Panakes to launch €120m second fund within months

Alessia Argentieri
27 August 2020

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Italian venture capital house Panakes Partners, which is dedicated to investments in the medical technology industry, will launch a second fund with a тЌ120m target in the coming months, Unquote understands.

The VC expects to start raising capital by the end of the year and hold a first close in H1 2021.

"With the Covid-19 outbreak and the spread of the virus, interest towards diagnostics, biotech and medtech has substantially increased," Panakes founder and managing partner Alessio Beverina told Unquote. "We expect that in the coming months not only private investors, but also state-backed funds and public institutions will allocate larger pools of capital to finance the expansion of this sector and support the development of innovative technologies across the healthcare industry."

Panakes Fund II will be slightly larger than its predecessor, which closed on €100m in 2018. The fund is currently invested in seven Italian businesses and five companies based in the rest of Europe (France, Switzerland, the Netherlands, Ireland and the UK).

The vehicle has recently invested in a €20m series-B round for InnovHeart, an Italian developer of heart valve replacement systems. Unquote understands that the fund is also taking part in a large round for a medical technology company based in northern Europe. In addition, the vehicle plans to make two more deals before ending its investment period.

"The pandemic caused severe slowdowns in medical trials for many life science and biotech companies, and impacted revenue generation of some medtech businesses, which were unable to sell their products during the emergency," said Beverina. "However, we were able to continue our activity at our usual pace and proceed with the negotiations that we had started at the beginning of the year."

Panakes Fund II will target companies based in Italy, where the VC expects to deploy around 60% of the capital, but also in the rest of Europe and Israel, and will invest as lead or co-lead investor.

It will deploy equity tickets of around €6m to finance the expansion of companies operating in the medtech segment, while selecting some deals in the biotech space. Its main areas of interest will be diagnostics, medical devices, surgical equipment and medical robotics.

The fund's LP base will be similar to Panakes Fund I's base, which was composed of 40% public institutional investors, such as the European Investment Fund and Fondo Italiano d'Investimento; 30% Italian pension funds and banking foundations; and 30% Italian family offices and corporate VCs, including pharma company Menarini and biotech company Rottapharm, which is controlled by the Rovati family.

Beverina said: "We plan to increase the number of international investors in our new fund, but we expect public and private LPs from Italy to remain our core base."