Proximal Ventures Raises $27.5M to Back AI Startups in Drug Development

Proximal Ventures has raised $27.5 million for its debut fund, led by Sahir Raoof, a former SignalFire investor and executive at two healthcare startups. The firm is focused on startups bringing AI to the tools, infrastructure, and services that support drug development. The raise stands out because first-time fund managers are facing a difficult fundraising market, while established venture firms continue to attract capital.

Pharmaceutical companies have long outsourced parts of drug development to specialized service providers, including molecular compound synthesis, drug manufacturing scale-up, and clinical trial data analysis. Raoof’s thesis is that AI can automate much of this work, helping startups deliver similar services at lower cost and in less time. He sees an opening for AI companies to capture spending in pharmaceutical services, similar to how AI has gained traction in service-heavy areas like law and finance.

Proximal plans to back pre-seed and seed-stage startups with checks ranging from $500,000 to $1.5 million. The firm has already invested in seven startups, including ChronicleBio, co-founded by former OpenAI executive Fidji Simo. ChronicleBio uses AI to analyze biological and medical data to better understand chronic diseases and identify potential treatments.

Raoof previously worked at SignalFire, led business development at clinical trial recruitment startup Iterative Health, and oversaw partnerships at Flatiron Health, an oncology data company acquired by Roche for $1.9 billion in 2018. Proximal’s backers include SignalFire, Kleiner Perkins, Bertelsmann Healthcare Investments, Dimension Capital co-founders Nan Li and Zavain Dar, and Amy Abernethy, co-founder of Highlander Health and former principal deputy commissioner of the FDA. Abernethy told TechCrunch that Raoof’s relationship-building and ability to spot industry bottlenecks helped convince investors he could identify strong startups and help them land customers.