Proximal Ventures raises $27.5 million for AI drug development startups

Proximal plans to back pre-seed and seed-stage companies, investing $500,000 to $1.5 million per startup. It has already invested in six companies, including ChronicleBio, co-founded by former OpenAI executive Fidji Simo. ChronicleBio uses AI to analyze biological and medical data, aiming to improve understanding of chronic diseases and identify potential treatments.

Drugmakers have long relied on outside providers for work ranging from synthesizing molecular compounds and scaling up manufacturing to 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. He argues AI could automate much of that work, letting startups provide services faster and at lower cost while competing for billions of dollars in pharmaceutical spending. He pointed to law and finance as service industries where AI has already found valuable applications.

Raoof spent two years as a principal at SignalFire. Earlier, he led business development at clinical-trial recruitment startup Iterative Health and oversaw partnerships at Flatiron Health, an oncology data company acquired by Roche for $1.9 billion in 2018. Selling to life sciences companies requires building an initial customer base, he said: “one of the hardest things to do is starting that initial commercial flywheel.”

Proximal’s backers include SignalFire, Kleiner Perkins and Bertelsmann Healthcare Investments, as well 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, is also an investor. She previously worked with Raoof at Flatiron, where she was chief medical officer, and told TechCrunch that his relationship-building and ability to identify industry bottlenecks impressed her. Abernethy said those qualities and his understanding of healthcare needs could help him succeed as an investor.