U.S.-based psychedelic investment fund Palo Santo, has launched with an initial $35 million in capital raised and an active portfolio of 20 companies. The diversified venture fund said in a statement that it is focused on tackling the growing global mental health crisis by investing in innovative psychedelic-based and adjacent therapies that are poised to shape the future of psychiatry and fields beyond.
“We could not be more excited about how our portfolio has shaped up, as well as its trajectory,” said Palo Santo Co-Founder Daniel Goldberg. “This is a moment of validation for our model, and we will continue to support our thesis by backing talented founders who are creating innovative approaches to mental health and addiction treatment. At my first psychedelics conference years ago, it felt as if only the leading researchers and those ‘in the know’ were aware that psychedelics were poised to change psychiatry forever. That’s all changing now, and with these compounds being destigmatized, medicalized, and legalized, I couldn’t think of a more impactful investment for our society.”
Daniel Goldberg and his partners Tim Schlidt and Tony Eisenberg partnered in 2020 to form Palo Santo and formally launched the venture capital fund in 2021. Having seen the enormous therapeutic potential of psychedelic medicines years ago, the partners have been active as early participants and investors in the emerging industry.
Palo Santo said in a statement that it is targeting early-stage, high-growth opportunities within biopharma, drug development, digital therapeutics, healthcare services, and tech-enabled solutions. These businesses are positioned to profoundly impact treating a wide range of conditions such as depression, PTSD, anxiety, OCD, addiction, chronic or neuropathic pain, neurodegenerative diseases, and a range of inflammatory-related illnesses.
To date, Palo Santo said it has partnered with and funded more than 20 portfolio companies with notable investments such as atai Life Sciences (NASDAQ: ATAI), Reset Pharma, Field Trip Health, Tactogen, Eleusis, Bex
Palo Santo Co-Founder Tim Schlidt, added, “Psychedelics represent a paradigm shift in treating a range of illnesses, but a sense of scientific rigor and thoroughness is still required in investing across this ecosystem. Palo Santo applies a meticulous and selective approach to investing and heavily leverages its network of scientific advisors and academicians to evaluate opportunities. We must remember that much of the investment opportunity-set is within biotech, and therefore requires a deep focus on the science, mechanisms of action, and review of the appropriate assays or human data at each phase of drug development. With our healthcare and deep network background in the space, Palo Santo is well-positioned as a diligent, validating investor. In addition to this, Palo Santo is providing more than just capital. We actively work to support and synergize our portfolio by connecting founders, advisers, and key opinion leaders with a collaborative ethos in mind.”
The Palo Santo team is supported by scientific advisors Charles Nichols, one of the world’s leading psychedelic pharmacologists; Julie Holland, renowned psychiatrist, psychopharmacologist, and author; David Sherman, a medicinal chemist and head of the University of Michigan psychedelic collective; and John Greden, chair emeritus, University of Michigan Department of Psychiatry and the founder of the University of Michigan Depression Center. Collectively, the team applies a diligent, in-depth scientific approach to portfolio company selection, evaluation, and monitoring.