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European VC fundraising is on track to surpass last year’s total, boosted by life sciences investor Sofinnova Partners’ close of one of Europe’s largest early-stage healthcare funds.
The Paris-based firm collected €472 million (about $549 million) for its 10th flagship fund, Sofinnova Capital X, dedicated to investments in biopharmaceutical and medical device startups. This marks Sofinnova’s third fund close this year, having raised €445 million for a scale-up fund in March, followed by its €63 million medtech accelerator vehicle in June.
European VC funds pulled in a total of €15.3 billion in the first three quarters of 2021 and are on track to reach €20 billion by the end of the year, according to PitchBook data. The annual fund count, on the other hand, is poised for its lowest level since 2013, with only 128 closed by Sept. 30—down more than 50% compared to 2020’s total of 261 through Q3.
The trend is in part driven by LPs’ ongoing preference, stemming from the pandemic, for more established GPs, which has caused larger vehicles to swell in size and driven down the fund count. One of Europe’s major VC firms, London-based Index Ventures, closed three new funds in July, totaling a whopping $3.1 billion and targeting startups across all stages.
Pandemic-driven growth for sectors including life sciences has boosted fundraising activity in Europe, as GPs and LPs alike look to mitigate the impacts of future healthcare crises. Along with Sofinnova’s new vehicle, Abingworth Management’s $582 million capital pool and Jeito Capital’s €534 million vehicle are two other examples of large-scale life sciences funds to close this year.
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