Proximal Ventures raises $27.5 million to back AI in drug development

A $500,000 first-check AI fund solves a different problem from one that leads a $100 million Series C. Proximal Ventures is the first kind.

The firm raised $27.5 million for its debut fund, TechCrunch reports. Founder Sahir Raoof will back pre-seed and seed-stage startups that bring AI to pharmaceutical services and drug development. Check size is $500,000 to $1.5 million.

Who is behind it

Raoof was a principal at SignalFire before this, TechCrunch reports. Before that he led business development at Iterative Health, which recruits patients for clinical trials. Earlier he ran partnerships at Flatiron Health. Roche bought Flatiron for $1.9 billion in 2018, TechCrunch notes.

The LPs are SignalFire, Kleiner Perkins and Bertelsmann Healthcare Investments, TechCrunch reports. Dimension Capital co-founders Nan Li and Zavain Dar also backed the fund. So did Amy Abernethy, co-founder of Highlander Health and a former principal deputy commissioner at the FDA.

The backer list matters for a founder picking a lead. Three of these names have worked inside the regulated side of health. One worked inside the FDA. That is a different set of introductions from a generalist seed fund.

What it will fund

The fund targets pharmaceutical services that drug companies have long outsourced to specialist firms, TechCrunch reports. Three named areas: molecular compound synthesis, drug manufacturing, and clinical trial data analysis. The theory is that AI can cut cost and time in each.

Proximal has already backed six companies. TechCrunch names one: ChronicleBio. It was co-founded by former OpenAI executive Fidji Simo. It uses AI to analyse biological and medical data for chronic disease work.

Three specific jobs a founder can pitch

A new pre-seed fund with a stated area makes two things concrete for a founder. First, somebody is now writing small checks for AI in clinical trial analysis, compound synthesis and drug manufacturing. Three specific jobs, each with existing specialist vendors whose margins can be split.

Second, the check size tells you what the fund thinks is possible before a real customer. $500,000 to $1.5 million buys a small team maybe nine months of runway. That means Proximal wants to see a working product or a paying pilot by month nine. If your problem cannot show a pilot in that time, this is not the fund to pitch.

For a drug company buyer, the arrival of a fund like this is a signal. More vendors in these three jobs are coming. Procurement teams can expect more demos in the next year. Ask any vendor for a clean read on what the AI actually changes in the pipeline.

Source

Reporting: Proximal Ventures raises debut fund to back startups bringing AI to drug development, Marina Temkin, TechCrunch.