Proximal Ventures, founded by former SignalFire investor Sahir Raoof, has raised $27.5 million for its debut venture capital fund to back startups developing AI-powered tools, infrastructure and services for the pharmaceutical sector. Artificial intelligence is creating new opportunities across the pharmaceutical industry, particularly in automating complex processes involved in drug development.
Despite a challenging fundraising environment for first-time fund managers, Raoof has secured funding by focusing on the potential of AI to transform traditional pharmaceutical services.
Pharmaceutical companies have traditionally relied on specialised service providers for several stages of drug development. These services include synthesising thousands of molecular compounds, developing large-scale drug manufacturing processes and analysing 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 a publication.
He believes AI can automate a significant part of these activities, creating opportunities for startups to tap into billions of dollars in pharmaceutical industry spending. By using AI, these companies could deliver existing services at lower costs and within shorter timeframes. Raoof also sees potential in pharmaceutical services similar to the opportunities AI has created in service-driven sectors such as law and finance.
Proximal Ventures plans to invest in pre-seed and seed-stage companies, with investments ranging from $500,000 to $1.5 million. The firm has already invested in 7 startups, including ChronicleBio, co-founded by former OpenAI executive Fidji Simo. The company uses AI to analyse biological and medical data, understand chronic diseases and identify potential treatments.
Before establishing Proximal Ventures, Raoof spent 2 years as a principal at SignalFire. He previously led business development at clinical trial recruitment startup Iterative Health and managed partnerships at Flatiron Health, an oncology data company acquired by Roche for $1.9 billion in 2018.
Highlighting the challenges of building businesses in the life sciences sector, Raoof said, “If you’re building a company that’s selling into the life sciences, one of the hardest things to do is starting that initial commercial flywheel.”
His experience in sales, understanding of the healthcare ecosystem and industry relationships helped build investor confidence in his ability to identify promising startups and support their customer acquisition efforts.
Proximal Ventures’ investors include venture capital firms SignalFire and Kleiner Perkins, Bertelsmann Healthcare Investments, and individual investors such as Dimension Capital co-founders Nan Li and Zavain Dar.
Amy Abernethy, co-founder of Highlander Health and former principal deputy commissioner of the FDA, is also among the fund’s investors. She first met Raoof while working with him at Flatiron Health, where she served as Chief Medical Officer.
Abernethy highlighted his ability to build industry relationships and identify gaps in the healthcare ecosystem. She believes his understanding of the market and these capabilities will support his growth as an investor. She also noted that these strengths have helped Proximal Ventures invest alongside several established and larger venture capital firms.
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