Mindstate is Pioneering the Psychedelic Renaissance, with $11.5M in Seed Funding
Today, nearly one billion people worldwide suffer from a mental health disorder. COVID-19 has, unsurprisingly, made matters worse; in the U.S, the prevalence of depression among adults has risen from 8% before the pandemic to 32% today. But here’s the good news: one of our portfolio companies, Mindstate, is confronting this crisis head-on, by designing new psychedelic-inspired drugs to enable the precision design of novel mental states beyond the scope of existing psychedelic therapeutics.
When we first heard about Mindstate’s work in psychedelic medicine, we jumped at the chance to partner with them early and lead their pre-seed alongside our partners Igor & Eugene Konstantinovsky from Masnavi Capital. Today, Mindstate emerged out of stealth with $11.5M in seed funding, led by Initialized Capital, with participation from additional investors including Y Combinator, Metaplanet Holdings, Negev Capital, Max Hodak, Naval Ravikant, Fred Ehrsam, Apoorva Mehta, Andres Bilbao, and Justin Kan. With funding under their belt and a vision to revolutionize healthcare propelling them forward, it’s an incredibly exciting time to be partnering with Mindstate.
“Partnering with K50 at the early stages has made all the difference for us. They are high-conviction, and they put in the time to equip their founders with invaluable resources. We wouldn’t be where we are if we didn’t have K50 on the team from the beginning.”- Dillan DiNardo, Mindstate Co-Founder & CEO
If we zoom out for a minute and take a look at the larger psychedelic landscape, there are a few factors that influenced our decision to invest so early. First, mental healthcare is in need of a makeover. Since the onset of the pandemic, it’s been difficult for many folks to receive the care that they need. Questioning the status quo of this industry is key to helping millions access high quality, more affordable health management. Second, Mindstate is in the business of discovery. We’re keen to push beyond the parameters of today’s healthcare systems and explore new territory in drug development and mental health treatments. This, of course, is Mindstate’s bread and butter. Third, and certainly one of the biggest factors, was the founders and the way they complemented each other. With Dillan’s background investing in biotech companies and Dr. Ray’s comprehensive research into the diversity of psychedelic effects — in the tradition of Alexander Shulgin, known as the “godfather of psychedelics” — we got really excited about what Mindstate was building.
We spent the months prior to investing in Mindstate meeting with multiple teams and developing a thesis around psychedelics. During that time, we determined that psychedelics had the potential for long lasting benefits for folks with certain mental health diseases. However, the industry was still lacking a more innovative approach that expanded on traditional research to deliver new psychedelic experiences without the negative side effects that MDMA, LSD, Psilocybin, and others produce. Most importantly, we were looking for teams that relied on scientifically sound research, were business-oriented, and knew the importance of thinking outside of the box — a killer combination that’s often hard to find.
That’s why we were so excited to meet Tom and Dillan: a dream duo that checked every box. After meeting the team, we spent several months learning more about the space, diving deep into their research and getting to know both founders on a personal level. The science was exciting, robust, and exactly what we were looking for in the psychedelic space — which led us to leading their $1M pre-seed round. Ultimately, our check catalyzed a subsequent seed round of $10.5M.
Of course, Mindstate isn’t the only company pursuing breakthroughs in psychedelic medicine. Companies like Compass Pathways, Atai, and Field Trip Health are all established players in the space and Bexson, Tactogen, and Delix are all companies to look out for. Importantly, regulations around psychedelics are loosening in the US, and new legislation supporting this kind of research is already being proposed in states like Missouri, Virginia, Colorado, California, New York, Florida, and Michigan. As laws and public perception of psychedelics shift, this nascent field will only continue to grow.
It’s the beginning of a new era in medicine, and one we’re thrilled to be a part of alongside Mindstate. If you’re a founder with similar ideas about how to revolutionize the medical industry with psychedelics, we’d love to hear from you. Reach out to ryan@k50ventures.com.
