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Klein Shares how NEA Plans to Put More Than $300 Million to Work in Medtech Companies

June 20, 2017

NEA Has Big Medtech Plans for New $3.3 Billion Fund

This week, New Enterprise Associates – known to its friends as NEA – announced closing on a $3.3 billion venture capital fund, with roughly 10% of that total going to Medtech companies. The new allocation follows a $3.15 billion pool raised by NEA in 2015. The proximity of fund closing and size means the firm’s broader investment strategy isn’t likely to change much. But we asked partner Justin Klein, MD, how might the $300 million or so invest in Medtech companies be deployed differently than in the prior fund. Dr. Klein, speaking at the Medtech Conference in Minneapolis, says NEA will walk softly when pursuing new Medtech rather than put capital to work too aggressively. “We try to be very approachable by companies in all stages,” he says. “In some ways we have this terrific advantage or opportunity in the market because of our capital base. And we try to make sure that confers benefits to the companies as much as ourselves.” Dr. Klein agrees that managing this much capital can introduce restraints. The limited scale of a start-up might not warrant a partner’s time or NEA wouldn’t be able to invest the small bit of capital needed for what could still be an investment that generated an “excellent venture return and a winning outcome for a management team.” “We do think about opportunities where scale matters,” he continues. “Those are generally the best fit for us. We like to encourage entrepreneurs to approach us early in the process of shaping their company because we might see an opportunity where our capital base can transform their business plan or add a new dimension to it or take it another step further in a way that adds disproportionate value to what they otherwise might think of in an environment where there are more capital constraints and we weren’t part of the deal.”

Justin Klein, MD, JD

Partner

NEA

Justin joined NEA in 2006 and is a Partner on the healthcare team. He focuses on medical device, healthcare technology and biopharmaceutical company investments. He serves as a director of Advanced Cardiac Therapeutics, Cartiva, ChromaCode, FIRE1, Intact Vascular, Personal Genome Diagnostics, PhaseBio Pharmaceuticals, Relievant Medsystems, Senseonics (NYSE: SENS), VertiFlex, Vesper Medical and VytronUS. Justin’s past board memberships and investments include CV Ingenuity (acquired by Covidien), Nevro (NYSE: NVRO), Topera (acquired by Abbott), TriVascular (NASDAQ: TRIV)i and Ulthera (acquired by Merz). He is also a member of the advisory boards for the National Venture Capital Association’s Medical Industry Group and its Medical Innovation and Competitiveness Coalition (MedIC), as well as a member of AdvaMed’s Business Development Committee. Prior to NEA, Justin worked for the Duke University Health System—reporting directly to the hospital CEO on health system strategy, finance and clinical service unit operations—as Duke built one of the nation’s first and largest healthcare integrated delivery systems. Justin concurrently earned his MD from the Duke University School of Medicine and his JD from Harvard Law School. He has also served as a member of the Board of Trustees of Duke University, where he earned his AB in Economics and his BS in Biological Anthropology and Anatomy.