It was March 2020—right before the pandemic exploded—when AmerisourceBergen’s executive team first pitched the idea to the healthcare solution company’s board of directors.
Their sell: It was time for AmerisourceBergen to take a more hands-on approach to working with entrepreneurs and pharmaceutical testing. The company, which is one of the top pharmaceutical distributors in the world and posted nearly $214 billion in revenue in the year ending in Sep. 2021, had previously made an occasional investment here and there. Now it wanted to parse through hundreds of investment opportunities a year and develop better insights into the market, says Leslie Donato, AmerisourceBergen’s executive vice president and Chief Strategy Officer.
“We didn’t have the capacity—the capacity and the people in-house—that were completely focused on that,” Donatao tells me, noting that the company has historically been more focused on M&A than it has minority investments.
More than two years later, AmerisourceBergen is finally ready to get on the cap table. The medical distribution company, which holds the #8 spot on the Fortune 500 list, has set aside $150 million, for now, and it is working with Touchdown Ventures, a third-party firm that manages corporate venture funds with T-Mobile, Kellogg’s, and others, to partner with entrepreneurs to bring new products to market.
Donato says she sees investing that amount over “a few years,” noting that, should the company experience traction and meet their goals, AmerisourceBergen will likely set aside additional funding. The company plans to make approximately two or three new investments a year, although there’s some flexibility in that number. The fund will be largely focused on early to middle stage investments, in the Series A and B rounds, says David Horowitz, co-founder and CEO of Touchdown Ventures.
AmerisourceBergen is delving into venture capital at an inflection point in the healthtech industry. Coronavirus has spawned rapid adoption of virtual technologies, like telehealth. For its part, AmerisourceBergen has played a critical role in the medical supply chain to transport therapies to treat coronavirus.
But Donato has a laundry list of industry items that could use some innovation. For one, how people pay for care. The billing and reimbursement processes and the paperwork are cumbersome. There’s a host of systems that don’t speak to one another, Donato says, pointing out the moving parts between sharing medical records, benefits verification, and billing—all of which add time to a patient being able to get on therapy. Clinical trials could also be more efficient, Donato says.
Investing in startups will help AmerisourceBergen have a better sense of what new solutions and ideas are out there. “One of the downsides of not being able to look at a broad set [of companies] is you might get very excited about a particular solution or asset and not have a good enough sense of the competitive environment,” Donato says.
But venture capital is competitive, and it isn’t easy for any fund to stand out—not to mention a 42,000-employee healthcare services giant. One of the biggest challenges AmerisourceBergen will face is one any corporate giant wrestles with: speed. The approval process for its new fund alone has taken the company a couple years.
But Donato says the company’s global reach and relationships with hospitals, pharmacies, and healthcare institutions will make it an attractive partner. And it’s ready to go to market.
That’s the Spirit… JetBlue Airways has made an “unsolicited” offer for Spirit Airlines, a mere two months after Fontier agreed to buy its low-cost rival. Shares of Frontier have fallen in price since the company announced the acquisition—making Frontier’s offer less appealing than it was only a few weeks ago. Must be nice to have options.
Speaking of health tech… Fortune’s annual Brainstorm Health conference is just around the corner in Los Angeles. Join insightful leaders in health care, technology, and business to take a look at how new technologies, worldwide collaboration, evolving therapeutics, and big data drive better health outcomes and business value. While the conference is invite only, Term Sheet readers get special consideration. You can read more about the event here.
Correction: Yesterday’s newsletter said that Doug Leone would stay on Sequoia Capital’s board. Rather, Leone will remain on the boards of portfolio companies.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.
VENTURE DEALS
- Climeworks, a Zürich-based carbon removal technology company, raised $600 million CHF ($650 million) in funding led by Partners Group and GIC and was joined by investors including Baillie Gifford, Carbon Removal Partners, Global Founders Capital, John Doerr, M&G, Swiss Re,and BigPoint Holding.
- Remote, a San Francisco-based HR management platform, raised $300 million in Series C funding led by SoftBank Vision Fund 2 and was joined by investors including Accel, Sequoia, Index Ventures, Two Sigma Ventures, General Catalyst, 9Yards, Adams Street, and Base Growth.
- Grafana Labs, a New York-based performance monitoring platform developer, raised $240 million in Series D funding led by GIC and was joined by investors including J.P. Morgan, Sequoia Capital, Coatue, Lightspeed Venture Partners, and Lead Edge Capital.
- Binance.US, the digital asset exchange and marketplace's U.S. division, raised $200 million in seed funding from investors including RRE Ventures, Foundation Capital, Original Capital, VanEck, Circle Ventures, Gaingels, and Gold House.
- Sweep, a Montpellier, France carbon management platform, raised $73 million in Series B funding led by Coatue and was joined by investors including Balderton Capital, New Wave, La Famiglia, and 2050.
- Avi Medical, a Munich-based healthcare provider, raised €50 million ($54.6 million) in Series B funding led by Balderton Capital and was joined by investors including Heal Capital, Addition, Picus Capital, Vorwerk Ventures, Eurazeo, 3VC, UiPath founder Daniel Dines, and Forward Health Founder Adrian Auon.
- ClimeCo, a Boyertown, Pa.-based management and development of environmental commodities advisors, raised $50 million in funding from Warburg Pincus and The Heritage Group.
- data.world, an Austin-based data catalog platform, raised $50 million in Series C funding led by the Growth Equity business within Goldman Sachs Asset Management and was joined by investors including Prologis Ventures, Shasta Ventures, Vopak Ventures, Sandbox Insurtech Ventures, and other angels.
- Amenitiz, Barcelona-based property management platform for hotels, raised $30 million in Series A funding led by Eight Roads and was joined by investors including Chalfen Ventures, Point-Nine, Backed, and Otium Capital.
- SmartHop, a Miami-based technology platform for small trucking companies, raised $30 million in Series B funding led by Sozo Ventures and was joined by investors including Union Square Ventures and RyderVentures.
- Evernow, a San Francisco-based menopause telehealth startup, raised $28.5 million in Series A funding led by NEA and was joined by investors including 8VC, Refactor Capital, Coelius Capital, actor and Goop founder Gwyneth Paltrow, and actor and talk show host Drew Barrymore.
- Savana, a Madrid, Spain-based A.I.-based health record management platform, raised $25 million in funding from Conexo Ventures, Knuru Capital, Aldea Ventures, Seaya Ventures, and Cathay Innovation.
- Hivemapper, a San Francisco-based decentralized mapping network developer with a crypto-integrated dashcam, raised $18 million in Series A funding led by Multicoin Capital and was joined by investors including Craft Ventures, Solana Capital, Shine Capital, and 75 and Sunny Ventures.
- GOALS, a Stockholm-based online soccer game, raised $15 million in seed funding led by Northzone and was joined by investors including Cherry Ventures, Moonfire Ventures, Banana Capital, Not Boring Capital, Cassius, FC Barcelona’s Gerard Pique, Sorare co-founder and CEO Nicolas Julia, Axie co-founder and COO Aleksander Larsen, and others.
- Brilliant Planet, a London-based carbon capture and storage company, raised $12 million in Series A funding co-led by Union Square Ventures and Toyota Ventures and was joined by investors including Future Positive Capital, AiiM Partners, S2G Ventures, Hatch, and Pegasus Tech Ventures.
- Overwatch Imaging, a Hood River, Ore.-based airborne imaging systems for piloted aircraft and drones provider, raised $11.15 million Series A funding co-led by Squadra Ventures and Shield Capital and was joined by investors including L3Harris Technologies, Bridger Aerospace, and the Portland Seed Fund.
- Timeline, an Essex, U.K.-based financial planning platform, raised $8 million in Series A funding led by MTech Capital and was joined by investors including FNZ, and non-executive at Peel Hunt Darren Carter.
- StackBlitz, a San Francisco-based collaborative web development platform, raised $7.9 million in seed funding led by Greylock Partners and was joined by investors including Google Ventures, co-founder of GitHub Tom Preston-Werner, and others.
- Afficiency, a New York-based digital life insurance policies marketplace, raised $7 million in Series A funding led by IA Capital Group and was joined by investors including Impression Ventures, SBLI, and Western & Southern Financial Group.
- Flexia, a Berkeley, Calif.-based in-home pilates station, raised $4 million in seed funding led by ADvantage and was joined by investors including Phoenix Capital Ventures, Techstars Sports Accelerator, and Calm Ventures.
- Leap, a wallet for Terra, raised $3.2 million in seed funding co-led by CoinFund and Pantera.
- Playhouse, a San Francisco-based real estate video listing platform, raised $2.8 million in seed funding from investors including Agya Ventures, Gaingels, Goodwater Capital, Nomo Ventures, PKO Investments, Y Combinator, and others.
PRIVATE EQUITY
Lone Star acquired Sencqia, a Tokyo-based structural building materials company. Financial terms were not disclosed.
EXITS
- Dave & Buster’s acquires Main Event, a Dallas-based family entertainment brand, from Ardent Leisure and RedBird, for $835 million.
- First Washington Realty acquired Donahue Schriber Realty Group, a Bethesda, Md.-based real estate investment and management firm, from investors advised by J.P. Morgan Global Alternatives. Financial terms were not disclosed.
OTHER
- Airiam acquired Syntervision, a Huntsville, Ala.-based IT and cybersecurity platform, and Transcendent, a Heartland, Wisc.-based IT management company. Financial terms were not disclosed.
- AQUA acquired Intracoastal Dermatology, a Jacksonville, Fla.-based medical dermatology treatments and aesthetic skin care services provider. Financial terms were not disclosed.
- Kazoo acquired WorkTango, a Toronto-based employee experience survey and people analytics company. Financial terms were not disclosed.
- Kellermeyer Bergensons Services acquired Kimco Facility Services, an Atlanta-based customized commercial cleaning programs, facility maintenance, and associated services provider. Financial terms were not disclosed.
- Markforged acquired Teton Simulation Software, a Laramie, Wyo.-based 3-D printing company. Financial terms were not disclosed.
- Parts Town acquired Encompass Supply Chain Solutions, a Lawerenceville, Ga.-based aftermarket supply chain company, from Comvest Partners. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Apollo, an alternative asset manager, raised $4.6 billion for a second fund.
- Carlyle Group, a Washington D.C.-based global investment firm, raised $4.6 billion for a second fund focused on upper middle market borrowers.
- Base10 Partners, a San Francisco-based venture capital fund, raised $460 million for a new fund for early stage investments.
- Avoro Ventures, a New York-based venture capital firm, raised $186 million for its first fund focused on development-stage biotech companies.
- Voyager Ventures, a San Francisco-based venture capital firm, raised $100 million for its first fund focused on early-stage climate technology companies in North America and Europe.
PEOPLE
- Antler, a Singapore-founded venture capital firm, hired Michael J. Wiatr as partner and promoted Lavanya Indralingam to associate partner. Formerly, Wiatr was with LastObject.
- Cathay Capital, a Paris-based private equity and venture capital firm, hired Kamran-Charles Vossoughi as global operating partner and promoted Simon Wu and Jean-François Cochy to partner. Formerly Vossoughi, was CEO of Michelin China.
- Riverstone Holdings, a New York-based private equity firm, hired Laurel Buckner as managing director. Formerly, she was with Westriver Group.
Correction: Yesterday’s newsletter said financial terms were not disclosed in The Arena Group’s planned acquisition of AMG/Parade. It has since been updated to reflect the terms.
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