San Francisco-based Sofinnova Ventures, the fully independent counterpart of its former French parent, Sofinnova Partners, has launched its sixth fund, a year on from the final close of its last fund. Sofinnova Venture Partners VI is aiming towards a target of $250 million with a final close scheduled for mid-year.
Managing director Alain Azan is confident about fund raising with both old and new investors eager to participate in the round. He said: “We are particularly attractive to European investors because we offer exposure to California and some of these European players find it difficult to penetrate the US market.”
A third of investors from the previous fund were French and included participants such as AXA, AGF, CNP, France Telecom-Innovacom, Aerospatiale Matra and Bouygues. A further third came from other European markets and included Private Equity Holding, Vencap, VCM and GIMV and the remaining third are US investors. This time, says Azan, there will probably be a greater participation from US investors, but there has also been strong interest from Germany and Switzerland.
The investment strategy for the new fund will be the same as the previous funds with a focus on infrastructure for Internet and telecommunications, digital media and product-oriented life sciences. The majority of investments (85 per cent) will be focused on the US, with the remaining 15 per cent invested in Europe.
The fifth fund is almost fully invested in 22 companies and should be fully committed by the time the new fund closes. Azan says: “Our position in California and our French background stands us in good stead. There are not many US VCs that have a good understanding of the European market.”
Eric Buatois, principal, adds Sofinnova is a firm believer that a mid-sized fund, rather than a mega-fund, is the best option if you want to give a good return to your shareholders. Over the past five years the firm has returned around $460 million to its shareholders. James Healey, managing director, adds: “Our goal is to create a diversified early stage mid-size top-performing fund with a French twist.”