Global venture capital firm closes 9th fund to fuel investment in global healthcare and technology pioneers, bringing total capital under management to $3.5B
Canaan Partners, a multi-billion dollar, global venture capital firm, announced today the closing of a $600 million fund, Canaan IX. The new fund brings total capital under management to $3.5 billion and will enable the firm to continue backing visionary entrepreneurs who are building disruptive global companies in the technology and healthcare sectors. Canaan received strong demand for the new fund from its existing limited partner base, as well as select new limited partners.
“We are pleased to have earned the tremendous support of our limited partners,” said Brent Ahrens, general partner at Canaan Partners. “The successful raising of Canaan IX is a tribute to the quality of our team and portfolio companies, as well as the exits that we have realized.”
Consistent with prior funds, Canaan IX will build on the firm’s diversified global investment strategy and its commitment to invest in startups that are the engines of innovation. Canaan’s one-fund approach to venture investing will allocate approximately two-thirds of Canaan IX to technology investments in digital media, consumer internet, enterprise, mobile and communications companies in the U.S., India and Israel. One-third of the fund is designated to healthcare investments in biopharmaceutical, medical device and healthcare infrastructure companies.
Heading into its 25th anniversary year, Canaan Partners is driving returns from both the technology and healthcare practices. Since 2009, the firm has delivered strong liquidity, including Advanced BioHealing, which was acquired by Shire for $750M in 2011; Active Network (NYSE: ACTV), which raised $165M in a successful IPO in 2011; Associated Content, the leading content syndication platform, acquired by Yahoo! in 2010; BiPar Sciences, pioneer of a new class of oncology drugs, acquired by Sanofi for $500M in 2009; and Calixa Therapeutics, developer of novel antibiotics, acquired by Cubist for $400M in 2009. Most recently, SandForce, the leading provider of flash storage and SSD processors for enterprise, was acquired by LSI for $370M in January 2012.
With Canaan IX, Canaan will continue its leadership role as an active technology investor. Representative seed and early-stage investments include KABAM, Lending Club, Cardlytics and Zoosk. In order to take advantage of the robust entrepreneurial expansion occurring in New York in financial technology, digital media and e-commerce, Canaan opened a Manhattan office in 2010. Notable portfolio investments in NYC include OpenSky and Tremor Video.
“We’ve had the privilege of working with outstanding entrepreneurs – often over a long haul because it takes time to build a valuable company, and it’s rarely a straight line to get there,” said John Balen, general partner at Canaan Partners. “With our recent string of exits, we are seeing the hard work of the past several years pay off in returns for our limited partners and entrepreneurs. We are proud of the top-tier management teams with whom we have partnered.”
Recognizing that emerging global markets and entrepreneurship are not limited to the U.S., Canaan also has on-the-ground teams in India and Israel. Current international technology investments include BharatMatrimony, Naaptol and UnitedLex in India, and PrimeSense, LiveU and N-trig in Israel.
In addition to recent wins, the technology team has generated profitable exits from early investments in companies such as SuccessFactors (NYSE: SFSF), Acme Packet (NASDAQ: APKT), Webloyalty (acquired by General Atlantic) and IntraLinks (acquired by TA Associates).
In Canaan IX, the healthcare team will continue to invest in clinical assets that can fill pharma’s pipeline as well as medical devices and healthcare infrastructure technologies that revolutionize the practice of medicine in a cost-effective manner. Healthcare investments include companies with highly innovative platforms such as Liquidia Technologies and Theraclone Sciences; drugs with fast access into the clinic such as Elevation Pharmaceuticals and Civitas Therapeutics; and infrastructure plays such as DICOM Grid, which makes medical imaging universally accessible.
“Healthcare companies face significant odds as they advance a promising technology towards FDA and clinical milestones crucial to a valuable exit,” said Wende Hutton, general partner at Canaan Partners. “We tailor our healthcare investments to reduce risk, yet also foster innovation. It’s a challenging balance, but our success demonstrates that our approach works.”
In addition to recent wins, the healthcare team enjoys consistent success in companies developing anti-infectives and those with rapid clinical development programs. Since 2000, only seven new antibiotics have been approved; of those, two were developed and commercialized by Canaan-backed companies – Cerexa Pharmaceuticals (acquired by Forest Labs, 2006) and Peninsula Pharmaceuticals (acquired by Johnson & Johnson, 2005).
Sized to Win
Sized to execute on a diversified, global strategy, Canaan’s investment approach provides a superior view of emerging technologies from various geographic regions and sectors and empowers the firm to choose the very best technologies and teams from around the world. General partners in Canaan IX are Brent Ahrens, John Balen, Stephen Bloch, MD, Wende Hutton, Maha Ibrahim, Deepak Kamra, Warren Lee, Guy Russo and Izhar Shay; in addition, the fund is advised by Alok Mittal, Managing Director of Canaan India.