Earlier this month, the British Business Bank made a £75 million ($101 million) commitment to Molten Ventures’ new Growth Fund. The funding is intended to help the venture capitalist (VC) firm reach its £350 million ($473 million) target to back UK and European technology companies at Series B and beyond.
“It underlines the importance of bringing more long-term institutional capital into venture and growth, so that ambitious UK and European technology companies have the backing they need to scale,” Ben Wilkinson, CEO of Molten Ventures, said in a statement.
Funding at this stage addresses the critical “valley of death” in biopharma development, where promising therapies between Series B and commercialization often fail due to insufficient capital.
Because of this, corporate venture capital (CVC) arms have started to play a more significant role. As Ester Sklarsky, principal at Sound Ventures, said during a panel discussion at Nordic Life Science Days in Stockholm, Sweden, “having a corporate investor on your list of owners is no longer unusual.”
“About 70% of biopharma companies that have gone public in the US since 2022 had a corporate investor on their cap table,” Sklarsky told the audience. “60% of the companies acquired by pharma had a corporate investor, so it’s no longer a rarity.”
The panel’s message was that CVCs get lumped together far too easily. For Emma Johnson, senior principal at M Ventures, VC is best understood as a complementary strategy sitting alongside a corporate’s other functions.
“Venture serves as another pillar of external innovation for a corporate. It’s a window into the innovation happening outside their own organization, looking for both complementary and potentially disruptive or threatening technologies that they need to be aware of for their own planning. So, venture is a complementary strategy to everything else going on in the corporate world,” she said.
However, not every CVC works the same way.
Jacob Lange Moresco, vice president of business development and partnerships at Gubra, described a model built around avoiding syndicates altogether. According to him, Gubra is built on the basis that its edge lies in drug discovery and development rather than dealmaking.
“We’ve done about 15 deals so far, so we have the machine internally to do this. What we’re looking for in a partner is complementary skills and biology – science where, together, we can develop things further. We think we have so much to offer beyond finance. That’s why we decided we’re not just going to make financial investments,” Moresco told the audience.
Money can’t buy happiness
Every company, Johnson argued, should be asking for more than capital from its investors.
“A pharma CVC that’s relevant to your company can bring insight into what it takes to transact later down the line, and access to networks. That’s something every CVC should be bringing.”
Nadiya Ishnazarova, senior director at Johnson & Johnson’s venture arm, emphasized this point. She explained how having one or more pharma partners at the table, she said, gives a company access to knowledge and experience that is otherwise hard to buy.
“You can get support when questions come up about CMC strategy or the IND-enabling package, or regulatory questions. And as the company progresses toward a more commercial profile, pharma can contribute enormously because of the expertise and experience we have internally, for example, running a trial in China. So, that knowledge, experience, and appetite for risk is valuable.”
The risk appetite is another reason why CVCs have become more prominent within the biopharma industry. When traditional funds have pulled back on new commitments in recent years, corporates with capital kept writing cheques.
“CVCs became the saviors,” Ishnazarova said, arguing that corporates are structurally better placed to underwrite scientific risk.
“Since we have permanent capital on the balance sheet, evergreen structures, and we’re prepared to take on risk if we’re genuinely excited about the biology and mechanism,” she said. “We’re willing to pay for that risk if we believe it’s truly breakthrough innovation.”
