Canaan’s latest fund smaller than last, reflecting ‘recalibration’ in response to market

By raising less money in a new investment vehicle than it had for its previous fund, Canaan believes it’s returning to a historical norm for life sciences and other fields, responding to the market downturn by setting itself up for a better shot at returns than it might have with a larger fund.

The firm’s new $650 million Fund XIII is about 19% smaller than its $800 million twelfth fund, closed in 2020. It is, however, accompanied by $200 million in additional capital that the firm plans to deploy among existing investments across all of its funds. Canaan generally participates in company creation and syndicated series A rounds, in biotech and an array of non-life sciences fields...