Menlo Park, CA based venture capital firm Andreessen Horowitz is launching a new $200 million fund focused on funding companies software companies in the bio space led by Vijay Pande, the firm’s first professor in residence from Stanford University, where he was a professor of chemistry, computer science, and structural biology.
The new software-focused bio fund will focus on investments in three emerging areas:
1. Digital health & therapeutics – digital therapeutics for chronic disease, minimize FDA risk, consumer genomics, new model for insurance companies
2. Cloud biology – biology that works like programming: cloud experiments run through software
3. Computational medicine – personalized cancer treatment based on patient tumor genetic screenings
The Bio fund plans to invest in 1 Series A company and 2-3 seed companies quarterly such as Omada Health, a digital health startup backed by Andreesen’s main fund focused on digital therapeutics.
Why A Bio Fund?
In an interview, Vijay Pande shared the reasons behind the new fund:
“There’s a couple different ways I think about this. One is that we all care about human health — whether it’s for ourselves, our parents, our children — and it’s a big deal on a very deep, fundamental level, in terms of thinking about the meaning of life. At a much more mundane business level, there’s clearly a huge market opportunity here. Just think of the marketing budget that Google can go after (with ads and such) — $200 billion. But compared to that, the U.S. healthcare budget is $2 trillion! Even tiny little sub-budgets of that are huge markets for startups to go after.
Bio is therefore an area where there’s a real chance to change the world … but also a chance for really great financial returns as well. The firm has been excited about this space for a while, and we’ve made investments before even raising a bio fund. But we want to do something really big, and expect this to grow bigger in time, so establishing a separate fund is also about our thinking years down the road.”
Pande, a startup veteran co-founded Globavir BioSciences and was an early developer at a video game company that was sold to Sony.