Friday Letter: How bioengineering is spreading among firms

In recent years, several venture firms, including CRV, have increased their focus on the bio sector. Here's why we're seeing it grow.

In mid-July, I wrote about how Mayfield added bio specialist Arvind Gupta to its partnership as the firm looks to ramp up its bioengineering practice.

The intersection of biology and tech for venture investors is nothing new. As I pointed out in the story, CRV and Menlo Ventures have in recent years stepped up their bio practices. As was pointed out to me, I left out a few few firms in citing examples. That was unintentional, but of course, Andreessen Horowitz launched its bio fund in late 2015 and raised $750 million for its third bio fund earlier this year.

DCVC, whose partnership includes two investors formerly from Monsanto Growth Ventures, is currently in registration for its second bio fund. Lux Capital and 8VC, among others, is also jumping into tech deals that look a lot more like biotech.

I spoke this past week with CRV general partner Dylan Morris, who joined the firm in 2017 to help build the early-stage firm’s bioengineering practice, which is led by George Zachary, who was previously focused on consumer-facing deals. Among CRV’s deals are Wild Type, a cellular agtech company; System1 Biosciences, which focuses on neurological disorders; and Dyno Therapeutics, which uses AI to reshape gene therapy.

Morris noted, as we all are well aware, that overall venture activity paused in March and April when the covid-19 pandemic escalated. But he said he’s seeing activity pick up. And we also talked of how biotech IPOs have not slowed at all.

“Bioengineering and biotech is front and center right now, in part because of the public’s interest in infectious diseases,” said Morris, who believes that society is about to go through a renaissance of understanding in relation to biotech combined with engineering.

“Right now, we are in this place of a basic understanding of biology,” he said. “And we’re seeing a lot of new insights, data and analysis that is uniting computer science and life sciences.”

Morris talked about the company Dyno Therapuetics, which has only raised a seed round from investors, including CRV and Polaris Partners. “Just wait until the company makes significant progress.”

Currently, our reporter Marina Temkin is delving into investor interest in bio and how it’s gotten a lift from the IPO market and the pandemic. If you have thoughts to share, please reach out to her at mtemkin@buyoutsinsider.com.

In the meantime, let me know what you think. If you’re focused on the bio sector or thinking about it, we would love to hear from you. You can reach me at agoldfisher@buyoutsinsider.com and I’m open to voice and video calls.