Denmark’s Vaekstfonden backs Merlin III fund

Vaekstfonden, the largest venture capital provider in Denmark, has invested in London-based Merlin Biosciences Fund III: the first time it has invested in a VC fund outside Denmark.

Merlin Biosciences has received a boost to its fundraising for Merlin Fund III with the news that Danish venture capital organisation Vaekstfonden has committed an undisclosed sum.

The capital commitment, which comes from Vaekstfonden’s fund of funds, is part of a strategic agreement between the two organisations that will see Vaekstfonden help source deals for Merlin in the Danish market.

“The Danish biotech industry has grown rapidly in recent years thanks to the significant investment by local VCs, such as Vaekstfonden, in the world class science and technology emerging from start-up companies,” said Mark Clement, chief executive of Merlin.

Added Martin Vang Hansen, investment director at Vaekstfonden: “In order to take the Danish biotech industry to the next level we know that we need to attract the right level of investment and competency from outside the country. We believe that Merlin is the right partner to provide this expertise and help facilitate further progress in the sector.”

Merlin Biosciences has taken a keen recent interest in the Nordic market, hiring former investment banker Niilo Santasalo to head up a new Helsinki office in August 2003. Merlin held a first close of Merlin III at €125 million in September 2002 and is targeting a final close of €250 million. It specialises in the life sciences sector and has backed 27 European biotech companies since 1997.

Vaekstfonden is a state-backed financial organisation set up to promote Danish business and trade. With a capital base of DKK2.4 billion (€322 million), it makes direct investments in small and medium-sized businesses, co-finances venture funds and administers Vaekstkaution, a national loan guarantee scheme.