Venture capitalist Palo Santo raises $ 35 million for psychedelic fund
July 15 (Reuters) – Venture capital group Palo Santo announced that it launched its first psychedelic investment fund on Thursday after raising more than expected $ 35 million, which has been invested in more than 20 companies and may be scaled up .
The nascent psychedelic treatment market has seen increased investor demand over the past year as numerous studies have shown that psilocybin, an active compound in magic mushrooms, is effective in treating depression and other mental disorders.
Billionaire investor Peter Thiel backed psychedelic start-up atai Life Sciences, a company Palo Santo has also invested in, debuted on the Nasdaq with a market value of $ 3.2 billion last month.
“Palo Santo sees many more unique, high-quality investment opportunities than we would have anticipated at this point in the cycle and therefore assesses the growth of this current fund,” said Tim Schlidt, co-founder of Palo Santo.
The company originally planned to raise $ 30 million.
The psychedelic fund will be an active participant and will work with the management of companies in which it invests, Schlidt, a former healthcare banker, said in an interview with Reuters.
The fund will invest primarily in companies that are in the early stages of their fundraising, but could eventually begin to invest in the final rounds as well, said co-founder Daniel Goldberg.
He added that the fund would also look to invest in companies whose operations go beyond the mere production of psilocybin and focus on developing new compounds based on it or its delivery methods.
Report by Shariq Khan in Bangalore; Editing by Amy Caren Daniel