Venture capitalists interested in biotech have been able to raise money with unprecedented ease over the past several years. Polaris Partners, 5AM Ventures, Third Rock Ventures, Versant and venBio are just some of the firms to have secured hundreds of millions — if not billions — of dollars in fresh funding since 2018.
The money has come, in part, because investors see clear paths to returns. The two main ways venture firms cash out on their portfolio companies are through buyouts and initial public offerings, both of which recently hit historic highs. In 2019, biopharma mergers and acquisitions totaled almost $360 billion, according to EY. And in 2020, there were more than 70 biotech IPOs of $50 million or more, according to data compiled by BioPharma Dive.