SoftBank SFTBY is stepping up its shopping spree in Canada.
This week, two innovative Canadian companies announced that the Japanese investment giant’s US$40-billion Vision Fund 2 had led large-scale venture-capital financings: Fast-growing Saskatchewan software startup 7Shifts Employee Scheduling Software Inc. that caters to the restaurant industry; and Montreal drug developer Ventus Therapeutics Inc. SoftBank has now led at least four $100-million-plus deals in Canada in the past year.
“We are meeting a lot of companies and I’m hoping we do a lot more growth investments in the future” in Canada, Ram Trichur, a partner with SoftBank Investment Advisers said in an interview this week.
Ventus said it had raised US$140-million, co-led by SoftBank and previous investor RA Capital Management of Boston. It had participation from the Qatar Investment Authority, Andreessen Horowitz, as well as new and past backers BVF Partners, Casdin Capital, Cormorant Asset Management, Fonds de solidarité FTQ, Alexandria Venture Investments, GV (formerly Google Ventures) and Versant Ventures, which created the company in 2019.
The funding comes 10 months after Ventus raised US$100-million led by RA. Many of its backers are “crossover” investors that typically back both private and public companies, which suggests Ventus is a near-to-medium term candidate to go public. After a rash of initial public offerings by Canadian biotechs in 2020, there was little new issue activity from Canada last year as stocks in the sector traded down.
Ventus’s goal is to devise drugs that can bond with disease-causing proteins that have so far eluded researchers’ attempts to devise successful treatments. Ventus plans to use the funding to hasten the buildup of its drug discovery platform for these “undruggable” diseases.
The company has employees in Montreal and the Boston area; many of the Montreal employees are veterans of Montreal research and development units of pharma giants Merck & Co. Inc., Vertex Pharmaceuticals Inc. and Boehringer Ingelheim International GmbH that shut in the 2010s.
“We believe Ventus’s proprietary computational drug discovery platform makes it quicker and more cost-effective to identify molecular targets from an almost infinite library of compounds,” SoftBank investor John Cassidy said in a statement.
Ventus’s lead drug, VENT-01, targets an immune-system protein called NLRP3. The protein transforms into a molecule called an inflammasome that acts as an alarm to the human body against unwanted microbes and initiates the immune system’s response. But it can also overactivate, causing ailments that include Alzheimer’s and Parkinson’s disease. The trick is to find a pocket in the protein where a novel treatment can fuse to the structure.
Geneviève Guertin, Fonds de solidarité FTQ vice-president for Life Sciences, said in an e-mail that Ventus’s platform “is very promising, as demonstrated by this round that will allow the company to continue moving forward on more targets.”
Several drug developers are working to develop therapies that bond with problematic proteins, including Montreal’s Congruence Therapeutics Inc., founded by biotech entrepreneur Clarissa Desjardins, which announced a venture funding this week.
The Ventus deal marks the second investment for SoftBank in a Canadian biotechnology developer, after it led a US$180-million funding of Toronto’s Deep Genomics last year. SoftBank also led a US$215-million financing in 2021 of e-commerce merchant financier Clear Finance Technology Corp., and this week was named as the lead investor in a US$80-million (C$101-million) in venture-capital financing of 7shifts, which makes online scheduling software for restaurants.
SoftBank is one of several giant global investors that have stepped up funding activity in the teeming Canadian startup sector during the pandemic, joining Tiger Global Management, Hg Capital management and Al Gore’s Generation Investment Management.
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Sean Silcoff