 2024 than in any previous year, except for the peak in 2021. For example, Xaira Therapeutics raised a record-breaking $1 billion in a Series A round, the largest initial funding commitment in Arch Venture Partners' history. ✔ Corporate venture capital (VC) is increasingly stepping in to support early-stage innovation, particularly in Europe. In the first half of 2024, European biopharma and platform firms raised $2.2 billion, putting the region on track to surpass all years except 2021. Notable investments include Disco Pharmaceuticals' $21.5 million seed round, led by corporate VCs like M Ventures and AbbVie Ventures. ✔ The biotech sector is experiencing a bifurcation. While companies with later-stage clinical assets are attracting large rounds of funding, early-stage companies without proof-of-concept data face significant challenges. Valuation corrections are occurring, particularly for those seeking Series B or C funding, with many companies forced to accept lower valuations than during the pandemic-driven boom. ✔ Despite facing challenges similar to its Western counterparts, including muted IPOs and a broader economic downturn, China remains a "reservoir of opportunity" for investors. The quality of Chinese biotech assets is improving, yet they remain undervalued compared to U.S. counterparts. If you are building a startup in aging/biotech, reach out to our team at LongeVC #venturecapital #biotech #drugdiscovery Image source: Senior, M. Biotech financing: darkest before the dawn. Nat Biotechnol (2024).

$2.3 billion in biotech funding in two weeks! Here's where the money went and what it's telling us. 💰 The $100M+ Club → Isomorphic Labs pulled in $600M for AI-driven drug discovery. Alphabet-backed and London-based → Immunic closed $200M upfront (up to $400M total) to push oral therapies for MS through Phase 3. BVF Partners led, with RA Capital and OrbiMed in the syndicate. → Talkiatry raised $210M Series D for virtual psychiatry. Perceptive-led. Is mental health infrastructure becoming its own category now? → Sensei Biotherapeutics raised $200M alongside its acquisition of Faeth Therapeutics. → Korsana Biosciences emerged with $175M in combined seed and Series A. Wellington, TCGX, Sanofi Ventures, Foresite. If you're building in Alzheimer's, this is a signal worth noting. → Evommune raised $125M for oral and injectable anti-inflammatories. Inflammation continues to attract serious capital. → ILiAD Biotechnologies closed an oversubscribed $115M Series B for a whooping cough vaccine. RA Capital led. 🎯Three things worth noting: 1️⃣ Neuro and psych dominated. Immunic, Talkiatry, Newron ($41M for treatment-resistant schizophrenia)... looks like investors are betting CNS is finally crackable. 2️⃣ AI drug discovery checks are still massive. $600M for Isomorphic says the field is really leaning into AI drug discovery - this is the future people....get used to it. 3️⃣ Sanofi Ventures appeared in multiple deals. When a pharma strategics arm shows up repeatedly in the same window, they're most likely telegraphing pipeline priorities.

𝐌&𝐀 𝐎𝐛𝐬𝐞𝐫𝐯𝐚𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐁𝐢𝐨𝐏𝐡𝐚𝐫𝐦𝐚 𝐢𝐧 2023/24-𝐂𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐓𝐫𝐞𝐧𝐝𝐬 𝐢𝐧 2025? 7 𝐊𝐞𝐲 𝐕𝐂 𝐓𝐫𝐞𝐧𝐝𝐬 𝐢𝐧 𝐁𝐢𝐨𝐭𝐞𝐜𝐡/𝐏𝐡𝐚𝐫𝐦𝐚 (2023–2024) 1️⃣ 𝐌𝐞𝐠𝐚𝐫𝐨𝐮𝐧𝐝𝐬 𝐃𝐨𝐦𝐢𝐧𝐚𝐭𝐞 𝐄𝐚𝐫𝐥𝐲-𝐒𝐭𝐚𝐠𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐧𝐠 (≥100M) Driven by investor confidence in leadership teams/platform technologies ✅Xaira Therapeutics: Raised $1B in Series A (2024) for AI-driven drug discovery, backed by ARCH Ventures & Foresite Capital ✅Kailera Therapeutics: Secured $400M in Series A (2024) to develop obesity therapies, leveraging GLP-1/GIP agonists from Chinese partner Jiangsu Hengrui 2️⃣ 𝐀𝐈/𝐌𝐋 𝐏𝐥𝐚𝐭𝐟𝐨𝐫𝐦𝐬 𝐑𝐞𝐯𝐨𝐥𝐮𝐭𝐢𝐨𝐧𝐢𝐳𝐞 𝐃𝐫𝐮𝐠 𝐃𝐢𝐬𝐜𝐨𝐯𝐞𝐫𝐲 VC funding for AI-driven biotechs surged with $9B investment b/w 2019–2022 & in 2024, companies integrating ML into R&D attracted large rounds ✅Formation Bio: Raised $372M in Series D (2024) for AI models predicting drug toxicity and efficacy,(w Sanofi/OpenAI) ✅Freenome: Secured 35B total (2024) for AI-powered early cancer detection via blood-based multi-omics 3️⃣𝐎𝐛𝐞𝐬𝐢𝐭𝐲 𝐚𝐧𝐝 𝐌𝐞𝐭𝐚𝐛𝐨𝐥𝐢𝐜 𝐃𝐢𝐬𝐞𝐚𝐬𝐞 𝐓𝐡𝐞𝐫𝐚𝐩𝐞𝐮𝐭𝐢𝐜𝐬 𝐁𝐨𝐨𝐦 -Obesity-focused biotechs saw a 550% YoY funding jump in 2024, driven by clinical successes like Novo Nordisk’s Wegovy and Lilly’s Zepbound ✅Metsera: Raised 290M (SeriesA)and 215M (Series B) in 2024 for next-gen GLP-1 agonists, achieving 11% weight loss in Phase II trials ✅BioAge Labs: Closed a $170M Series D (2024) to test azelaprag (apelin agonist) combined with Zepbound for obesity 4️⃣ 𝐂𝐞𝐥𝐥 𝐚𝐧𝐝 𝐆𝐞𝐧𝐞 𝐓𝐡𝐞𝐫𝐚𝐩𝐲 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 𝐀𝐭𝐭𝐫𝐚𝐜𝐭𝐬 𝐋𝐚𝐭𝐞-𝐒𝐭𝐚𝐠𝐞 𝐅𝐮𝐧𝐝𝐢𝐧𝐠 CAR-T and allogeneic therapies drew $3B+ in VC funding in 2022, with later-stage rounds dominating in 2024 ✅ArsenalBio: Raised $325M in Series C (2024) for solid tumor CAR-T therapies ✅Obsidian Therapeutics: Secured $325M (2024) for controlled gene expression in cancer therapies 5️⃣ 𝐂𝐡𝐢𝐧𝐚’𝐬 𝐑𝐢𝐬𝐢𝐧𝐠 𝐁𝐢𝐨𝐭𝐞𝐜𝐡 𝐄𝐜𝐨𝐬𝐲𝐬𝐭𝐞𝐦 Chinese biotechs averaged $299M per company in 2023, triple the U.S. average, driven by gene editing & ADC innovation ✅Sinovent: Raised $242M in Series E (2024) for oncology and immunology therapies ✅Jixing Pharmaceuticals: Closed $162M Series D (2024) for cardiovascular drugs, with Bayer & RTW Investments participating 6️⃣ 𝐋𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩-𝐃𝐫𝐢𝐯𝐞𝐧 𝐒𝐲𝐧𝐝𝐢𝐜𝐚𝐭𝐞𝐬 𝐚𝐧𝐝 𝐏𝐡𝐚𝐫𝐦𝐚 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬 Companies with ex-Big Pharma executives secured 60% of 2024’s top rounds -Pharma venture arms (e.g., Sanofi, Lilly) co-led deals ✅Candid Therapeutics: Merged three entities to raise $370M Series A (2024) for autoimmune TCE antibodies, led by RayzeBio’s ex-CEO Intelligience Opinion - Investors are now focusing on preclinical/early stage assets as it provides more room to creatively "hone" innovation minus integration challenges. Oncology & Obesity "may appear" to be the safest investment bet but auto-immune may lead the way in 2025! Source: HSBC