Psylo, a preclinical biotech company, has raised $5 million in Seed funding as it seeks to treat mental illness with naturally occurring psychedelic drugs.
The fresh capital comes 12 months after the Starting up in Sydney emerged Start mate‘winter 21 cohort with an initial $1.1 million in equity from Daniel Petre of Airtree in a round led led by Chris Hitchen’s global micro VC fund Possible companies.
Psylo recently joined the UNSW Founders SynBio 10x accelerator program and settled in college.
Last year, the former Australian federal government launched a $15 million fund for psychedelic clinical trials, and in July 2021, the… Psychiatric Institute, a $40 million psychedelic research center opened in Melbourne.
Psylo is focused on psychedelic therapy using psilocybin, the active molecule in “magic mushrooms,” and is increasingly being evaluated as a potential treatment for serious mental illness. The biotech startup hopes to initially develop a shorter-acting version of psilocybin, which normally takes 6-8 hours to act.
Ongoing research suggests that psilocybin is significantly more effective at treating major depression than existing options, and the startup is seizing its opportunity at a time when the pharmaceutical industry investment in mental illness clinical research programs fell by 70% in the last decade.
In the US, researchers have been exploring MDMA (the recreational drug known as ecstasy) as a treatment for post-traumatic stress disorder (PTSD) in studies that look set to receive approval from the US Food and Drug Administration next year.
Main Sequence Ventures, the deep-tech VC arm of the CSIRO, led the new round in Psylo, backed by US investor Lionheart Ventures, psychedelics-focused VCs Negev Capital and Empath Ventures, and New Zealand health care fund CaraMed Capital.
The startup’s Chief Scientific Officer, Samuel Banister, is formerly team leader in medicinal chemistry at the Brain and Mind Center at the University of Sydney.
The new money will be used to further explore potential drug candidates for clinical trials, which are approximately 18 months away.