Although mature venture capital firms continue to attract funds, the current fundraising environment is one of the most challenging in recent years for managers setting up funds for the first time. However, this has not stopped Sahir Raoof, a former investor and executive who has worked at two medical startups, from raising $27.5 million for his first independent venture capital fund.
The company Raoof, which is Proximal Ventures, can transform the tools, infrastructure, and services that support drug research and development.
Pharmaceutical companies have always outsourced multiple stages of drug development to professional service providers, from synthesizing thousands of molecular compounds and researching how to achieve large-scale drug production to analyzing clinical trial data.
"For a long time, the default assumption was that the pharmaceutical industry was not a good buyer for software, but rather a good buyer for services," Raoof told TechCrunch.
Raoof believes that AI can automate a large portion of this work, creating opportunities for startups to reap billions of dollars from the spending in the pharmaceutical industry. By using AI, these companies can provide the same services at lower costs and in less time, he said.
Raoof indicates that, so far, some of the most valuable applications of AI have emerged in service industries such as law and finance. He believes that similar opportunities also exist in the field of pharmaceutical services.
Proximal plans to invest in seed and early-stage startups, with each investment ranging from $500,000 to $1.5 million. The company has already invested in 6 startups, including ChronicleBio. ChronicleBio was co-founded by former OpenAI executive Fidji Simo, and utilizes AI to analyze biological and medical data in order to better understand chronic diseases and identify potential treatment options.
Before serving as a partner at SignalFire for two years, Raoof was responsible for business development at the clinical trial recruitment startup Iterative Health; even earlier, he was in charge of partnerships at the oncology data company Flatiron Health. Flatiron Health was acquired by Roche in 2018 for $1.9 billion.
"If you're building a company that sells to the life sciences industry, one of the most difficult things is to get the initial business momentum going," says Raoof.
His sales capabilities, profound understanding of the medical ecosystem, and extensive industry connections convinced the limited partners—i.e., the investors of the venture capital fund—that he was capable of identifying outstanding startups and helping them acquire customers. Supporters of Proximal include SignalFire, Kleiner Perkins, Bertelsmann Healthcare Investments, as well as individual investors such as Dimension Capital's co-founders Nan Li and Zavain Dar.
Co-founder, former Deputy Director of FDA; she is also one of the investors. She first met Raoof during her tenure at Flatiron Health, where she served as the Chief Medical Officer. She told TechCrunch that Raoof's ability to build relationships and identify industry bottlenecks left a deep impression on her. Abernethy believes that these abilities, combined with his understanding of the medical market demand, will make him a successful investor.
She added that it is these qualities that help Proximal invest in startups alongside some more well-known and larger funds.
