AI specialist Chai Discovery raises $400m
Fresh from signing an alliance with Novartis, Chai Discovery has raised $400 million in a third-round financing to support the further development of its AI-driven molecular design platform.
The Series C – led by Index Ventures and supported by Kleiner Perkins, Sequoia Capital, and Dimension – comes less than a year after the San Francisco start-up raised $130 million and $70 million, respectively, in second- and first-round financings, and raises its valuation to a heady $3.8 billion.
Founded in 2024 and supported by AI group OpenAI, Chai is now on the third iteration of its AI-powered drug discovery model, Chai-3, that has been described as a computer-aided design (CAD) suite for drug molecules, which can be used in preclinical work to "predict and reprogramme" interactions between molecules.
The latest version improves target success rates and binding affinity compared to its Chai-2 predecessor, producing antibodies that bind substantially more tightly to intended targets, according to the company.
When it launched last year, Chai-2 was claimed to be the first zero-shot generative platform for fully de novo antibody design to achieve double-digit experimental success rates. With Chai-3, it now has a platform that is capable of "unlocking targets that have long resisted traditional computational and laboratory methods, and turning them into tractable design problems."
The rapid development of the platform has been accompanied by a series of collaborations with big pharma groups, with Novartis signing up to use it earlier this week in a wide-ranging project to develop antibodies against multiple therapeutic targets. Earlier alliances have been formed with Pfizer and Eli Lilly.
"AI drug discovery has moved from promise to deployment, and Chai's models are already unlocking progress for our partners – enabling them to design better molecules, move faster against difficult targets, and take on challenges that traditional discovery methods have struggled to solve," said Joshua Meier, co-founder and chief executive of the start-up.
The endorsement of big pharma partners was instrumental in encouraging the investors to participate in such a big financing round, with Index Ventures partner Nina Achadjian noting that "the team aren't building toward real-world deployment – they're already there, with deployments already at the world's largest pharma companies."
New investors participating in the round included Bain Capital Ventures, Battery Ventures, Baillie Gifford, BDT & MSD Partners, Sapphire Ventures, and avra, along with a large tranche of Chai's previous backers.
