Overview of Psychedelics Industry & State of Venture Capital

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Psychedelics and alternative modalities are close to my heart. I grew up in a (super) boring town in South Africa, but the people I was with were far from boring. I was surrounded by truth seekers, musicians, artists, rebels. People who didn’t want the corporate life, but also didn’t know what they wanted instead.

I started experimenting heavily with psychedelics when I was 17. I was obsessed with the spiritual world from a young age. As cliche as it sounds, psychedelics changed my life in many subtle ways which turned into big things. And I believe everyone should experience, at least once in their lifetime, how it feels to get out of your every day perceptions of reality and tap into other realms of consciousness.

All I can say is this: life is a paradox. There’s always two sides, and nothing, ever, is as you think it is.

What’s interesting to me, and what inspired this piece, is that back then, 10 years ago, having grown up in South Africa, I had never heard about startups and Silicon Valley, nor did I have any interest in business-related notions.

And now, there's a sort of psychedelic therapy renaissance that has been happening, especially within Silicon Valley tech circles, as investors are flocking with their $$$ to other dimensions too.

I had so much fun putting this piece together on the psychedelic industry. We’ve seen a massive shift in the past 15 years from the ideal of what a “professional” is and what the idea of success looks like. And while business will be business, the thread between business, authenticity, and heart-led innovation and exploration, is becoming thinner and thinner, and unequivocally interwoven. Consciousness expansion is no longer just for the hippies.

The term "psychedelic therapy renaissance" refers to the renewed interest among researchers in the therapeutic potential of psychedelic substances, such as psilocybin (found in magic mushrooms) and MDMA (a component of Ecstasy).

For decades, regulatory restrictions and cultural stigma had effectively halted research into the use of psychedelics for treating various mental health disorders, including depression, anxiety, PTSD, and addiction. However, recent years have witnessed a resurgence of interest in psychedelic-assisted therapies, enabling researchers to resume their investigations.

So let’s take a look at the state of the industry!

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Big Moves in 2024

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🦄 Jan '24 was the 2nd highest month on record for fundraising among biotechs in the space ($207M)

🦄 J&J’s ketamine-derived Spravato is expected to make $1bn+ in revenue this year

🦄 Sovereign wealth funds held talks with major players (despite very restrictive drug laws)

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Market Overview

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• Global Psychedelic Drugs Market: Projected to reach $10.75 billion by 2027.

• Key Drugs: Psilocybin, ketamine, LSD, MDMA.

• Treatment Applications: Conditions like treatment-resistant depression, opiate addiction, PTSD, narcolepsy, and panic disorder.

• Distribution Channels: Hospital pharmacies, retail pharmacies, online channels.

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Billionaire Tech Execs Investing in Psychedelic Startups

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→Peter Thiel (co-founder of PayPal and Palantir Technologies)

→Steven Cohen (a hedge fund manager and owner of the New York Mets)

→Bob Parsons (founder of GoDaddy)

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Key Players

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🍄 Journey Clinical

‍🍄 MindMed

‍🍄 Cybin Inc

‍🍄 Numinus

‍🍄 Lophora

‍🍄 Wavepaths

🍄 Atal Life Sciences

🍄 Naurex

🍄 GH Research

🍄 COMPASS Pathways

🍄 Beckley Psytech

🍄 Delix Therapeutics

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28 VC Funds & Partners to Know

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🟣 Camden Partners

→David Warnock

‍→Focus: Early-stage and late stage companies

→Based in: Maryland

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🟣 Catalio Capital Management

→George Petrocheilos, R. Jacob Vogelstein

‍→Focus: Early-stage companies

→Based in: New York

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🟣 Felix Capital

→Antoine Nussenbaum, Frederic Court

‍→Focus: Early-stage and late stage companies

→Based in: London

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🟣 Future Ventures

→Maryanna Saenko, Steve Jurvetson

‍→Focus: Early-stage companies

→Based in: San Francisco

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🟣 Grassfed Ventures

→Joseph del Moral

‍→Focus: Early-stage companies

→Based in: Toronto

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🟣 Isomer Capital

→Joe Schorge

‍→Focus: Early-stage companies

→Based in: London

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🟣 JamJar Investments

→Adam Balon, Jonathan Wright, Katie Marrache, Richard Reed

→Focus: Early-stage companies

→Based in: London

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🟣 Soleus Capital

→Guy Levy

→Focus: Early-stage companies

→Based in: Connecticut

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🟣 Tao Capital Partners

→Nicholas Pritzker

‍→Focus: Early-stage and late stage companies

→Based in: San Francisco

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🟣 Able Partners

‍Amanda Eilian

‍→Focus: Early-stage companies

→Based in: New York

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🟣 Empath Ventures

→Brom Rector, CFA

‍→Focus: Early-stage companies

→Based in: Los Angeles

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🟣 Negev Capital

→Ken Belotsky

‍→Focus: Early-stage companies

→Based in: Grand Cayman

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🟣 JLS Fund

→Simeon Schnapper

‍→Focus: Early-stage companies

→Based in: New York

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🟣 Iter Investments

→Roberto Velarde

‍→Focus: Early-stage companies

→Based in: Florida

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🟣 Ambria Capital

→Michael Sobeck

→Focus: Early-stage companies

→Based in: Puerto Rico

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🟣 Subversive Capital

‍→Based in: NYC

→Founded by: Michael Auerbach, Michal Shtender

‍→Focus: Seed, Series A, Series B

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🟣 Lionheart Ventures

‍→Based in: San Francisco

→Founded by: David Langer

‍→Focus: Early-stage companies

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🟣 PsyMed Ventures

‍→Based in: San Francisco

→Founded by: Greg Kubin, Matias Serebrinsky, Dina Burkitbayeva

‍→Focus: Early-stage companies

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🟣 Palo Santo

‍→Based in: Chicago

→Founded by: Tim Schlidt

‍→Focus: Early-stage companies

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🟣 Noetic Fund

‍→Based in: Toronto

→Founded by: Sa'ad Shah, Warren Wright

‍→Focus: Early-stage companies

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🟣 Vine Ventures

‍→Based in: NYC

→Investors: Ryan Zurrer, Ozan Polat, Daniel Tarockoff

‍→Focus: Early-stage companies

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🟣 Satori Capital

‍→Based in: Texas

→Investors: Amy Kruse

‍→Focus: Early-stage companies

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🟣 Neo Kuma Ventures

‍→Based in: London

→Founded by: Clara Burtenshaw

‍→Focus: Early-stage companies

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🟣 Leafy Tunnel

‍→Based in: London

→Founded by: Bek Muslimov, Nikolay Tretiyakov

‍→Focus: Early-stage companies and Series B

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🟣 Zen Ventures

‍→Based in: NYC

→Founded by: Champ M. aka Sweet Strategy

‍→Focus: Early-stage companies

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🟣 Mystic Ventures

‍→Based in: LA

→Founded by: Brock Pierce, Jeremy G.

→Focus: Early-stage companies

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🟣 Thiel Capital

‍→Based in: LA→Founded by: Peter Thiel

→Focus: Early-stage companies

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🟣 The Conscious Fund

‍→Based in: Illinois

Founded by: Henri Sant-Cassia, Richard Skaife, Michael Hoyos

→Focus: Early-stage companies

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Resources

‍Psychedelic Alpha‍

‍Psychedelic Invest - Insights and Analyses on Psychedelics‍

‍Microdose

Psychedelic Insights‍

‍Green Market Report

Psytech

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Tailwinds

• Demand for Effective Psychiatric Medication: Psychedelics are well tolerated and could have substantial therapeutic effects after a few sessions.

• Growing Public Support: Support for psychedelic-based therapy is increasing.

• Anti-addictive Properties: Psychedelics are noted for being anti-addictive.

• Regulatory Advances: Loosened regulations and FDA breakthrough designations are paving the way for more research and acceptance.

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Headwinds

• Regulatory Hurdles: FDA has not yet approved psychedelics for treating any disease.

• Insufficient Research: Most studies are small Phase 1 or 2 trials.

• Mental Health Risks: Potential for triggering HPPD and psychosis.

• Cost Concerns: Psychedelic-assisted therapy is more expensive than traditional medications.

• Ethical and Safety Concerns: Risks of exploitation in therapy.

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Future predictions

Increased Legalization and Regulation‍

With states like Oregon and Colorado already legalizing psilocybin for therapeutic use, more states and countries are expected to follow suit, leading to a more structured and regulated market for psychedelics.

Expansion of Clinical Research

Continued investment in clinical trials and research will likely lead to new psychedelic treatments for a variety of mental health disorders, including PTSD, depression, and anxiety.

Integration into Mainstream Medicine‍

As evidence supporting the efficacy of psychedelic therapies grows, these treatments are expected to become more integrated into mainstream medical practices, potentially transforming mental health care paradigms.

Technological Innovations‍

Advances in technology, such as AI-driven personalized therapy and virtual reality experiences, will enhance the delivery and effectiveness of psychedelic-assisted therapies.

Increased Public and Private Investment‍

The psychedelics industry will likely see a surge in both public and private investment, as companies look to capitalize on the growing demand for innovative mental health treatments.

Development of New Psychedelic Compounds‍

Ongoing research and development will lead to the discovery and commercialization of new psychedelic compounds that could offer more targeted and effective treatments for specific mental health conditions.

Focus on Safety and Accessibility‍

Ensuring the safety and accessibility of psychedelic treatments will become a priority, with efforts to create standardized protocols and reduce the costs associated with these therapies.

Cultural Shift and Acceptance‍

As stigma around psychedelics continues to diminish, there will be a broader cultural acceptance and understanding of these substances as legitimate medical treatments.

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