Catalio Capital Management closes $381M venture fund

Biomedical industry-focused investment firm Catalio Capital Management today announced the close of a venture fund that its cofounder says will help it grow Baltimore’s own life sciences industry.

The Catalio Nexus Fund III is worth $381 million and was oversubscribed by $81 million. Without naming the exact backers, a statement noted that the fund received contributions from current Catalio investors and several “new, global institutional investors, foundations and endowments.” With this fund, Catalio wants to bridge academics that create innovative ideas with the financial industry that scales startups.

“The environment in Baltimore is very different from somewhere like Cambridge, Boston or San Francisco, where there’s really a close proximity, both in terms of physical distance and social networks between the academics and the financial industry,” Catalio cofounder Dr. Jacob Vogelstein, who’s based in DC, told Technical.ly. “With T. Rowe Price as the heavyweight over the past few decades in public equities, we really think Catalio can add something meaningful on the private side to catalyze the life sciences industries in and around Baltimore.”

This fund follows up on the second Nexus Fund and a credit strategy that provides non-dilutive capital to life sciences companies. The investment firm can now seed startups from $5 million to $50 million. The Nexus Fund III marks significant progress since Catalio’s Baltimore-focused first fund, which seeded $1 million to startups out of Johns Hopkins University.

That first fund included life science companies like Personal Genome Diagnostics, which Labcorp acquired for $450 million in late December, and  Thrive Earlier Detection, which was acquired for $2.15 billion in 2020. The firm now boasts a more global reach, as well as offices in Baltimore, New York City and London.

Vogelstein attributes Catalio’s victories, as well as those of any successful portfolio company, to an interdependent combination of strong technology and a great team.

“Find the right team. Find the right partners,” Vogelstein advised. “Find the right technology to organize around because you really need to have both elements in place before your company can be successful. A great technology and a mediocre team is going to fail. Same is true vice versa.”