Merlin Biosciences & Vaekstfonden partner

Merlin Biosciences, which is raising its third fund due to close at the end of this month, is to form a strategic partnership with Vaeskstfonden, the largest venture capital provider in Denmark to enable both groups to pursue biotech investing opportunities in Denmark. Vaekstfonden’s fund-of-funds has also committed to Merlin Biosciences III, the target of which is undisclosed to date.

This is the first time Vaekstfonden, which invests in venture funds and also makes direct investments, has invested in a VC fund outside Denmark. Vaekstfonden’s partnership with Merlin goes beyond their commitment to the fund. The group will help source deals for Merlin in Denmark as part of the collaboration. It also sees the opportunity as a catalyst to internationalise Danish biotech and will benefit from Merlin’s successful track record in guiding the development of start-up companies from seed investment to market listing. The group also has a capacity for co-investment with Merlin which is an added boost for the fund says chief executive Mark Clement.

“The Danish biotech industry has grown rapidly in recent years thanks to significant investment by local VCs such as Vaekstfonden, in the world class science and technology emerging from start-up companies. Denmark has a long history in life sciences and is a market Merlin has been watching for some time. We fell that Vaekstfonden is the ideal partner to help us identify the right opportunities and drive the investment process forward.”

Merlin now has partners both in Finland and Denmark. Last year the firm opened an office in Helsinki, its first office outside the UK. Merlin has been raising its profile in the Finnish market for a while. In early 2003 Finnish Industry Investment (FII), a government sponsored initiative became a partner in one of Merlin’s funds. The firm is also receptive to opportunities in Sweden as it is regarded as the more mature venture market in the region, but has no imminent plans to set up a partnership there as yet, says Clement.

Merlin recently celebrated the flotation of Ark Therapeutics on the London Stock Exchange – see exit news. Clement sees this as boost for the firm and prospects for its portfolio companies. “We are very well positioned at the moment to benefit from the opening of the markets in London and the rest of Europe.”