9 May

Billionaire Peter Thiel Bets Big on Psychedelics

With an explosion in investments across CBD and cannabis in the last 5 years, experts are tipping that psychedelics, and mushrooms specifically are the next white-hot startup sector to back. Peter Thiel, Facebook’s very first investor, has already placed a large bet on psychedelic startup ATAI.

Billionaire tech investor Thiel has led a $125 million funding round into a startup aiming to make psychedelic drugs to treat mental health disorders. Berlin based ATAI has now received funding of $210 million and describes itself as a platform set up to acquire, incubate and develop psychedelics that can be used to treat depression, anxiety, addiction and other mental health conditions. Almost a billion people suffer from mental health problems worldwide, according to the World Health Organization.

Legalization

There is talk that in the biggest global market, the US, psychedelic therapy may be further legalized under President Biden. This past election, Oregon legalized psilocybin therapy and decriminalized all drugs, while Washington D.C. decriminalized all plant- and fungi-based psychedelics. Since then, California State Senator Scott Wiener has begun drafting a bill to decriminalize psychedelics on the state level, four Hawaii state senators introduced a psilocybin therapy bill, and Florida State Representative Michael Greico has been working on legislation to legalize psilocybin therapy for people with a diagnosed mental health condition. Psychedelic insiders are optimistic that alongside local reform there will be federal movement towards ending prohibition, too.

Image via the Cannabis Investor

ATAI’s CEO Angermayer said that people “meet themselves” when they have a psychedelic trip.

“Since we’re born, society imposes on us how we should be, what we should look like...Psychedelics take away all these things which were imposed on us."
Angermayer

Where the Money’s At…

ATAI has also invested in Compass Pathways, which has developed a synthetic version of the active ingredient in magic mushrooms, psilocybin. Compass Pathways, which Thiel has also invested in, listed on the New York’s NASDAQ stock exchange in September and now has a valuation of around $1.3 billion. ATAI’s owns roughly 25% of Compass Pathways.

The plan is to take ATAI public next year at a valuation of between $1 and $2 billion, according to an industry source that asked to remain anonymous due to the nature of the discussions.

The Future Forecast

What is certain now, is that in the same way the cannabis market exploded, the use of psychedelics for mental health could be the next paradigm shifting sector to go mainstream. Given the immediate and long-term implications of the ongoing Pandemic on mental health and wellbeing only just beginning to surface, the opportunity is huge.

Investor interest in psychedelics is on the rise as high-profile executives and celebrities are investing in the sector’s future. With so much interest in alternative psychedelic medicine, analysts believe that the sector could bring in over $6.85 billion by 2027. However, government support and widespread legalization are essential for its rapid advancement. With the recent legalization of psychedelics in various US states, like cannabis, it seems a matter of time before the psychedelic sector creates sizeable venture returns.

Healthcare
Heath Tech
Innovation
Investments
Peter Thiel
Psychedelics