Corporate biotech venture funding rises again

Biotech venture funding has been on a tear for the past couple of years, and corporate investors in the space are doing their part to boost the totals.

Here at Crunchbase, we’ve put together an index of the largest pharma and biotech companies active in startup investment, along with their in-house venture arms. For the second year in a row, we’re tallying their venture investments by round count and dollar totals.

The broad finding? Corporate biotech investors sharply increased the sums put into startup rounds they led in 2018. Overall, they also participated in rounds that were valued at nearly twice year-ago levels.

These aren’t small sums either. In all of 2018, corporate venture investors participated in rounds valued at $8 billion. Rounds with a corporate bio VC as lead investor, meanwhile, totaled around $1.7 billion.

Below, we drill down into a bit more detail, looking at funding totals for the past five years, largest rounds and most active investors.

As bio deals balloon, corporate VCs get spendier

First, it’s worth noting that overall global biotech venture funding rose sharply last year and has been running at historically high levels for the past few years.

For 2018, biotech startups globally raised just shy of $29 billion in seed through late rounds from all investors, according to Crunchbase data. That’s up from $19 billion in 2017.1

Most biotech deals do not include a corporate backer, but a pretty substantial minority do. In 2018, investors in our corporate biotech index participated in 138 seed, venture or growth-stage funding rounds, up from 122 in 2017.

Round counts did not rise as much as investment totals, as the average biotech deal has been getting bigger. The sector has not been immune from the rise of supergiant funding rounds, and deals valued in the hundreds of millions have become far more common.

That’s reflected in the funding totals. Altogether, 2018 rounds with a corporate backer were valued at $8 billion, including contributions from all investors. That’s up from $4.2 billion in 2017.

They’re leading more rounds, too

We also look specifically at bio funding rounds in which a corporate backer was the lead investor. In these cases, it’s safe to assume that the corporate investor put up a large portion, or possibly even all, of the reported funding.

For 2018, we saw corporate bio investors leading a larger number of deals, with a much larger aggregate value than prior years.

There were a few supergiant rounds in the mix. The largest was a $300 million late-stage round for personal genetic testing provider 23andMe, led by GlaxoSmithKline.

Two others were led by Celgene. One was a $250 million early-stage round last February for Celularity, a startup it spun out to focus on cancer treatments using placental cells. The other was a $101 million round last March for Vividion, developer of a proteomic drug discovery platform.

In all, corporate bio investors led at least 30 funding rounds in 2018, with an aggregate value of $1.7 billion. That’s approximately triple 2017 levels.

Active players

Of course, not all corporate bio players are equally exposed to startups. Some are far more active than others.

One example is Novartis and its Novartis Venture Fund, which has participated in 15 deals with an aggregate value of nearly $730 million since 2018. Over the past three years, it has done 40 deals, with an aggregate value of $1.6 billion.

Celgene, which agreed to be acquired by Bristol-Myers Squibb earlier this year (the deal hasn’t closed yet), is another really active venture player. The New Jersey company has participated in 30 deals valued at nearly $1.8 billion over the past three years, including 13 since the beginning of 2018.

Outsourcing innovation

The rise in corporate VC investment in pharma and biotech appears to reflect the continuation of a long-term trend toward supplementing and even supplanting in-house R&D with venture investment. Recent quarters, however, demonstrate that it’s becoming an increasingly expensive strategy, as round sizes grow and investors devote more dollars to funding hot startups.

  1. The numbers reported in this annual look at corporate biotech investment differ from a report on the same topic we put out a year ago. A few factors contributed to the differences, including some additions to the corporate investor list, changes in the Crunchbase data set around deal categorizations and adjustment to deal types.

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Planning for the uncertain future of work

In a recently published, roughly 75-page report, British non-profit organization The Royal Society for the Encouragement of Arts (RSA) outlined several scenarios for how the UK labor market will be impacted by frontier technologies such as automation, AI, AVs and more.

The analysis titled “The Four Futures of Work” was conducted in collaboration with design and consulting firm Arup and was spearheaded by the RSA’s “Future Work Centre”, which focuses on the impact of new technologies on work and is backed by law firm Taylor Wessing, the Friends Provident Foundation, Google’s philanthropic arm and others.

The report is less of a traditional research paper and more of a qualitative, theoretical and abstract exploration of how the world might look depending on how certain technological and sociological variables (immigration, political will, etc.) develop. The authors don’t try to estimate growth paths for new technologies nor do they try to reach a definitive conclusion on what the future of work will look like. The work instead looks to lay out multiple possible outcomes in order to help citizens prepare for transformations in labor and to derive policy recommendations to mitigate externalities in each scenario.

As opposed to traditional quantitative data-based methodologies, research was conducted using “morphological scenario analysis.” The authors’ worked with technologists, industry executives and academic researchers to identify the technological and non-technological uncertainties that will have a critical impact on the future of work, before projecting three (minimal impact, moderate impact, and severe impact) possible scenarios of how each will look by the year 2035. With input from the report’s collaborators, the researchers then chose the four most compelling and sensical scenarios for how the future of work look.

The value of the report depends entirely on how readers intend to use it. If one hopes to gauge market sizes or inform forecasts or is looking for scientific, quantitative research with data — they should not read this. The report is more useful as a way to understand the different ways new technologies may evolve through thought-provoking, fun-yet-probabilistic, and poetic narratives of hypothetical future economic structures and how they might function.

Rather than summarize the four detailed scenarios in the report and all the conclusions discussed, which can be found in the executive summary or full report, here are a few takeaways and the most interesting highlights in our view:

The underwhelming:

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A week of game streaming and earthquakes

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From Extra Crunch We hope all of you enjoyed the conversation with Eric Peckham and Lucas Matney on GDC and game streaming. For those who couldn’t join, a transcript should be coming shortly. Our enterprise reporter Ron Miller has a dive into how Salesforce became the model for enterprise SaaS companies, with some great early […]

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Tesla Autopilot is steering towards lane dividers again

Cutting corners: Tesla Autopilot is possibly the most advanced self-driving system available to the public, but Tesla’s ambition has come with a considerable amount of risk. After a Model X steered into a lane divider causing a fatal accident last year, Tesla ‘fixed’ the problem with a subsequent software update, but the issue is back.

Reddit user Beastpilot drives down a freeway in Seattle as part of his afternoon commute. Last year, only days after a fatal accident in similar circumstances, BP noticed that his own Model X was steering towards the lane divider separating the freeway from a carpool lane that veers off to the left. Speaking to Ars Technica, he described the car as acting as if the divider was an empty lane.

In light of the then-recent tragedy, he notified Tesla immediately. They didn’t respond, but after several weeks, a new update rolled out and the issue stopped. Come October last year, however, BP’s Model X began steering towards the lane divider again. Once again he notified Tesla to no avail, but once again an update rolled out a few weeks later and the issue disappeared.

Continuing to enjoy the Tesla experience despite the Autopilot issues, BP picked up a Model 3. It didn’t have any troubles until the 2019.5.15 update rolled out earlier this month. You can see the issue returning quite clearly in BP’s Reddit post below: the car follows the lane rightwards until it suddenly veers to the left and into the lane divider.

It’s BACK! After 6 months of working fine, 2019.5.15 drives at barriers again from r/teslamotors

This is exactly what happened to Walter Huang last year, only when the car shifted left into the lane divider, his hands weren’t on the wheel and the car hit a concrete wall front on at 70 mph. By that time Teslas had passed that exact same stretch of road 85,000 times on Autopilot, which had probably lulled Huang into a false sense of security. But just because the system works for the first 100,000 times, that apparently doesn’t mean that a software update can’t add a fatal flaw.

One way of making sure old errors aren’t built back into the system – remember, the code is written largely by a neural network – is by checking for every single reported error every single update using simulations. A 3D model of an intersection or road is presented to the software, which must decide what to do and where to go. If it collides with a virtual car or leaves its lane then it’s back to the drawing board. If it passes through all these simulations without a hitch, then it gets downloaded to the cars.

For most companies, this is easy because most self-driving cars rely on Lidar-based 3D maps as their real-time information source. Teslas aren’t equipped with Lidar and only use cameras and radar, and thus don’t use 3D maps to guide themselves. This means that 3D maps can’t be presented to the cars directly, they must be translated into complex footage and radar readings. Tesla refuses to say how regularly they put the effort in to do this, if at all.

Tesla’s plan is to use their billions of miles worth of footage, radar readings and driver’s decisions to create a neural network that is so well informed it must be reliable. Or at least that’s the marketing pitch. In reality, Teslas only consume a few hundred megabytes of data per day at peak, so only a fraction of those miles actually get sent to the supercomputers.

Tesla’s solution to their technical problem is to shift the issue onto the consumer, who must always keep their hands on the wheel and their mind on the traffic, according to their terms of service. Unfortunately, that’s directly against human nature, and drivers do just zone out. With Autopilot on, you can’t trust the car, and you can’t trust the driver. Perhaps it’s better to leave Autopilot off for the time being.

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Want more Love, Death + Robots? Read these 17 short stories online

Last week, Netflix released its 18-episode animated anthology Love, Death + Robots, a decidedly NSFW series that adapted a number of short stories from well-known science fiction authors. It’s clear from watching the series that there’s a nearly endless supply of source material out there for another season, if Netflix green-lights one. While we wait to see whether that happens, we’ve rounded up some recommendations for a good season 2, and we’ve got 17 recommendations that you can read online now (along with a couple of deep cuts that you’ll have to hunt for.)

Love, Death + Robots’ episodes are often heavy on the violence and body horror. One story in that range is Charlie Jane Anders’ “Don’t Press Charges and I won’t Sue,” which was published in Boston Review’s Global Dystopias in 2017. Set in the near future, it follows a woman who’s kidnapped by an ultra-conservative organization that tries to forcibly “fix” her gender. Another good one to consider from Anders is “The Minnesota Diet,” a satirical story about food scarcity in a futuristic city.

Also, every couple of years MIT publishes Twelve Tomorrows, a special fiction-filled edition of its Technology Review. These collections are always worth reading, but Elizabeth Bear’s story “Okay, Glory” (later reprinted in Lightspeed Magazine) is particularly good. It features an eccentric tech billionaire who accidentally gets trapped in his smart home when it’s infected with ransomware.

The 1970 anthology Science Fiction Hall of Fame contains a number of classic stories that would lend themselves well to a Love, Death + Robots 2. One good example is “Surface Tension” by James Blish, originally published in 1952 in Galaxy Magazine. It isn’t officially published online, but here’s a scanned copy of the magazine, courtesy of the Internet Archive. The story is about an expedition from Earth that crash-lands on an aquatic planet. With no hope of rescue, the survivors engineer tiny descendants, who eventually become sophisticated enough to develop their own spacecraft-like ships to explore the world beyond the water’s surface.

Last year, Clarkesworld Magazine published “Wings of Earth” by Chinese science fiction author Jiang Bo. The story is about a pair of astronauts — one Chinese, one American — who explore a massive alien ship that suddenly appears in orbit around Earth. It’s a trippy story that with overtones of 2001: A Space Odyssey, and it would make for a particularly great animated short.

Love, Death + Robots also features some zany episodes, so here’s one that might fit in there: Brooke Bolander’s Uncanny Magazine story “The Tale of Three Beautiful Raptor Sisters and the Prince Who Was Made of Meat” is a fun one about a princess who befriends three velociraptors, who eventually eat the dim-witted prince who’s trying to control her.

Keeping in mind that robots play a big part of this show, an excellent story to adapt would be Ted Chiang’s Lifecycle of Software Objects, a fantastic novella about a scientist raising a pair of robots to sentience. The story was originally published as a hardcover book, but Subterranean Press also published it online. It’s long since been taken down, but you can find it via the Internet Archive. It’ll also be included in Chiang’s new collection, Exhalation, which is due out in May. The title story is also well worth reading.

N.K. Jemisin is responsible for a number of really brilliant novels, but her 2016 story for, “The City Born Great,” would make for an excellent animated short. It’s about a graffiti artist who discovers he’s the physical embodiment of New York City, and has to fight off an existential, otherworldly threat. It’s dynamic, epic, and extremely colorful.

One story that’s stuck with me for years is Geoffrey A. Landis’ “The Long Chase.” It’s set in a distant future where the last robotic survivor of a war attempts to escape from its enemy, a chase that takes centuries, across the solar system and beyond.

Love, Death + Robots did already adapt Ken Liu’s “Good Hunting,” but there are plenty of other stories from his back catalog that might fit. The story that first comes to mind is “The Paper Menagerie,” about a biracial child coming to terms with his identity via some fantastical origami. Another excellent one to consider is “Mono No Aware,” about the crew of a starship struggling to fix their damaged spacecraft after Earth is struck by an asteroid.

I’m a big fan of Karin Lowachee’s short fiction — you might remember a story of hers in our own digital anthology, Better Worlds. Since Love, Death + Robots featured a bunch of stories that focused on mechs and military science fiction, her Nomad would be a good fit. It’s about a sentient mech coping with the loss of a beloved pilot, and running into a gang of rogue mechs in the wastelands of Canada.

Clarkesworld Magazine also published Chelsea Muzar’s “Not Now” last year. It’s short, but has an intriguing premise: a giant mech arm falls from the sky and onto a teenager’s house. She’s left to cope with the fallout: discrimination from her neighbors and classmates who were already suspicious of robots.

Linda Nagata’s short story for, “The Martian Obelisk,” earned a Hugo nomination last year, and it’d lend itself well to animation. An architect has devoted her life to a project at the behest of a tech gazillionaire who wants her to build a monument to humanity on Mars. It’s meant to outlast us, but she runs into complications when she discovers that a long-assumed-dead colony still has survivors.

A great short story that came out last December is Annalee Newitz’s “When Robot and Crow Saved East St. Louis,” which was published in Slate. A health bot goes from house to house as part of a government program to monitor neighborhoods for infectious diseases like the flu. When the government privatizes its program, it continues its work on its own, with the help of a flock of crows.

Love, Death + Robots’ trio of John Scalzi adaptations show off how well his super-short stories adapt to the screen. In that vein, a piece he published to his blog Whatever last December, “An Interview with Santa’s Lawyer,” might make a really fun animated short, if only because it includes the line “I’ve seen Santa out of uniform. That dude is ripped.”

It’s also worth tracking down stories that haven’t made their way online. Love, Death + Robots did some deep dives into old collections and anthologies, and found a bunch of short fiction that was worthy of attention.

Karen Traviss is probably best known for her Star Wars and Gears of War novels, but her short fiction is pretty great as well. “Suitable for the Orient,” which appeared in Asimov’s Science Fiction back in February 2003 (and is included in her short story collection View of a Remote Country), takes its title from a saying from the British Empire — below-par doctors were frequently shipped out to Asia. In this story, such a doctor has has to deal with the native near-sentient aliens on a planet after human hunters kill some of them.

“The Waste Land” by Charles Sheffield might be harder to track down, as it only appears to have been published in the March 2003 issue of Asimov’s Science Fiction. It’s still worth reading if you have the option. It focuses on a security guard who’s called into a nuclear-waste facility to investigate the death of a worker who suffered from unbelievable radiation burns. In the process, he discovers a mysterious experiment and a cover-up. This one feels like it’d be particularly suited for a noir-ish art style.

Another couple of entries from the Science Fiction Hall of Fame anthology would make good animated shorts. The first is Murray Leinster’s “First Contact,” about a human spaceship coming into contact with an alien counterpart, and having to figure out how to exchange information without either of them tipping off the other about the location of their homeworlds. Another is “Microcosmic God” by Theodore Sturgeon, about a brilliant scientist who develops a tiny civilization in his lab and rapidly advances their evolution and technology by continually killing off generations.

Finally, given Love, Death + Robot’s frequent use of cats, Arthur C. Clarke’s story “Who’s There?” seems like a perfect fit. It’s a fun story about an astronaut who discovers some unexpected passengers while on an EVA.

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