Ex-SignalFire Investor Raises $27.5M for AI Drug Fund
First-time fund managers are having one of their toughest stretches for raising money in years. Sahir Raoof still closed $27.5 million for Proximal Ventures, his first solo venture fund.
Backers and first checks
Proximal's backers include the VC firms SignalFire and Kleiner Perkins and Bertelsmann Healthcare Investments. Dimension Capital co-founders Nan Li and Zavain Dar put in money as individuals.
Proximal plans to back startups at pre-seed and seed stage, with checks from $500,000 to $1.5 million. It has already backed seven, among them ChronicleBio, co-founded by former OpenAI executive Fidji Simo. ChronicleBio applies AI to biological and medical data, aiming to understand chronic diseases and find possible treatments.
The bet: pharma buys services, not software
Drug companies hand many steps of development to specialist providers. The list runs from synthesizing thousands of molecular compounds to working out large-scale manufacturing and analyzing clinical trial data.
"For a long time, the assumption was that pharma is not a great buyer of software, but a really good buyer of services," Raoof told TechCrunch.
Raoof believes AI could automate much of this work. Startups could then deliver the same services at lower cost and in far less time, and win a share of billions of dollars in pharma spending, he said. He points to law and finance, where AI has so far found some of its most valuable uses.
Why investors trusted him
Amy Abernethy, co-founder of Highlander Health and a former principal deputy commissioner of the FDA, also invested. She met Raoof at Flatiron Health, where she was chief medical officer. She said his knack for building relationships and spotting industry bottlenecks left a lasting impression, and she is convinced he will make a successful investor.
She added that these qualities helped Proximal invest next to better-known, much larger funds.
Raoof spent two years as a principal at SignalFire. Earlier he ran business development at clinical trial recruitment startup Iterative Health and oversaw partnerships at Flatiron Health, an oncology data company that Roche bought for $1.9 billion in 2018.
Limited partners, the investors who fund VC firms, were reassured by his sales record, his grasp of the healthcare ecosystem and his industry relationships. They bet he could spot strong startups and help them win customers. Raoof says that for a company selling into life sciences, "one of the hardest things to do is starting that initial commercial flywheel."
Source: TechCrunch