Endeavour Vision closes Medtech Growth II on $375m

A team from law firm Carey Olsen, led by partner David Crosland with assistance from senior associate Alex Mauger, advised on the fundraise. Clifford Chance provided further legal advice.

The fund will follow the strategy of its predecessor, investing in growth-stage medical technology and digital health companies that aim to advance the standard of care and make healthcare systems more efficient.

EMG I held a final close in March 2016 on €250m, exceeding its target of €150m. The fund invested €10-20m per deal, although its successor can deploy larger tickets.

Asked about the timeline for the fundraise, Bernard Vogel, co-founder and managing partner at Endeavour, told Unquote: "We started fundraising in late 2019, but when the crisis came, we put that on hold for about six to eight months. Since we had already held a first close in September 2019, we were able to make a number of investments while fundraising was paused, with the first deal in February 2020."

"Covid slowed down the process, and it was challenging with institutional investors who did not know us already. Travel restrictions made it difficult for some of them to do their normal due diligence," said Vogel. "But, on the other hand, the whole view of the sector changed in the period: medtech and healthcare technology is centre stage right now and the crisis is changing the perspective on the sector. The crisis was a wake-up call for many, and many people would like to learn more about the sector."

The medtech sector is growing as the companies operating in the sector develop further, Vogel said. "The market is getting busy. I have not seen many new players, but many of these companies now require more money, so the whole market is accelerating, especially in the US – it is a bit slower in Europe."

Endeavour has a 12-person investment team and has offices in Geneva and Minneapolis.

Investors
The fund is backed by pension funds, funds-of-funds, family offices and high-net-worth individuals. "Of the commitments, 60% are from previous investors, and 40% from new investors," Vogel told Unquote. "The LPs are essentially from Europe, mainly the UK and Switzerland, and about 50% are pension funds."

According to Unquote Data, LPs in the GP's predecessor fund include Suntrust Investment, as well as UK pension funds Lancashire County Council Pension Fund and South Yorkshire Pensions Authority.

Investments
The fund had made seven investments by the end of Q1 2021, the majority of which are based in the US. The GP also participated in Switzerland-based CeQur's $115m funding round earlier in April 2021.

"We will deploy in three years, with about five investments per year – we invested $100m last year," Vogel told Unquote. The fund can deploy larger equity tickets than its predecessor, given its increased size, and aims to invest $20-30m per deal across 15 companies.

"We like to take the lead and have at least one board seat," said Vogel. "What is important for us is that we are there to support the early stage of commercial developments, so we target companies that are post-FDA-approval and have early revenues. We will take a commercial risk, but not a technical or clinical one."

Of the firm's geographical focus, Vogel said: "It is important for us to invest in Europe and the US, but we are essentially geographically agnostic – we want the best companies and technology, wherever they are. Healthcare is an integrated and global industry; we have seen this with the vaccine and global innovations. We can help companies to cross the Atlantic, wherever they are based."

The fund will invest across a broad range of medtech and healthcare technology sub-sectors, Vogel said. "We focus on areas that show the highest growth. We will back companies that are changing the standard of care and also reducing costs for healthcare systems, with different therapies and approaches."

The GP said in a statement that the sectors in which it invests will continue to see growth due to demographic trends such as ageing populations and chronic diseases, as well as pressures on healthcare budgets.

People
Endeavour Vision – Bernard Vogel (co-founder, managing partner); Damien Tappy (president, managing partner); Nicholas Hinchliffe (investment director, private equity investments, local pensions partnership investments).

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