- The psychedelics industry has ramped up over the past year as institutional investors entered and several companies have gone public.
- Insider identified the top 14 startups that are working to turn psychedelics into approved medicines for conditions like depression, opioid use disorder, and anxiety.
- To put together this article, we reached out to companies on our list from last year, used data provided by PitchBook, and talked to VCs in the space.
- Visit Business Insider’s homepage for more stories.
2020 was a booming year for the psychedelics industry.
Money swept through the private side of the space as big names like Atai Life Sciences closed record-breaking rounds of funding and more companies entered, hoping to take part in what could become a $100 billion market, according to a May 2020 report from Canaccord Genuity.
Psychedelics companies vary in their areas of focus. Many are developing psychedelics-based medications in the hopes of gaining regulatory approval, while others host psychedelic retreats in jurisdictions where they’re legal. Some are working to develop patented compounds or treatment methods that can be used by pharmaceutical companies.
Despite a pandemic and subsequent lockdowns, several psychedelics companies went public on Canadian exchanges, raising millions.
The 14 private companies on this list alone raised over $222 million in 2020. Some told Insider that they’re gearing up to go public. In March 2021, Atai raised a fresh $157 million, a record funding round for a private psychedelics company.
COMPASS Pathways, the biggest public company in the space, garnered attention from institutional investors like Otsuka while it was still private in the first half of 2020, marking a shift in the investor base for the industry. The company went public on the Nasdaq in September and currently has a market value of around $1.5 billion.
The November elections also revealed a shift in public perceptions of psychedelics and other illicit substances. Five states voted to pass cannabis reform measures, while Oregon became the first state to not only decriminalize the possession of all drugs but also pass legislation that would pave the way for psilocybin-assisted therapies.
To put together this list, we reached out to companies on our list from last year, used data provided by PitchBook, and asked investors JLS Fund and The Conscious Fund for information on startups in the space that are gaining investor interest.
Read more: Meet the top 9 startups raising millions to use psychedelics to treat depression, anxiety, and more
In total, Insider reached out to 23 private psychedelics companies to ask them how much funding they raised in 2020. We only included companies that remained private throughout 2020. We narrowed down our list to 14 companies, based on how much money they received from investors.
Note: This article was updated on March 3 with Atai’s raise.
Due to the novel nature of the psychedelics space, there isn’t yet one reliable data source that tracks all the private players in the industry. We did our best to reach out to as many sources as possible and cross-reference numbers provided by the companies with other sources. If you believe we may have left out someone, reach out to the author at ylee@businessinsider.com.