Corporate VCs fill biotech funding gap amid venture slowdown

Corporate venture arms like Novo Holdings, Eli Lilly, and Sanofi Ventures ramped up investments in biotech startups in 2025, stepping in as traditional venture funding dried up.

Why it matters: Their deep pockets and long-term outlook have become critical lifelines for early-stage drug companies struggling with capital scarcity, delayed IPOs, and rising R&D costs.

Backstory: Since the biotech funding pullback began, many startups have faced layoffs, program cuts, or closures. Corporate VCs, funded directly by pharma parent companies, don’t rely on limited partners, allowing them to invest consistently and strategically.

Big picture: This shift has made corporate VCs some of the most influential forces in early biotech. In 2025 alone, Novo, Lilly, and Sanofi participated in 44 private rounds, with Novo Holdings in the lead with 18. This is up from a total of just 11 in 2022, according to data from BioPharma Dive.

Zoom in: The benefits of VCs go beyond capital; corporate VCs offer validation, regulatory insights, and strategic connections. Clearly, quite a few firms believe in the benefits, with over 70% of IPOs and 60% of biotech M&As since 2022 including corporate VC backing.