This column looks back on my week with AI. Please read the previous article here.
Earlier this week, life sciences venture firm Dimension Capital said it had raised a new $500 million second fund, just two years after its first, to find startups that use artificial intelligence to develop new drugs. Announced.
This new fund is just the latest example of investor excitement about the use of AI in healthcare and biotech.
Venture funding for AI-related biotech and healthcare startups will reach just $4.8 billion in 2023, down significantly from 2022. But in 2024, funding for the space returned, with these startups raising $6.7 billion through early December, according to data from Crunchbase.
One might think that the general enthusiasm for artificial intelligence would mean that 2024 would be a new high for the intersection of AI and biotech/healthcare, but both 2021 and 2022 was a strong fundraising year for the sector. 2021 was a record year for venture capital investment overall, with $12.5 billion raised by AI-related biotech/healthcare startups.
Nevertheless, venture investors seem excited about use cases that leverage AI to discover new drugs, improve diagnostics, or even simply assist doctors with administrative tasks.
This year's largest AI biotech/healthcare rounds include:
In April, Xaira Therapeutics held the largest round in the space in 2024. The San Francisco-based biotech company made a private appearance to announce that it has secured more than $1 billion in committed capital from lead investors Arch Venture Partners and Foresite Capital. The two companies jointly developed the company. Xaira, which uses AI models to discover new drugs, is led by founding CEO Marc Tessier Lavigne. He previously served as president of Stanford University, but resigned last year after questions arose over some of his scientific research. In February, Abridge, which develops AI-powered clinical documentation tools, raised $150 million in Series C led by Lightspeed Venture Partners and Redpoint Ventures. The new round reportedly values the Pittsburgh-based startup at about $850 million. In June, EevolutionaryScale, a New York-based company that has developed large-scale language models for creating novel proteins, raised $142 million in seed funding. The round was led by Daniel Gross, Lux Capital, and Nat Friedman. Amazon Web Services and NVentures, the venture capital arm of Nvidia, also participated in the round. Finally, in October, Los Angeles-based Terray Therapeutics, a biotech startup developing small molecule drug therapies through an AI platform, received a Series B led by new investor Bedford Ridge Capital and existing investor NVentures. raised $120 million.
There's no question that AI is impacting nearly every industry, from defense to marketing to cybersecurity, and venture investors are betting big that biotech and healthcare will be no exception.
What caught our eye and more:
We've talked a lot about data centers in this space, and this week another related startup raised a significant amount of funding. London-based AI hyperscaler Nscale has raised $155 million in Series A led by Sandton Capital Partners. Founded only in May, the company develops sustainable AI-enabled data centers, deploys GPU infrastructure, and offers AI cloud services. AI cloud and computing services are booming, and so is funding for the ventures that provide them.
Related Crunchbase Pro list:
Related books:
Illustration: Dom Guzman
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