Harmonix is a venture capital firm that is investing in data-driven platform companies at the nexus of healthcare, life sciences, and critical infrastructure (deep tech). Pulse 2.0 interviewed Harmonix founder and general partner Maximilian Winter to learn more.

Maximilian Winter’s Background

Maximilian Winter

Winter has a background that is deeply rooted in the world of business, specifically within the Fritz-Winter conglomerate – a company with a history of manufacturing automotive components for over seven decades. And Winter said:

“Seeing the inner workings of the family business first-hand gave me a deep understanding of organizational operations and a perspective on the potential and benefits of advanced technology and engineering.”

“My journey with Harmonix started as a transition from my family office when I sought to diversify our business interests. I was particularly drawn to the life sciences field due to my personal experience with Lyme disease (which I was ultimately cured of many years ago). The experience opened my eyes to the immense potential that lies in the intersection of technology and healthcare, and it inspired me to direct our investments towards startups that are at the forefront of scientific and technological developments in healthcare.”

“Our portfolio includes companies like Insilico Medicine, which is harnessing the power of AI for drug discovery; Volumetric, working on 3D printing human organs in a way that is compatible with a patient’s immune system; and Bit.Bio, focusing on curing diseases by reprogramming human cells. These ventures are a testament to our investment strategy, which aims to support companies that are not just developing groundbreaking technologies but also addressing significant health challenges.”

“We’ve grown Harmonix to a portfolio totaling over $40M in assets under management (AUM), and I’m excited about the future in terms of leveraging our in-house expertise to identify promising startups and making meaningful contributions to healthcare for billions of patients.”

Evolution Of Harmonix’s Thesis

How has Harmonix’s thesis evolved over time? Winter shared:

“Our investment thesis at Harmonix has certainly evolved over time. When we first started, our aim was to leverage the wealth and industrial know-how accumulated from the Fritz-Winter conglomerate to foster innovation and growth in the science, technology, and engineering sectors. My personal experience with Lyme disease gave us an early focus on healthcare, where we saw immense opportunities for positive impact and commercial success.”

“As we deepened our expertise and collected more data, we were able to refine our due diligence process and our investment focus. We began to identify specific sub-sectors within life sciences and deep tech that we believed offered particularly strong opportunities.”

“At the same time, we’ve remained agile and adapted our thesis in response to broader market trends and global challenges. For instance, the COVID-19 pandemic further highlighted the critical importance of healthcare innovation and reinforced our commitment to this space. The escalating crisis of climate change has also led us to look more closely at sustainable technologies within life sciences and critical infrastructure.”

“In recent years, we have become increasingly excited about the convergence of AI and life sciences. Given the extraordinary advances in AI technology, we believe there’s huge potential for transformative breakthroughs at this intersection. So, that’s definitely an area we’re looking to explore more in the coming years.”

“As we move forward, our thesis will continue to evolve in line with our learnings, the needs of our portfolio companies, and the wider trends in the market and the world at large. That dynamism, that constant learning and adaptation, is part of what makes this work so exciting.”

Challenges Faced

What challenges did Winter face in building Harmonix and has the current macroeconomic climate affected the firm? Winter acknowledged:

“Building Harmonix has certainly not been without its challenges. Like any venture, we faced obstacles and made mistakes along the way. One of the main challenges was developing our proprietary due diligence framework. With over 100+ elements to screen for, it was a significant undertaking to create a comprehensive, modular, and scalable approach. We had to navigate a steep learning curve, but our investments in this area have ultimately paid off and have provided us with a robust and effective tool for assessing potential investments.”

“Regarding the current macroeconomic climate, it has certainly had its effects. Volatile markets and global uncertainties can make fundraising more challenging and can affect the valuations of our portfolio companies. However, we also see opportunities amid the challenges. During periods of economic downturn, the need for innovative solutions in healthcare and technology becomes even more apparent, and new opportunities can emerge. Our focus on life sciences and deep tech is driven by a belief in the long-term value and impact of these sectors, which tends to persist even in tougher economic times.”

“As for the global pandemic, it certainly emphasized the importance of the sectors we focus on, making our mission feel more urgent and relevant. It also led to an increased interest and capital inflow into healthcare and biotech, which has been beneficial for our portfolio and deal flow.”

“In these uncertain times, our approach is to stay nimble, stay focused, and keep our sights set on the long-term potential of our investments. It’s about balancing the need for immediate resilience with the pursuit of enduring value. Every challenge we face ultimately strengthens our resolve and refines our strategy.”

Favorite Memory

What has been your favorite memory working for Harmonix so far? Winter reflected:

“My favorite memory from working at Harmonix has to be the time we made our first investment. After all the due diligence, all the meticulous analysis, and all the consultations with our team of experts, it was a moment of both accomplishment and excitement.”

“We had built our firm on the belief in the transformative potential of life sciences and deep tech. To finally be in a position where we could directly contribute to the advancement of these fields by supporting an innovative startup was immensely rewarding. The moment we finalized that first deal, I remember feeling both a sense of exhilaration and a profound responsibility. That was when I truly understood the impact of what we were doing at Harmonix.”

“Another wonderful memory would be seeing one of our portfolio companies make a major breakthrough in its field. Witnessing the tangible impact of our investments and knowing we’re part of a mission to advance technology and improve human health – it doesn’t get much better than that.”

“Of course, the journey hasn’t always been easy, and there have been many late nights and early mornings. But those moments of success, when we see our investments making a difference, make all the challenges worth it.”

Significant Milestones

What have been some of Harmonix’s most significant milestones? Winter cited:

“There have been several key milestones that Harmonix has reached, each marking significant growth and progress in our venture capital journey. One of our most recent and significant achievements was the closing of our second fund, Fund II, at $20 million. This represented not only an affirmation of our strategy and approach by our investors but also the continued growth of our firm. Seeing our vision translated into concrete financial support was an invigorating experience for our team and provided additional momentum for our work.”

“The launch of our third fund, Fund III, with a target of $100 million, is another major milestone that we are currently navigating. It is a clear indicator of our growth trajectory and the trust our investors place in us. The launch of Fund III symbolizes our commitment to the future, to invest in even more groundbreaking companies in the life sciences and deep tech sectors, and to our ambition of impacting these fields in profound ways.”

“These milestones, from our humble beginnings to our current position, are markers of our determination, diligence, and success as a top-performing firm. They further reinforce our belief in the transformative potential of the startups we invest in and the power of the entrepreneurial spirit that drives us and the companies we support.”

Investment Success Stories

Upon asking Winter about investment success stories, he highlighted:

“Indeed, we’ve been fortunate to have a number of investment success stories here at Harmonix. Each of these companies represents not only a financial triumph but also significant advancements in their respective fields, contributing to the betterment of society and furthering scientific understanding.”

“One excellent example is Bit.Bio, a company we invested in during their Post-Series A. They are truly revolutionizing the field of cellular reprogramming and have since raised more than $150M in their Series B. As of Q2 2023, they are also in the process of raising an additional $50 million up-round.”

“Sorcero is another great example – we co-led the company’s Series A round, and it’s been growing rapidly since (and recently raised an extension round). Sorcero is redefining knowledge management by deploying a language intelligence analytics platform that can enhance medical claims investigations, support life insurance underwriting, and support real-time medical guideline monitoring and management, among several other critical applications.”

“We also participated in the Series C round for Caresyntax, a leader in surgical automation and analytics. They are driving significant changes in the way surgical procedures are performed and analyzed, making healthcare safer and more efficient.”

“Additionally, Volumetric Biotechnologies – a pioneer in 3D printing of human organs – has also seen impressive growth. Since our investment, they’ve had a step-up in the valuation of 2.8X and, with milestones, that could increase to 27X. This demonstrates the tremendous potential in the field of regenerative medicine.”

“Finally, Insilico Medicine, an AI-driven drug discovery platform we invested in, has experienced an 8.4X valuation increase since our investment. The company exemplifies the power of leveraging AI in life sciences to accelerate the process of drug discovery.”

“These successes not only provide us with financial returns but also confirm our strategic focus on investing in deep tech and life sciences startups with solid scientific foundations and significant market opportunities.”

AUM/Other Metrics

After asking Winter about assets under management and other notable metrics, he revealed:

“We are proud to have a total AUM of $40 million across our funds, with the recent successful closure of our second fund at $20 million and the launch of our third fund with a target of $100 million.”

“Looking at the performance of our individual funds, we have seen some outstanding results. Fund I, with its 2019 vintage, has demonstrated robust performance with a 3.85 times return multiple on invested capital (MOIC) as of Q2 2023. Our performance ranks in the top decile across all venture capital funds (source: PitchBook Benchmarks Report Q3 2022). The success of this fund speaks to our rigorous diligence process and our expertise in identifying and investing in high-potential early-stage companies within the deep tech and life sciences sectors.”

“Our second fund, with a 2021 vintage, has also shown strong early performance, with a 1.5-times return as of Q2 2023. While it’s still relatively early in its lifecycle, we’re encouraged by the progress and are optimistic about its future performance. Fund II performance ranks in the top quartile of all venture capital funds in the same benchmarks report.”

“These performance figures, coupled with our substantial step-up multiples in valuation for certain portfolio companies, underscore our commitment to realizing outstanding returns for our investors while supporting transformative scientific and technological advancements.”

Industry Focus

What are some of the industries that Harmonix is focused on? Winter noted:

“Our investment focus is primarily on early-stage companies that are pushing the boundaries of applied science, technology, and engineering. We’re particularly interested in businesses leveraging deep tech platforms within the life sciences, healthcare, and critical infrastructure sectors. Taken collectively, advancements in these arenas can improve life for all people and create a more harmonious society.”

Differentiation From Other Firms

What differentiates Harmonix from other firms? Winter affirmed:

“There are a few key aspects that differentiate Harmonix from other firms:

First, our deep technical domain expertise in the fields of applied science, technology, and engineering sets us apart. This allows us to fully understand the potential of the technologies we’re investing in beyond what you might find with a more generalist firm.

Second, our due diligence process is incredibly rigorous and driven by data. We screen for over 100 elements in a holistic, multi-stage process that typically culminates in a 30-50-page report with a proprietary scoring system. This thoroughness ensures that we only invest in the very best companies that are built on solid fundamental science and have significant market opportunities.

Third, we have a proven track record. Our top-decile fund performance and our ability to successfully evaluate over 6,000 early-stage opportunities to date with our robust diligence framework validate our approach.

Fourth, our process is not only rigorous but also efficient and scalable. Our rapid assessment templates allow us to assess opportunities efficiently and effectively.

Finally, we pride ourselves on our transparency and the constructive feedback we provide to entrepreneurs. This has earned us the appreciation of many entrepreneurs and strengthened our relationships in the industry.

All these factors combined give Harmonix a unique edge in identifying and capitalizing on high-potential investment opportunities.”

Future Goals

What are some of Harmonix’s future goals? Winter pointed emphasized:

“Looking ahead, there are a few specific objectives we’re aiming towards:

First, we plan to successfully close our third fund (Fund III) with a target of $100 million. This will allow us to scale up our investments in groundbreaking companies and technologies and have a greater impact on a larger number of patient lives.

Second, we’re continually refining our due diligence process. We want to stay at the forefront of data-driven assessment techniques and maintain our ability to effectively and efficiently evaluate potential investments. The constant evolution of our proprietary scoring schematic and diligence report framework is a crucial part of this.

Third, we aim to increase our focus on sustainability and global health challenges. The crises of climate change and pandemics are ever-present, and we believe there are vast opportunities for innovative technologies to make a significant difference. We aim to identify and support the best of these initiatives.

Finally, we’re dedicated to maintaining our impressive results. We believe our unique approach will allow us to continue our strong outlook while contributing positively to society.”

Additional Thoughts

Any other topics to discuss? Winter concluded:

“There are so many interesting areas we could dive into given the exciting scope of technological advancements and our role as VCs in promoting and supporting these innovations.”

“One topic I’d love to explore further is the growing convergence of various fields in creating novel solutions. Think about how AI and biotech are coming together to revolutionize drug discovery or how 3D printing technology is reshaping regenerative medicine. It’s truly an extraordinary time to be working in this sector.”

“It’s also important to mention the role of venture capital in fostering a more sustainable and equitable world. We believe venture capital can and should play a crucial role in addressing major societal challenges – from climate change to healthcare disparities – and provide the resources needed to advance technologies that can truly make this world a better place.”

“Overall, this is an exciting time in the life sciences, deep tech, and critical infrastructure sectors, and I’m thrilled to be part of this journey.”

By Amit Chowdhry