In its seventh year, the Novartis Venture Fund further strengthened its role as a long-term investor in promising start-up companies despite a difficult environment for venture businesses.
According to its 2003 activity report, the fund focused mainly on supporting companies already in its portfolio by providing additional funding for 25 firms. The fund also provided support for eight new companies, expanding its portfolio to a total of 74 businesses. The fund committed USD 35 million in new financing last year to bring its total investment to USD 215 million since 1996. These critical investments have helped support the creation of 127 start-up companies.
"The Novartis Venture Fund sees its social responsibility in having a long term-perspective on our investments and providing creative solutions, such as follow-up rounds and bridge financing, to help promising companies when justified," said Dr François L'Eplattenier, chairman of the Board of the Novartis Venture Fund.
The Novartis Venture Fund is founded on the conviction that economic growth and the creation of new jobs can be achieved in the long run only if new entrepreneurial initiatives develop and promising ideas become a business reality. With venture capital of USD 220 million, the fund supports new business projects that show exemplary entrepreneurial and innovative spirit in future-oriented areas, especially in the field of health sciences.
This is a specific niche where in the past year the fund could make a vital difference for those portfolio companies that needed follow-on, private equity investments due to diminished IPO opportunities in the current economic environment.
"The activities of the Venture Fund have helped to stimulate and sustain a number of entrepreneurial start-ups," said Daniel Vasella, chairman and CEO, Novartis AG. "Companies in the Venture Fund's portfolio are reaching major milestones and successfully completing sizable financing rounds."
The activities of the fund go beyond financial investments: its experienced management team is actively advising start-up companies and providing help to find additional investors and facilitate collaborations and strategic alliances.
In addition to investments in US companies, the fund plays an important role in supporting start-up companies in the BioValley area around Basel, Switzerland. Over the last seven years, the fund has invested more than CHF 50 million in 42 new companies in the BioValley area, which in turn created a total of about 700 jobs and a turnover of CHF 90 million annually.