Baltimore-based Catalio co-leads in $125M funding round alongside Peter Thiel

Alongside Peter Thiel and the family office of European entrepreneur Christian Angermayer, a Baltimore-based venture capital firm was among the leaders of a nine-figure funding round for a biotech company making psychedelics for mental health.

Catalio Capital Management, the biomedical-focused VC firm spun out of Camden Partners by George Petrocheilos and R. Jacob Vogelstein about six months ago, was one of three leaders of the $125 million Series C for ATAI Life Sciences.

It’s notable to see a Baltimore-based VC not just participating, but also leading a round alongside big names in tech. Locally, it’s the type of activity we normally see from the likes of T. Rowe Price.

Catalio recently closed on a $100 million fund at its hard cap. The size of this investment was not disclosed. (CNBC reported that Thiel invested $12 million.)

Along with Thiel, a PayPal cofounder who has gone on to become one of the country’s most recognized startup names, and Angermayer’s Apeiron Investment Group, the round included participation from Future Ventures and Galaxy Investment Partners, as well as new investors including Falcon Edge Capital and Pura Vida Pro, LLC.

ATAI was founded in 2018 by a group of entrepreneurs including Angermayer. It is described as a drug development platform that looks to acquire, incubate and develop new therapeutics that treat depression, anxiety and addiction. So it has partnerships with about 10 companies developing new treatments from psychedelics and other drugs.

“Christian and the ATAI team have singlehandedly invented and created an entire sector, and have built with ATAI the leading company in it,” Petrocheilos said in a statement. “Their work has the potential to change the lives of hundreds of millions of people, and we are proud to be an investor.”

Among those partner companies is COMPASS Pathways, in which ATAI has a share. Catalio also invested in the U.K.-based company, which went public in September. It is developing a synthetic version of psilocybin, and is working on clinical trials with local healthcare institutions like Johns Hopkins and Shepard Pratt.

It’s all part of work to harness psilociybin, which is the active ingredient in magic mushrooms, for mental health treatment. While they’ve long had recreational use, medical experts have shown more interest in applying magic mushrooms to their treatment. Hopkins is a leader in this work with an academic center based in Baltimore. Local residents are frequently intrigued to find calls for study participants, and playlists that have helped subjects along.

But the interest has extended to business growth, with a distinctly startup approach. In recent years, new high-growth companies have formed with a goal to bring the psychedelics to market, and VC firms fueling the push, just as they do for software companies. Catalio’s investments show Baltimore has a place in the business portion of the equation, as well as the research.