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The U.S. healthcare system faces a myriad of challenges today, including uncertainty over federal regulation and shifting payer systems. You might expect that environment to give pause to many investors.

But if Frazier Healthcare Partners’ latest round is any indication, investors aren’t wary of the health space — in fact, they’re chomping at the bit to get in on the action. The health-focused venture capital firm announced Wednesday it has raised $419 million for its most recent life sciences investment fund, surpassing a goal of $400 million.

The firm said two-thirds of that money will go toward funding early stage startups. Early funding, particularly seed rounds, is one of the most difficult hurdles for life science startups as the companies are often pouring resources into research and development, with the eventual payoff years down the line.

Frazier focuses on companies making therapeutics — new drugs or other treatments. Its portfolio companies have brought 31 new treatments to the market over the past 26 years. The most recent fund brings the firm’s total capital raised to nearly $3.4 billion.

Frazier anticipated that many of the fund’s investments will be in companies created by its Entrepreneurs in Residence or other partners. A spokesperson for the firm said many of those companies are spin-outs from academic institutions or larger biopharmaceutical companies.

“We are excited to continue to execute the investment strategy that has been successful across numerous funds, including our focus on our robust company creation efforts,” Patrick Heron, managing general partner at Frazier, said in a press release.

Washington state, home to Frazier’s co-headquarters, has historically had a strong life science and health sector. But in the past decade, the industry has become stagnant, even shedding a significant number of jobs.

Industry leaders have pointed to the disappearance of government support as part of the problem. The Life Science Discovery Fund, which gave grants to early stage life science startups, lost its funding in 2015 and has been dormant ever since. A state tax credit for companies putting resources into research and development also died out in 2015.

Other studies have pointed to problems including a severe talent shortage, partially due to competition from the technology industry.

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