Although there’s still some stigma surrounding the psychedelic industry, more and more psychedelic venture capital firms are ready to open their wallets. In the first half of 2024, psychedelic startups got over $600M in funding.
The industry is gaining traction, slowly stepping out of the “vice” category. The fact that the psychedelic market is about to hit $6T by 2030 signals further growth and huge potential for founders.
Whether you’re entering the market or scaling your psychedelic startup, you should prepare a solid investor outreach strategy first. There’s no point in putting much effort into your pitch deck if you’re sending it to the wrong investors, those who are either not interested in psychedelics, don’t invest at your stage, or simply don’t cover your geography.
To minimize the number of “no” from investors, we’ve compiled a list of top VC firms investing in psychedelics with their investment focus and contact details, so that you know for sure whom to pitch. The article also talks about the most notable psychedelic startups, angel investors, accelerators, and the overview of the VC landscape.
- AI & Deep Tech
- Agritech & Farming
- +18
- Pre-Seed
- Seed
- +4
- AI & Deep Tech
- Biotech
- +19
- Convertible Note
- Pre-Seed
- +5
- AI & Deep Tech
- Advertising & Marketing
- +21
- Seed
- Series A
- +1
- $500K-$1M
- $1M-$3M
- AI & Deep Tech
- Agritech & Farming
- +19
- Seed
- Series A
- +2
- $1M-$3M
- $3M-$10M
- AI & Deep Tech
- B2B
- +22
- Seed
- Series A
- +6
- $100K-$500K
- $500K-$1M
- +2
- Agritech & Farming
- Biotech
- +13
- Pre-Seed
- Seed
- +1
- $0-$100K
- $100K-$500K
- +3
- AI & Deep Tech
- Agritech & Farming
- +13
- Seed
- Healthtech & Wellness
- Biotech
- +7
- Post-IPO Equity
- Pre-Seed
- +2
- Advertising & Marketing
- Software & Apps
- +10
- Pre-Seed
- Seed
- +3
- Healthtech & Wellness
- Biotech
- +6
- Post-IPO Equity
- Seed
- +2
Most active psychedelic investment funds
Although for many institutional VCs, investing in psychedelics is a “no-go” option, the number of industry supporters has been growing.
Given the potential of psilocybin, hemp, and other drugs to help resist depression, anxiety, and addiction, there are many VCs that are ready to help psychedelic startups and give them cash to proceed with developing the industry. Some of them are:
Noetic Fund has already invested over $87 million into psychedelic startups. Founded in 2020, this VC firm has offices in Toronto and New York and 35 deals in its portfolio. By supporting medical devices, drug development, and digital health companies, Noetic Fund aims to improve the overall mental healthcare system.
Integrated helps consumer wellness, digital health, and psychedelic brands. This New York-based fund has already allocated around $55 million, saying it donates 10% of all the profits to nonprofit organizations. Among the companies in its portfolio are Beckley Psytech, Small Pharma, and Tripp.
Palo Santo is another active supporter of psychedelic startups. The fund has poured over $30 million into the industry. With more than $55 million in AUM, Palo Santo gives cash to digital therapeutics, biotech, drug development, and healthcare companies such as Fluence, Journey Clinical, and Gilgamesh Therapeutics.
Most notable psychedelic startups
The psychedelic industry is relatively young with many first-time founders who might not have enough experience to go to the market, launch their product, achieve product-market fit, and gain traction in order to secure big bucks from psychedelic venture capital firms. However, there are also many companies that operate in the market successfully and land good deals from VCs.
One of these ventures is Nue Life Health, a telemedicine and psychedelic startup based in the US that won a $23 million Series A round in 2023 to launch new products. This followed a successful $3.3 million seed round in 2021. Nue Life also got a $1.9 million injection from its existing investors.
Another notable case is Cybin, a biotech brand that works on psychedelic-based therapies to treat mental health disorders. Once started as a psychedelic startup, Cybin progressed into one of the top players in the market. In 2020, Cybin went public through RTO (reverse takeover) and in 2021, the company listed its shares on the NYSE American Stock Exchange. In 2023, Cybin raised over $45 million via equity offerings.
Accelerators investing in psychedelic startups
Most accelerators in the psychedelics industry have a multi-profile approach—they support researchers, scientists, and psychedelic startups.
Some of the accelerators investing in psychedelics are:
Techstars is a global accelerator that offers programs to different startup tastes and needs across various industries. You can get not only the knowledge and expertise of experienced entrepreneurs and experts but also psychedelic investment and networking. This accelerator is a good choice for those seeking mentorship, money, and a global reputation.
The Conscious Fund Accelerator is a program offered by The Conscious Fund to back early-stage psychedelic startups. This program is for founders who need assistance with regulatory challenges and clinical trials—those who work in the areas of drug discovery, clinics, addiction programs, retreats, AI, telemedicine, media, and training.
Angel investors in the psychedelic industry
Aside from traditional VC firms, early-stage psychedelic startups can benefit from angel investing. Although angels write smaller checks, it can be easier to convince them to help you. Unlike many institutional VCs that consider psychedelics a taboo and a “sin” category, angel investors are always ready to support cool ideas if they see true potential.
One of the most prominent angel investors is Tim Ferriss, who poured billions into psychedelic research at Johns Hopkins University. Peter Thiel invested in mental health companies like Compass Pathways through his firm, Thiel Capital. Christian Angermayer, the founder of ATAI Life Sciences, is one of the top advocates and angel investors in the psychedelics industry. He focuses on developing both psychedelic and non-psychedelic compounds for mental health treatments.
Overview of the psychedelic venture capital ecosystem
The situation in the psychedelic industry feels like the so-called playing out of a Darwinian model—only strong and efficient psychedelic startups that can adapt and survive in any economic environment can succeed in the long run.
Why?
Because the industry is still small, it can’t guarantee the returns institutional investors get used to for the capital they typically put to work. And stigma around psychedelics only aggregates the situation. Does it mean that the psychedelic industry is doomed? Of course not, and here’s why.
Setting aside dropping funding numbers in Q3 2024—$37.5M compared to $175M in Q2—you’ll see that there’s a lot of energy going into building a sustainable psychedelic industry. More and more psychedelic venture capital firms and founders join forces to not just find good deals but to develop an industry that can use psychedelics to change lives.
Regulations are also taking a positive trajectory, albeit slowly. Given recent developments, Australia is making powerful moves to set the stage for the medical use of psychedelics, particularly for therapeutic applications. The US isn’t falling behind either. Some of the US states serve as test beds for psychedelic startups, from drug development to solutions on how to integrate these products and therapies into the healthcare infrastructure. The point is that the process of decriminalization at the Federal level isn’t the same as legalization; that’s why it may take a bit longer.
However, the remaining stigma and misconceptions make many psychedelic startups change their course from rapid growth to survival. Additionally, the M&A activity slows down. Before thinking about acquisitions, Big Pharma wants to make sure the success seen in clinical trials is due to the psychedelics themselves. Intellectual property isn’t as secure as it should be, given the delays of almost 18 months between filing a patent and getting it approved. Also, biotech companies care more about their cash nowadays due to the current economic climate. That’s why they are more likely to fund their main projects than acquire psychedelic brands.
What does it take to secure psychedelic investment?
As the psychedelic industry is still in its nascent stage and, what’s more important, is surrounded by stigma and misconceptions, psychedelic startups have to prepare for a bumpy fundraising ride.
If you plan to enter this market, especially if you’re a first-time founder, you must prove your treatment is safe and effective, protect your intellectual property, know how to outrun competitors, and have a team that can handle both the science and business to grow and scale.
You also have to demonstrate to investors that you have a product-market fit, a strong GTM strategy and business plan, and a compelling pitch deck.
Feeling overwhelmed with all the details? Reach out to the Waveup expert team for assistance.