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Venture fundraising in the healthcare and life sciences sector has faced hurdles in recent years, with even established firms feeling the strain.
Among those firms is Foresite Capital, boasting an impressive portfolio with 47 IPOs, 28 M&As, and 58 FDA-approved drugs. Despite this track record, the San Francisco-based multi-stage investment firm, founded 13 years ago, encountered a two-year journey to raise its sixth fund.
Jim Tananbaum, Foresite’s CEO, acknowledged the challenge: “Almost all of our LPs in fund five renewed in fund six. They just renewed with 30% less capital. We had a bit of a hole to plug.”
To bridge this gap, Foresite brought in Hadi Tabbaa, formerly with B Capital and Coatue Management, to lead the firm’s investment relations efforts. Tabbaa's efforts paid off, attracting new LPs, including family offices from Asia and the Middle East, and culminating in the successful closure of the sixth fund with $900 million.
Despite the fundraising process, Foresite remained active, backing several notable companies. In April, Foresite Labs and ARCH Venture Partners jointly invested $1 billion to incubate Xaira, an AI drug discovery startup. Additionally, the firm participated in the $135 million Series A of Latigo Bio, focusing on non-opioid pain treatment, and co-led a $115 million Series F into CG Oncology, which went public in January.
Looking ahead, Foresite plans to support approximately 20 companies from its sixth fund, with investment checks ranging from a few million dollars to $75 million. Tananbaum emphasized the firm's continued focus on genomics and artificial intelligence in healthcare.
Despite industry challenges, Foresite Capital's successful fundraising and ongoing investment activities underscore its commitment to driving innovation in healthcare and life sciences.
