• Otávio Santiago

Investors are tripping on psychedelics startups despite a murky path to commercial success

Updated: Aug 19, 2021


This story is part one in a two-part series looking at the psychedelics drug development landscape. Check back tomorrow for part two, which examines the regulatory issues and clinical applications.


When attorney Dustin Robinson decided to parlay his expertise in psychedelics law into a venture capital firm that would invest exclusively in that growing field, he knew he would compete with several other VCs looking to invest in biopharma companies that are turning ketamine, magic mushrooms and other illicit drugs into therapies.


But he wasn’t worried. In fact, he picked up the phone and started talking to those VCs about sharing the deal flow.


“If you think about psychedelics, they’re all about unity. They bring a lot of oneness with the universe and with nature,” said Robinson, managing partner of Iter Investments, in an interview. “The VC world kind of reflects that.”


Robinson’s Fort Lauderdale firm launched in May with $15 million to fund psychedelics startups. And Iter was far from alone. There are now 18 venture capital firms—most of them founded in the last three years—that have poured more than $79 million into the psychedelics field so far, according to a recent analysis by Business Insider. Their investment picks span not just psychedelics developers but also companies that will support them, including ingredients manufacturers and chains of clinics where the drugs may have to be administered under strict supervision.

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