Superseeder: psychedelic biotech Psylo plants $12 million in latest ‘Seed’ round

- June 4, 2024 2 MIN READ
Joshua Ismin and Samuel Banister
Psylo cofounders Joshua Ismin and Samuel Banister
Sydney biotech startup Psyslo has banked a fresh Seed round worth US$8 million (A$12m) as it relocates to the US.

It’s Psylo’s second major Seed round, having previously banked a A$5 million Seed raise in late 2022 on top of an initial $1.1m 12 months earlier as the company emerged from Startmate.

The latest round was led by Australian health-focused VC Tenmile with participation from Palo Santo, existing investor Focalpoint Ventures (formerly Empath), Mystic Ventures, and Gaingels, as well as the M8 Ventures syndicate run by Alan Jones and Emily Rich on Aussie Angels.

Psylo has developed psychedelic-assisted therapy. It began by exploring using psilocybin, the active molecule in ‘magic mushrooms’ to treat severe mental illness, but has gone on to find more sophisticated solutions. Its flagship product PSYLO-100X, is non-hallucinogenic for depression and other mental health disorders.

The new funding was announced at the BIO Conference in San Diego as the business moves offshore to become a US Delaware C-corp, joining the likes of Canva and Atlassian. 

It’s earmarked for ongoing investment in their drug discovery platform, and to advance PSYLO-100X through IND enabling studies, with the goal of initiating first in human clinical trials in 2025.

CEO Joshua Ismin said PSYLO-100X is different from first-generation psychedelics by eliciting neuronal remodelling without causing hallucinatory effects.

“This capital raise underscores strong confidence in Psylo’s unique translational approach and the therapeutic potential of our pipeline,” he said.

“Our platform has yielded a non-hallucinogenic candidate designed to be safely administered at home without clinical supervision, and serves to advance our mission to address the mental health crisis for a broader patient population.”

Tenmile MD Dr Steve Burnell said they were “incredibly impressed with Psylo’s progress” and approach to addressing mental health disorders.

“We are pleased to be investing in Psylo and are confident in their ability to advance PSYLO-100X, which we believe has the potential to make a significant impact in the neuro space.”

Dr Samuel Banister, Psylo’s chief scientific officer, and a former team leader in medicinal chemistry at University of Sydney’s Brain and Mind Centre, said they’re hugely encouraged by the startup’s progress following three years of drug-discovery

“PSYLO-100X is a non-tryptamine, non-phenethylamine compound with a hugely promising preclinical profile,” he said.

“We believe this novel approach marks a significant leap forward in developing safer, more effective treatments.”

The biotech company continues its Australian links with a lab at the University of New South Wales in Sydney as well as one at the University of Colorado Boulder.

Psylo was part of the UNSW Founders SynBio 10x accelerator program in 2022. Its cap table includes AirTree cofounder Daniel Petre, and CSIRO-backed VC Main Sequence Ventures.