Vine Ventures was founded in the wake of a debilitating global shadow pandemic: the mental health crisis, catalyzed by Covid-19. We launched with a mission to drive the emergence of innovative solutions for mental health and wellbeing. One of our primary goals is to foster the sustainable roll-out of psychedelic therapies, powered by cutting-edge research from the renaissance in academic and clinical studies.
Over the past two years, Vine has invested $20M into 32 early-stage companies seeking to advance novel modalities for mental health and wellbeing. We are committed to giving back to society, having contributed $1M to philanthropy as a part of our reciprocity pledge to donate 50% of GP profits.
As a testament to our vision for the field, we proudly led the Regenerative Financing Vine, an SPV raising almost $45M for MAPS to bring MDMA to market for the treatment of PTSD. Their pioneering effort will foster an open ecosystem for entrepreneurs to innovate, furthering our shared goal of reimagining how we cure the sick and better the lives of the well.
In March 2021, we publicly announced Vine’s first fund and outlined our founding principles and predictions for the psychedelics industry. Many of these early predictions have come true:
“CACAO markets” (Canada, California, Colorado, and Oregon) will lead the way towards liberalization. Though obvious now, it was much less clear how regulatory progress would unfold in early 2021. In Canada, Alberta has legalized regulated use while British Columbia has decriminalized psychedelics. In the US, Oregon and Colorado are the first states to pass laws creating the first regulated adult-use markets. California is on course to decriminalize state-wide following the path of several of its major cities. In the footsteps of these first movers, active legislation is currently being pursued in over a dozen additional states. The phenomenon is expanding globally - most recently, Australia announced the rescheduling of psilocybin and MDMA for approved therapeutic use starting in July of this year.
Consumers and patients want more than a hyper-medicalized future; a portion of the demand profile will prefer naturals. In Oregon, where the US’ first regulated adult-use psilocybin market is currently being established, the law actually requires the use of natural psilocybin rather than synthetics. Colorado’s recently passed Proposition 122 has it in the name itself - the “Natural Medicine Health Act.” Synthetic compounds will serve a crucial role in psychedelic care, but it’s increasingly clear they will not be the only option.
Generics will come sooner than anticipated and value will begin to accrue downstream. Our perspective holds that we will see the proliferation of generics much faster than most anticipate. MAPS’ data exclusivity strategy around MDMA will prove that a true understanding of the therapy component of psychedelic-assisted therapy is as effective of a moat as a patent. Generic markets for MDMA will open up quickly, providing greater access at competitive pricing with widespread insurance coverage. Companies attempting to secure patents on prior art without truly novel adaptations will continue to face IP battles (e.g., Compass vs. FTO). Value has been more distributed across the value chain than venture capital deployed, and we expect that trend will continue as the need for more infrastructure solidifies.
As we look ahead, we have more conviction than ever that the two most pressing problems facing humanity are mental health and aging. Mental health issues continue to compound, which have renewed attention to and investment in psychedelics and novel neurotechnologies. Understanding the human mind and the right tools at our disposal to improve it remains one of the most complex but promising challenges of our time. In parallel, it has become clear that the largest problem we face as a species is aging. Longevity therapeutics present a proactive solution to targeting the real root cause of diseases (and eventually death), which is aging. We’re energized by the potential to dramatically change what’s possible for human health and wellbeing.
The paradigm shifts in how we approach mental health and aging will require significant funding. Venture capital can be a force multiplier in proving out the efficacy of these treatments and scaling them globally, but the venture landscape is changing considerably. Venture through the 2010s prioritized growth over being default alive. Moving forward, businesses scaling with positive unit economics will be favored. We’ve doubled-down on companies like Othership who have demonstrated an ability to find product-market fit and execute from a cash flow positive position. In early-stage drug development, we’re often investing before revenue is generated, though in these cases we still recognize the heavier emphasis on deep due diligence. We remain steadfast in leaning into the scientific evidence, which is especially important in frontier, nascent fields.
Vine was born out of a deep connection with psychedelics and their healing potential. Our fund’s name comes from the Banisteriopsis caapi vine, a core ingredient of Ayahuasca. When we first began tracking the psychedelics industry in late 2018, we documented just 6 organizations. Over 4 years and a cambrian explosion of activity, we’ve come to track nearly 1000 psychedelic companies which have fed our mental map of the psychedelic value chain. In 2021, psychedelics traveled up the hype cycle and peaked at a market size of roughly $12B, before crashing down into the trough of disillusionment in early 2022. Today, the market has a value just south of $7B:
Value has consolidated substantially. Only four public companies retain a value north of $100M in the current market, and none of them are trading at more than 3x their cash position. The 20 most valuable drug development companies, both public and private, account for 90% of the category’s total value. This may be an incredible buying opportunity for well-capitalized companies and investors, and we expect to see an uptick in M&A in the second half of this year.
Regulation is the predecessor to progress. As of this writing, a supervised adult-use psilocybin market is operating legally in Oregon. Colorado is sorting the details for a 2024 launch. A recent analysis published in JAMA Psychiatry applied marijuana legalization timeframes to predict that a majority of US states will legalize psychedelics by 2034 to 2037. Legal access enables the collection of quality real-world data outside of the limited scope of clinical trials. As markets continue to open, we look to the allegory of the cannabis industry for indications of outsized growth and value accrual.
The middle of the value chain takes center stage. On the back of MAPS’ successful Phase III readout, it’s widely expected that MDMA will become the first federally-legal psychedelic since ketamine, expected in Q1-2024. The foundations of a national psychedelic care ecosystem will emerge around MAPS’ rollout. On the cusp of legal tailwinds and the fact that value continues to accrue more evenly than venture dollars in, we anticipate more opportunities to innovate in the middle:
Conscious community is the modern religion. The psychedelics movement goes far beyond drugs - it’s part of a cultural revolution to change our relationship with our mental health. The communities that evolve over the next decade will be some of the most valuable networks on the planet, and a defining opportunity in venture in the 2020s. Othership has generated a cult-like following bringing new healing modalities to the mainstream with simple hot-cold therapies, often frequented by psychonauts.
Next-generation psychedelics. We anticipate new opportunities in modified compounds that are cheaper, safer, more effective, and more accessible. Companies like Gilgamesh, Tactogen, and Delix (among many others) are pursuing varying strategies to develop NCEs - whether early animal evidence will translate to humans is an open question.
We like to say that psychedelics were the original neurotechnology. In recognition that a large part of the mental health equation will come from neurotechnology, we’ve added nearly 400 additional companies to our industry radar. Rapid scientific progress in this field is turning what was once science fiction into real-world applications, and psychedelics are just one of many tools in fighting the mental health pandemic we’ve unleashed onto our society.
The neurotechnology landscape is already large, with a market capitalization north of $64B. We consider five core domains for investment:
Outlier value creation will come from enabling technologies. We observe that the neuropharmacology segment is highly mature with established biotech pipelines targeting major psychiatric and neurodegenerative disorders. Significant opportunity remains with enabling technologies. We believe that intelligently deploying in a balance across these developing categories provides the right risk-adjusted approach for an emerging field like neurotechnology.
High-resolution brain mapping and precision psychiatry. You can’t manage what you can’t measure; rudimentary depression scales and limited imaging techniques have kept psychiatry in the dark. Today’s most common practice is trial-and-error with antidepressants. Next-generation imaging that provides high temporal and spatial resolution without sacrificing safety, portability, or affordability will enable new brain biomarkers and access to more data. Alongside improvements in brain imaging, we’re excited by solutions like Alto Neuroscience that combine brain function measures like EEG with behavioral tests to stratify patients and develop targeted therapeutics. Depression is not a monolith, and personalization of treatment is long overdue.
Treatment without pharmaceuticals. Altering brain activity without drugs may be a promising alternative. Many companies are developing more scalable forms of interventions like transcranial magnetic stimulation (TMS) or transcranial direct current stimulation (tDCS). Some neuromodulation can also aid in drug delivery or diagnostic retrieval, such as Cordance Medical’s cap that uses focused ultrasound to create temporary, targeted openings in the blood brain barrier.
Brain-Computer Interfaces (BCIs) - from medical miracle to the next computing platform. BCIs are the holy grail of neurotechnology, and where we see outsized potential to impact the world. As of today, two companies have implanted BCIs in humans - Blackrock Neurotech with the Utah Array, a neural implant with over 100 electrodes, and Synchron with its stentrode, a set of 16 electrodes fashioned around a blood-vessel stent and threaded through the jugular vein to the top of the motor cortex. BCIs today can control prosthetic limbs, restore sensory perception, and treat neurological disorders. As devices become safer and cheaper and the machine learning that translates neuronal activity advances, BCI use cases extend far beyond medicine. This is a generational opportunity to back the next computing platform. Human augmentation with BCIs is an inevitability - when and how we’ll get there depends on the entrepreneurs paving the way.
Of the ten leading causes of death in the United States, nearly all (barring Covid-19 and unintentional injuries) have a common thread: aging. As we age, the risk of almost all major diseases increases exponentially. There is mounting scientific evidence that it may be possible to slow, stop, or even reverse the aging process. That’s ultimately the goal of longevity drug developers: to extend lifespan, and more importantly to extend healthspan (the number of years of healthy living). We’ve already proven that we can increase healthy lifespan in mice by over 35%. Aging researcher and investor Laura Deming has documented 95 interventions that make mice live longer and 70 drugs in the clinic that have the potential to prevent and treat age-related diseases in humans.
Longevity is hitting the hype cycle as venture wakes up to the fact that aging is both the largest problem facing mankind (with 100% global TAM) and the least price-sensitive market in history. There is tremendous opportunity for value creation with over 85% of US healthcare costs attributable to chronic diseases - even a minor delay in onset of aging-related diseases could save billions. Since tracking the longevity space, we’ve documented nearly 300 companies worth a combined $34B in value. We categorize opportunities into three buckets:
Best-in-class regenerative medicines that target hallmarks of aging. In 2013, Cell published a landmark paper outlining what have become popularized as the nine hallmarks of aging. In January 2023, 10 years after the initial paper debuted, an expanded framework of 12 hallmarks was published, highlighting the emergent nature of this category. The hallmarks will continue to evolve but provide a helpful framing for the underlying mechanisms that contribute to the onset of aging-related diseases.
Scientific breakthroughs such as the discovery of Yamanaka factors in 2006 and the development of gene editing tools like CRISPR in 2012 have sparked an influx of new approaches. This has accelerated the emergence of companies developing therapeutics to target aging, whether focusing on a single hallmark like senolytic drug developers Deciduous and Rubedo, or developing a broader portfolio of assets targeting many hallmarks, such as Cambrian and Rejuveron.
Longevity’s North Star: an FDA-approved indication for aging. In clinical trials, the FDA and drug developers must align on a specific indication to target. The goal is to make aging itself the indication to enable drugs to be proactively prescribed if proven to slow down aging, but that future is still far off. Today, drug developers target aging indirectly by focusing on indications associated with aging, such as neurodegenerative or cardio-metabolic disorders. Creative approaches are being pursued from different angles to move the needle here. Most notable is the TAME trial, which is testing whether taking metformin delays the development or progression of age-related chronic diseases. As Cambrian’s CEO James Preyer puts it, longevity drugs are really just “multimorbidity preventatives.” Because aging trials in humans would inherently take decades to show results, it’s essential to have surrogate biomarkers to measure biological aging. Several groups are developing biological aging clocks as a result, such as Altos Labs’ Dr. Morgan Levine who developed a new epigenetic biomarker using DNA methylation from whole blood to predict phenotypic age. Other consumer-oriented aging clocks have been developed by companies like David Sinclair’s Tally Health and Deep Longevity.
Creativity in longevity will untap massive, overlooked markets. Loyal is developing longevity drugs for dogs as a precursor to humans, taking advantage of their shorter lifespans and more relaxed drug approval pathways. Fauna Bio takes inspiration from hibernating mammals. Their platform identified cellular pathways critical to cold resistance in hibernating squirrels who consistently rebound from dozens of rounds of cold damage with near perfect regeneration - now they’re working on treatments that modify those same pathways in humans. Reproductive health is another compelling area led by researchers like the Buck Institute’s Jennifer Garrison. While women have longer lifespans, they have shorter healthspans, and quality of health drops significantly post-menopause. Companies like Gameto are developing reproductive health therapies and questioning whether or not menopause is a biological imperative.
New technologies applied to longevity drug discovery. Companies like Insilico Medicine and BioAge Labs are applying AI to analyze human aging trajectories and identify new targets, develop novel molecules, and improve clinical trial design. Advances in cell therapies will also necessitate advances in cell manufacturing - bit.bio manufactures a variety of defined human cells reprogrammed from induced pluripotent stem cells (iPSCs). The “DeSci” movement, led by organizations like VitaDAO, builds communities focused on advancing research, decentralized clinical trials, and IP-NFTs.
Venture capital is undergoing a sea change that will favor smaller funds with a niche focus, where fund managers can comprehensively survey their markets, identify outlier founders, and provide contextually valuable support. It will be increasingly important to strike a balanced portfolio with cash flow positive, default alive positions and high-conviction, underestimated bets in big markets.
Vine has studied the psychedelics, neurotechnology, and longevity markets and built deep relationships in each field. Our expanded focus hedges the psychedelic market’s slow emergence from the trough of disillusionment by capitalizing on the ascent of neurotechnology and longevity up the hype cycle:
Doubling down on reciprocity. Since our founding, philanthropy has been a hallmark of the work we do at Vine. We have structured a reciprocity fund that donates a portion of GP profits that increases commensurate with our return profile. At 2x DPI, 20% of GP profits will be donated, moving linearly up to 50% of profits donated at a 5x DPI. As fund managers, this aligns our philanthropy with our inherent incentive to maximize returns for our LPs. We’ve observed that engaging in reciprocity inadvertently leads to improved dealflow (a majority of our portfolio founders cite our reciprocity as a reason to partner with us) and contributes to rising tides by reinvesting in the research and organizations pushing these emerging domains forward.
We are particularly interested in entrepreneurs, scientists, and builders who are working on projects that have the potential to make a significant impact on mental health or aging. If you are creating something important and believe that it could benefit from our support and resources, we encourage you to get in touch with us. Whether you are just starting out or are well on your way, we want to hear from you. Let's work together to create a world that feels impossible today.
