Flagship Ventures is changing its name and unveiling a new $285 million side fund that will pump more money into the firm’s portfolio companies when they are ready to rapidly grow.
The follow-on fund from the newly christened Flagship Pioneering will seek investment opportunities characterized by an “explosive platform with many different applications,” says Noubar Afeyan, CEO of the Cambridge, MA-based venture capital firm.
“There are always a select few cases where both the requirements and the impact of the additional investment, in our view, could be significant,” Afeyan says. “We’re now in a position to play in those [growth] phases, where early-stage folks typically aren’t.”
A mix of current investors and new ones contributed to what Flagship calls its “special opportunities” fund. The follow-on fund will invest alongside the firm’s fifth fund, which closed at $537 million last year and eventually topped out at $585 million, making it the largest fund in the firm’s history. Flagship says that its family of funds has more than $1.7 billion under management.
Flagship is also changing its name for the second time since it started in 1999 as NewcoGen, shorthand for New Company Generation. The company took the Flagship Ventures name in 2002 to reflect the addition of a venture investing component. But the Flagship Ventures name placed too much emphasis on the firm’s financial resources, Afeyan says. The firm helps build companies, too.
The word “pioneering” reflects the innovative, first-in-category companies the firm seeks, Afeyan explains. Flagship’s portfolio companies include Moderna Therapeutics, a Cambridge biotech that is developing protein therapies based on messenger RNA. Another is Editas Medicine (NASDAQ: [[ticker:EDIT]]), also based in Cambridge, which is pursuing new treatments for genetic diseases using the CRISPR gene-editing system.
Photo courtesy of Flickr user Alberto …. via a Creative Commons license.
