Biotech ecosystem contributors!
In our previous post, we discussed the importance of local investors and how, in a Danish context, they contribute to identifying and scaling local and regional therapeutic innovation. However, not all investors are born equal – and an examination of individual investors can be highly revealing.
The figure below presents an analysis of investor participation in the financing rounds of Danish biotech companies having received more than EUR 5 million from 2010 and onward and rank according to number of participation in financings. Each dot represents an investor’s participation, with the Y-axis indicating the size of the round in which they participated. While investor participation has evolved over time and the analysis may not capture every financing in the sector, the overall trends are nonetheless striking.
Novo Holdings has played a formative role in shaping the Danish biotech ecosystem into what it is today. When combined with the Lundbeckfonden / Lundbeck Foundation, one could reasonably argue that without the financing provided by these two foundations, the region might not be recognized as a true biotech cluster.
This observation is worth reflecting on – ultimately both investors are structures created through tax incentives, and in other words, tax incentives can effectively channel capital into venture investment. Policymakers should take note.
The Danish sovereign investment fund, EIFO, ranks third, which comes as no surprise given its mandate to close financing gaps. Sunstone is proud to rank fourth on the list, and we would like to express our appreciation to the significant contributions of our venture community colleagues at RA Capital Management (US), Ysios Capital (Spain), Inkef (Netherlands), Eir Ventures (Sweden) and HBM Healthcare Investments AG(Switzerland) for recognizing and investing in the region’s innovation potential, each with 5 or more investments.
Yet, despite these investments, there is still a funding gap. This raises an important question: why does this remarkable biotech ecosystem not attract even more investments from the local community?
EIFO actively supports GPs with an interest in investing in Denmark. For those not already backed by EIFO, the most active investors on the figure certainly have our vote.
How do we grow a larger group of local investors?