LONDON – The face of life sciences investing is shifting as traditional venture capitalists are joined by patient capital, crowdfunding platforms, tech investors, pharma, foundations and philanthropists, each with different motives and different appetites for risk.

That is changing business models and encouraging new approaches to innovation, said John Harris, CEO of OBN, an industry body representing 400 biotechs.

As one example, "patient capital and philanthropic funding means companies can now in some cases get funding without having an exit in mind," Harris said.

At the same time, there has been a 180-degree shift in big pharma's attitude to biotech. "I remember when you had to take the technology as far as you could, do phase III trials and de-risk. Now pharma looks more to startups as a driver for the pipeline, so they want to invest sooner – sometimes pre-patent," Harris told a session looking at the evolution of the life sciences investment industry.

"In some senses, pharma is in competition with traditional investors," said Harris.

The annual Biotrinity conference has been the venue for pitches and partnering discussions that have led to £5.2 billion (US$7.3 billion) being invested in the sector, according to Harris. OBN has been tracking and analyzing those deals over the eight years since the event was first staged.

As another new factor in the mix, crowdfunding platforms are giving generalist investors an entre to biotech, said Daniel Oliver, founder and CEO of Madrid, Spain-based Capitalcell, the first dedicated life sciences crowdfunding platform in Europe.

"It was born out of how hard it is to raise money for biotech," Oliver said. "In Spain and Italy it is extremely hard. We help generalist investors in; we have also dragged in some specialists, too."

In the three years since Capitalcell was formed, 25 companies have raised money via the platform, and, said Oliver, "they are all still alive."

For old-style VCs, there are threats and opportunities in the shifting landscape, according to Ingrid Teigland Akay, founder and managing partner of Hadean Ventures, of Oslo, Norway, a firm she referred to as a "traditional VC."

There is a "risk of disruption" from non-traditional investors, Akay said, referencing the incursions of tech investors onto what is usually regarded as life sciences' turf.

In response, Hadean has added its own tech expertise and has started to look at deals alongside a tech venture fund.

In cross sector startups, combining health plus digital in some form, tech VCs are willing to take more risk than life sciences VCs, said Akay. "What we are seeing is an add-on effect, because more companies are getting off the ground, and creating more diversity."

Biotech's increasing dependence on technologies such as machine learning, pattern matching, big data analytics and artificial intelligence, to organize and analyze its data is a key factor in attracting tech investors.

"Tech wants to invest in health care," said Allan Syms, a serial biotech entrepreneur who currently is chief operating officer of Mypinpad, a tech company poised to deliver a system for small retailers that will turn standard-issue smartphones and tablet computers into debit and credit card readers.

He is next to turn his attention to a company that will apply the algorithmic expertise of the inventors of the internet streaming technology Skype to genomic data.

"Tech is going to have an impact on managing [biotech's] big data," Syms said. "The big tech companies like Google and Amazon are changing the face of biotech investing."

The confluence of tech and biotech is being fueled by digitization in all its forms, raising the question of where the boundaries now lie. Akay said that while money may be coming into biotech from traditional tech investors, the two sectors still are in competition for the same pool of VC money.

At the same time it remains – mistakenly – the case that tech is seen as lower risk, said Akay. "European Investment Fund research shows life science VC outperforms tech VC, but even so it is harder for life science companies to raise money," she said.

However, it does seem the changing profile of life sciences investors also is changing the overall appetite for risk.

When Capitalcell formed, 98 percent of investors were private individuals who had never invested in life sciences before. Now the platform is attracting generalist VCs who want to be in biotech. "Yes the appetite for risk is increasing," Oliver said. "But the potential returns are high and there are also social aspects that are driving people to invest in startups."

Akay agreed acceptance of risk has changed. That is because non-traditional investors make different assessments. "They have different motives for investing. For example, philanthropists and foundations are happy to take risk because they want to get an answer and they are keen to learn and contribute knowledge," she said.

Maina Bhaman, managing partner in Sofinnova, the one of Europe's oldest biotech VCs with eight funds under its belt, said her firm is taking on more risk at the earlier stages of commercialization.

"The reality is you also see pharma coming in at an earlier stage, which helps with the risk profile. You can invest earlier and exit earlier," Bhaman said.

But Bhaman cautioned, "Life sciences investing is changing, but what is super-important is to find the right type of investor. Don't get swayed by high valuations," she said.