A new venture capital fund in Chicago is backing startups that use psychedelics in medicine.
Palo Santo, founded in 2020 and officially launched this year, is a VC fund targeting psychedelic and psychedelic-adjacent therapies.
It has raised $35 million in capital and invested in 20 portfolio companies. Its investments include Atai Life Sciences, a Peter Thiel-backed startup that went public in June with a market value of $3.2 billion.
The fund, founded by Daniel Goldberg, Tim Schlidt and Tony Eisenberg, aims to back startups that are working in the nascent field of psychedelic therapy to treat mental health issues.
Palo Santo says it's investing in early-stage, high-growth companies working within biopharma, drug development, digital therapeutics, health care services and other tech solutions.
The startups it backs are using psychedelics to treat depression, PTSD, anxiety, OCD, addiction, chronic pain and other conditions, the company said.
In recent years, psilocybin, the naturally occurring substance found in psychedelic mushrooms, has been found to be effective in treating a range of conditions, including depression.
Chicago-based company Wesana is among the local companies working to develop therapies that incorporate psilocybin. Led by former Blackhawks player Daniel Carcillo, Wesana went public in Canada earlier this year.
Palo Santo has added a handful of scientific advisors to its team, including David Sherman, the head of the University of Michigan psychedelic collective, and John Greden, chair emeritus of the University of Michigan Department of Psychiatry and the founder of the University of Michigan Depression Center.
