Earlybird Health closes second fund twice as large and will write larger checks

German company Earlybird Health has announced the final closing of its second fund of 173 million euros (approximately $185 million). It’s more than twice the size of Up earlythe country’s first health fund, Health I, which reached 85 million euros at final closing.

Although the two funds are similar in terms of thesis and stage of investment, this will allow Earlybird Health to write larger checks. Since it plans to invest primarily in Europe, including the UK, this could be good news for the region’s health tech startups, many of which are short of money after the fall of telehealth company Babylon.

However, health and improved patient outcomes are about more than digitalization; Earlybird Health’s business encompasses medical devices, diagnostic solutions, R&D tools and biopharmaceuticals. The latter has already resulted in an IPO of Earlybird Health’s first fund when eye care company Oculis became public on the NASDAQ in March 2023.

Earlybird Health’s existing portfolio also includes Priotherawhose co-founder Florent Gros joined the fund as a partner in 2022.

Another newcomer to the world of Earlybird Health is sponsor British Patient Capital, a subsidiary of the publicly-owned British Business Bank. It joins a lineup of LPs that also includes BARMER, one of the largest public health insurance providers in Germany. According to Earlybird Health, it was the first of these insurers to invest in a venture capital fund when it backed Health I.

“Having health insurers as lead investors allows us to understand and address key patient needs in supporting innovative healthcare,” said Thom Rasche, Partner at Earlybird Health.

For portfolio companies, this type of LP also opens the door to “insight into the most promising commercialization angles and potential direct approval,” Rasche said, citing the collaboration between BARMER and iSTAR Medical portfolio companies, Noscendo and Wellabe.

Although Earlybird Health has its own team of 10, it also has access to Eagle Eye, an internal AI tool shared by Earlybird and its other independently managed funds. From discovering companies in stealth mode to other opportunities, Christoph Massner, director of Earlybird Health, expects this to help the fund’s deal sourcing and due diligence process be more efficient and more effective. inclusive.

Inclusion is one of the ESG goals that Earlybird Health is committed to, as detailed in its inaugural report Impact and ESG report 2022. As a fund falling under Article 8 of the European Sustainable Finance Disclosure Regulation (SFDR), it considers these efforts an “essential part” of its daily activities, “whether “investment or general operations”, declared his partner Lionel Carnot. Ahead of the release of the fund’s 2023 report, it revealed that two portfolio companies have also “developed and implemented an ESG strategy in 2023” through its efforts.