How Capital Markets Are Fueling Psychedelic Medicine Growth

Opinions expressed are solely those of the author and do not reflect the views of Rolling Stone editors or publishers.

The psychedelic medicine industry is growing. 2011 was a seminal year for the space, with advancements in a variety of sectors. There was a wave of new psychedelic firms going public, with big names like MindMed and Atai Life Sciences listing on major stock exchanges like the NASDAQ, and increased acceptance of psychedelics by institutional investors.

As 2022 gets rolling, I expect the upcoming year to continue to add to the evolution of the industry. But what will catalyze this continued growth? From my perspective, a variety of forces. I’ve handled PR for the largest publicly traded companies in psychedelics for two years now and own a business publication that focuses on psychedelics. We’re seeing a seismic shift in the sector, from grassroots advocacy for decriminalization to media outlets educating the public and destigmatizing psychedelics. And then, of course, there’s capital.

In our capitalist world, few things open doors like access to funds. It’s the fuel that lights the way, allowing scientists and researchers and entrepreneurs to build an entirely new industry.

Investors Are Driving the ‘Shroom Boom.’

A recent market research report published by CB Insights showed that funding for psychedelic medicine companies was on track to surpass $700 million in 2021, more than eight times higher than 2019’s numbers and getting close to doubling 2020’s figures.

Here are some major 2021 financing deals from top public companies:

• Atai Life Sciences raised $225 million with its $2.3 billion IPO this summer.

• MindMed has raised a total of approximately $202.7 million.

• Compass Pathways raised an additional $144 million in 2021, adding to its already healthy bank account.

Private Firms Are Also Raising Capital.

While most industry news and market headlines are dominated by publicly-traded companies, they’re not the only source of capital investment. Private psychedelic medicine companies are also garnering a lot of attention from investors.

• In August 2021, Beckley Psytech, a private company “dedicated to addressing neurological and psychiatric disorders through the novel application of psychedelic medicines,” announced an $80 million Series B financing from venture capital (VC) investors.

• In September 2021, Delix Therapeutics closed a $70 million Series A financing round. Delix is a private neuroscience company focused on “psychoplastogens,” or neuroplasticity therapeutics.

• In April 2021, GH Research announced the closing of $125 million in financing, an impressive number for a private preclinical firm. GH has since gone public on the NASDAQ.

These are just some recent capital raises by private firms (not forgetting that Atai Life Sciences raised approximately $360 million from private investors before going public). This funding is being driven by innovative and…