Proximal Ventures, a new venture firm led by former SignalFire investor Sahir Raoof, has raised $27.5 million for its first fund. It will back startups applying AI to the tools, infrastructure and services used in drug development.
The raise comes as first-time fund managers face one of the harder fundraising climates in recent years, even as established firms continue to attract capital.
Raoof's thesis rests on how pharmaceutical companies buy. They have long outsourced work to specialised providers, from synthesising large numbers of molecular compounds and planning drug manufacturing at scale to analysing clinical trial data. Raoof said the assumption was that pharma is a weak buyer of software but a strong buyer of services. He believes AI can automate much of that work, letting startups deliver the same services faster and at lower cost, and capture a share of pharmaceutical spending. He points to law and finance as service industries where AI has found some of its most valuable uses so far.
Proximal will invest at pre-seed and seed stages, with cheques of $500,000 to $1.5 million. It has backed seven startups, including ChronicleBio, co-founded by former OpenAI executive Fidji Simo. ChronicleBio uses AI to analyse biological and medical data to understand chronic diseases and identify possible treatments.
Raoof spent two years as a principal at SignalFire. He previously led business development at clinical trial recruitment startup Iterative Health and oversaw partnerships at Flatiron Health, the oncology data company Roche acquired for $1.9 billion in 2018.
Limited partners in the fund include SignalFire, Kleiner Perkins, Bertelsmann Healthcare Investments, and individuals such as Dimension Capital co-founders Nan Li and Zavain Dar. Amy Abernethy, co-founder of Highlander Health and a former principal deputy commissioner of the FDA, has also invested. She worked with Raoof at Flatiron, where she was chief medical officer, and cited his ability to build relationships and spot industry bottlenecks.
