Accelerator Bags $51M, Makes Long-Awaited Move to NYC
Seattle’s Accelerator has talked for a long time about expanding into other relatively untapped life sciences clusters, aiming to offer a helping hand to early-stage biotech entrepreneurs where there aren’t already a bunch of venture capitalists devoted to the task.
Today, Accelerator’s finally making that jump. It’s raised a whole bunch of cash and opened up new digs in a place that seems poised to make use of it—New York City.
Accelerator today said it’s raised $51.1 million from a big group of industry players and others to close out its latest fund, Accelerator IV. Returning investors Alexandria Venture Investments, Arch Venture Partners, and WRF Capital contributed to the round, but so have the VC arms of three pharma entities—Eli Lilly, Johnson & Johnson (through Johnson & Johnson Development Corp.), and Pfizer (via Pfizer Venture Investments)—as well as the Partnership Fund for New York City, and Harris & Harris Group.
Some of that cash will go towards boosting Accelerator’s Seattle roots, where it’s helped build 12 early-stage biotech companies over the past decade or so. But the big news here is where the rest of the cash is going. Accelerator—the 11-year-old outfit that builds early-stage biotech startups—is opening up a new office in the Alexandria Center for Life Science on Manhattan’s East Side.
The move comes at a time when New York biotech needs it. The Big Apple has come a long way in recent years building the foundation for a biotech cluster—the city’s institutions have been banding together to help make the most out of their research might, forming groups like the New York Genome Center, the Tri-Institutional Therapeutics Discovery Institute, and other initiatives. Incubators are sprouting up. The New York City Economic Development Corp. is amassing a fund to back a number of life sciences startups. All of it’s with the idea of having New York someday mentioned in the same breath as biotech hubs like Boston and San Francisco.
Yet, to date, the New York life sciences ecosystem is nowhere near those two cities—and one of the biggest reasons is that biotech entrepreneurs often take their ideas elsewhere, either because they’re unable to get them funded, or it’s just too expensive to start a biotech in New York. The Alexandria Center for Life Science, two towers overlooking the East River, was meant to help with that, but so far, the offices are mostly filled with outlets for big players like Roche, ImClone Systems, and Pfizer. As such, there are a lot of challenges for aspiring biotech entrepreneurs who want to grow companies in New York. The so-called “valley of death”—the funding gap that promising ideas need to cross to make it to the tables of VCs and industry players—is especially wide.
Accelerator’s arrival, however, is meant to help local startups get across that valley. Accelerator says it will bring strategic VC money, entrepreneurial leadership, and product development help to startups in the area. It’ll be housed in the Alexandria Center, and says it will work with seven of the area’s big research institutions: Albert Einstein College of Medicine of Yeshiva University, Columbia University, Icahn School of Medicine at Mount Sinai, Memorial Sloan Kettering Cancer Center, NYU, Rockefeller University, and Weill Cornell Medical College.
“We are excited to welcome Accelerator to New York City, and look forward to partnering with their outstanding team to transform some of our region’s most promising scientific discoveries into life science start-up companies with a real shot at success,” said Rockefeller president Marc Tessier-Lavigne in a statement.
Accelerator has also added some other partner institutions in Seattle: Benaroya Research Institute, Infectious Disease Research Institute, Pacific Northwest Diabetes Research Institute, Puget Sound Blood Center Research Institute, Seattle BioMed, Seattle Children’s Research Institute, and Washington State University.
Accelerator started up in 2003 when Leroy Hood of the Institute for Systems Biology teamed with a group of biotech venture capitalists and Alexandria Real Estate Equities to get behind startup biotech ideas that were too early for traditional VC investment. Since its founding in 2003, Accelerator has put some $45 million in venture capital towards 12 early-stage biotechs, all in Seattle. Certainly, Accelerator’s backers are hoping some gems can be unearthed in New York.
“There is a funding gap for innovators looking to build new companies, as more and more venture investors are turning their attention to de-risked, later-stage developmental therapies instead of early research,” said Accelerator CEO Thong Le in the statement. “We have had tremendous success in bridging this gap in Seattle, with more than half of our companies graduating to successful venture rounds and achieving development successes. We recognize a similar gap in New York City where funding is available for developed companies but in short supply for early-stage research, and we look forward to this strategic expansion with our new round of committed capital.”