US-based oncology research technology provider Flatiron Health is set to become the latest of GV’s life sciences-focused portfolio companies to net it an exit, after agreeing to a $1.9bn acquisition by pharmaceutical firm Roche last week.
Flatiron has developed an oncology research software platform that stores data from electronic health records. It works with more than 265 community cancer clinics and there are more than 2 million active patient records available for access by its users.
The company had raised $313m since it was founded in 2012, and Roche already owned a 12.6% stake in Flatiron having led its last funding round, a $175m series C round in early 2016 that included Allen & Company, Baillie Gifford and Casdin Capital and valued Flatiron at $1.2bn.
GV, the subsidiary of internet and technology conglomerate Alphabet formerly known as Google Ventures, took part in Flatiron’s $8m series A round in 2013 together with clinical services firm LabCorp, First Round Capital, Great Oaks Capital, Social Capital, SV Angel and IA Ventures.
Flatiron added $130m in a 2014 series B round led by GV and backed by LabCorp and First Round. PitchBook Data placed the Flatiron’s series A post-money valuation at $42m, rising to $350m for the series B, and Roche has agreed to pay $1.9bn for the outstanding shares, valuing the company at about $2.15bn.
The deal will represent the latest in a string of high-value exits for GV, as Alphabet has gradually moved further into life sciences over recent years, led by several strategic investments. Flatiron itself was founded by Nat Turner and Zach Weinberg after their previous company, adtech developer Invite Media, was acquired by Google for $81m in 2010.
GV has already scored four exits in the past four months, beginning with initial public offerings for Gram-negative infection treatment developer Spero Therapeutics and monoclonal antibody developer Arsanis in November that raised a total of $123m.
Neurodegenerative disease drug developer Denali Therapeutics secured $250m when it floated in December before immuno-oncology focused company Armo Biosciences raised $128m from its own IPO three weeks ago. Earlier GV exits in the sector include genome editing technology provider Editas Medicine, which went public in early 2016.
Flatiron is in fact the second oncology-focused GV portfolio company to be acquired by Roche, which bought cancer diagnostics technology supplier Foundation Medicine in a 2015 deal that involved it paying $780m for existing shares and investing $250m for new shares. Bristol-Myers Squibb purchased another investee, iPierian, in 2014, for up to $725m.
GV has also scored exits from other healthcare subsectors, though the returns have been lower. Digital fitness platform FitStar and nutrition coaching service Rise were bought for $17.8m in 2015, and $20m in 2016 respectively.
The most valuable life sciences company remaining in GV’s stable is genomics testing service and technology provider 23andMe, which was valued at $1.75bn following its last round, a $250m series F closed in September 2017. In terms of adjacent subsectors, technology-focused care provider One Medical Group and health insurance platform Oscar have also achieved 10-figure valuations.
As far as future investments go, Krishna Yeshwant, who leads the life sciences team at GV, told Fortune last month that precision medicine and immunotherapy are key priorities, partly due to advances in gene sequencing and editing technology. But the Flatiron sale will bring some big money back for those deals, ensuring the unit continues to show its worth financially.