Earlybird Well being closes twice-larger second fund, will write greater checks

Germany-based Earlybird Well being introduced the ultimate closing of its second fund of €173 million (round $185 million). That is greater than twice the dimensions of Earlybird‘s first healthcare-focused fund, Well being I, which reached €85 million at closing closing.

Whereas each funds are comparable in funding thesis and stage, this may allow Earlybird Well being to jot down bigger checks. Because it plans to predominantly spend money on Europe, together with the U.Okay., this may very well be excellent news for healthtech startups within the area, lots of that are running out of cash after the fall of telehealth company Babylon.

Nonetheless, there’s much more to well being and higher affected person outcomes than digitalization; Earlybird Well being’s focus encompasses medical gadgets, diagnostics options, R&D instruments and biopharma. The latter already resulted in an IPO for Earlybird Well being’s first fund when eye care firm Oculis went public on NASDAQ in March 2023.

Earlybird Well being’s present portfolio additionally includes Priothera, whose co-founder Florent Gros joined the fund as a companion in 2022.

One other newcomer in Earlybird Well being’s world is restricted companion British Affected person Capital, a subsidiary of state-owned British Enterprise Financial institution. It joins a variety of LPs that additionally consists of BARMER, one in all Germany’s largest public medical insurance suppliers. Based on Earlybird Well being, it was the primary of such insurers to spend money on a VC fund when it backed Well being I.

“Having health insurers as cornerstone investors enables us to understand and address key patient needs by supporting innovative healthcare,” stated Thom Rasche, a companion at Earlybird Well being.

For portfolio corporations, such a LPs additionally opens the door to “insights into the most promising angles for commercialization and potential direct endorsement,” Rasche stated, citing the collaboration between BARMER and portfolio corporations iSTAR Medical, Noscendo and Wellabe.

Whereas Earlybird Well being has its personal staff of 10 individuals, it additionally has entry to Eagle Eye, an in-house AI device shared throughout Earlybird and its different independently managed funds. From uncovering stealth mode corporations to different alternatives, Earlybird Well being principal Christoph Massner expects it should assist the fund’s deal sourcing and due diligence course of be extra environment friendly and extra inclusive.

Inclusion is a part of the ESG targets that Earlybird Well being dedicated to, as detailed in its inaugural 2022 impact and ESG report. As an article 8 fund beneath the EU’s Sustainable Finance Disclosure Regulation (SFDR), it sees these efforts as a “core part” of its each day actions, “whether investing or general operations,” companion Lionel Carnot stated. Forward of the discharge of the fund’s 2023 report, he disclosed that two portfolio corporations additionally “developed and implemented an ESG strategy in 2023” because of its push.