Chai raises $130m for AI drug discovery platform

San Francisco startup Chai Discovery has said it is sitting on a valuation of around $1.3 billion, after raising $130 million in a Series B that will be used to build its computer-aided design (CAD) suite for drug molecules.

Chai – which is backed by artificial intelligence group OpenAI – was founded last year with a mission to "turn biology from a scientific discipline into an engineering practice."

Since then, it has launched a second iteration of its AI-powered discovery engine, Chai-2, and has advanced from designing 'minibinders' based on antibody fragments, through simple, truncated antibody sequences, to full-length monoclonal antibodies like those used in commercial therapies.

In a recent update, the company said its full-length antibodies are maintaining the hit rates seen in its early experiments, span dozens of designs, and have characteristics that suggest they should be easy to develop. It has already applied Chai-2 to some hard-to-drug targets, including six G-protein-coupled receptors (GPCRs) and a peptide-MHC complex. The company is claiming a 100-fold improvement over previous computational methods.

"While we are in the early innings of AI drug discovery, our models can already generate drug-like molecules with high success rates, including to challenging targets. But the Chai of today is just the start," said the company in a LinkedIn post. "This new round…will allow us to invest in more frontier research and fuel its deployment."

The sizeable second round, led by General Catalyst and Oak HC/FT, comes just a few months after a $70 million first round, according to the company, and will be used to accelerate R&D and expand its commercialisation efforts as it seeks early adopters among biopharma developers. Chai has also just launched a recruitment drive seeking to grow its team of interdisciplinary engineers, researchers, and scientists.

The Series B was also backed by existing investors, Thrive Capital, OpenAI, Dimension, Menlo Ventures, Lachy Groom, Yosemite, Neo, and SV Angel, with Emerson Collective and Glade Brook joining for the first time. It takes the total raised by the startup to more than $225 million.

"We're standing on the precipice of a new era for the biopharmaceutical industry," commented Josh Meier, Chai's co-founder and chief executive.

"We're in awe of the rate of progress on the models – what looked like five-year problems just months ago are now getting solved in weeks," he added.

"Our latest models can design molecules that have properties we'd want from actual drugs, and tackle challenging targets that have been out of reach."