Skyline Hits $150M Peak

Enamored with what it calls the “ongoing revolution” in the drug discovery arena, early-stage venture capital firm Skyline Ventures recently put the finishing touches on the third and largest health care-focused investment vehicle in its family of funds.

The firm closed on approximately 90% of the capital in August, then wrapped up its fund-raising efforts in October, said John Freund, a founder and managing partner with Skyline.

Monikered simply Skyline Ventures III, the fund hit its original $150 million target, garnering commitments from 15 institutional limited partners, eight of which are first-time Skyline investors. All seven of the firm’s existing LPs also re-upped for Fund III. Skyline has not disclosed the names of any of its investors, however.

Skyline III’s strategy will not stray from the beaten path of its predecessors, as it will continue to focus on early-stage health-care and life sciences plays, with a particular emphasis on biotechnology, medical devices and biopharmaceuticals.

Additionally, the fund will pump a total of $10 million to $12 million into each of its portfolio companies over the life of the investment. Fund III is expected to invest in about 12 firms over the next three years, Freund said.

To date, Skyline III has made just one investment. In October, the firm participated in a $17 million Series B financing for TolerX Inc., a biopharmaceutical company that specializes in the discovery and development of therapies that induce and maintain immunological tolerance. HealthCare Ventures led the round, investing alongside Rho Ventures and Vertex Management.

Freund, who brings to the table 19 years of experience in health care finance and management, will manage the fund, along with Yasunori Kaneko and Stephen Sullivan. Kaneko has more than 20 years of operating experience in the life sciences field, and Sullivan was most recently founder and senior executive with Healthvision, which delivers Web-based software to hospitals and physicians.

Founded in 1997, Skyline was last in the fund-raising arena in 1999, when it closed on $75 million for Skyline II. Its debut fund, the $23 million Skyline I, closed in October 1997. The firm also has a side fund, called the Skyline Expansion Fund, which exists to pump follow-on capital into the portfolio companies of all three of its investment vehicles.

Currently, Skyline has about 20 portfolio companies and $250 million in capital under management.

Robyn Kurdek can be contacted