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Venture Fund to Support Seed-Stage Biotechs

KdT Ventures management

KdT Ventures partners and principals, left to right, Rima Chakrabarti, Phil Grayeski, Cain McClary, Mack Healy, and operations chief Ally Gudeman (KdT Ventures, Medium)

23 Mar. 2021. A venture capital company raised $50 million to invest in new businesses developing innovative products and services at the junction of biology and engineering. KdT Ventures in Austin, Texas says its new Fund II is backing entrepreneurs that aim to solve difficult problems with solutions that bring together data, engineering, and science.

KdT Ventures aims to invest in start-ups with solutions addressing unmet needs in what the company calls frontier science, where the worlds of biology and chemistry meet tools adapted from engineering and mathematics. Moreover, the company seeks to fund businesses in the earliest stages of development, or as they state in their manifesto, “We are often the first check into a company.” KdT raised $15 million for its first fund in 2018, according to Crunchbase, and today funds 24 enterprises in biotechnology, life sciences, therapeutics, and diagnostics, with a focus on computational tools or solutions.

Among KdT’s portfolio companies are Dyno Therapeutics in Cambridge, Mass., a spin-off enterprise from the Wyss Institute at Harvard University. Dyno designs synthetic viruses with artificial intelligence to deliver gene therapies, to overcome the limitations of natural adeno-associated viruses often used for gene therapy delivery. As reported in Science & Enterprise in May 2020, Dyno Therapeutics licensed its technology to drug makers Novartis and Sarepta Therapeutics in deals that could bringin as much as $2 billion.

Another KdT portfolio company is Rejuvenate Bio in La Jolla, California, a developer of gene therapies to reduce or reverse age-related diseases, starting with heart failure. As reported by Science & Enteprise in February 2020, its lead product is a gene therapy addressing a condition called mitral valve disease that affects dogs as well as humans.

Fill the gap between SBIR and series A

KdT Ventures says its $50 million Fund II aims to fill the seed-stage financial gap between Small Business Innovation Research grants set-aside in U.S. government agency science budgets for small U.S.-based companies and a company’s first full venture round, called series A. Investments range in size from $750,000 to $1.5 million, usually as leaders of financial syndicates in seed rounds, but also filling out other investor groups.

In an interview with Crunchbase News, KdT’s managing partner Cain McClary and principal Rima Chakrabarti outlined the kind of companies sought for Fund II that include engineering and fabrication of genes into programmable forms like circuits applied to therapeutics, agriculture, and chemicals, as well as biomaterials for delivering therapies and design of biological systems for consumers.

Before investing, KdT Ventures says it closely investigates portfolio prospects. KdT says it not only asks for details about a new start-up and its business plans, but also how the company plans to “take over the world.”

If everything went right, what would the company look like? How does this asset become a platform, dwarf and eat competitors, and most importantly move the world forward (and retain the value it creates)? Even if only for a couple of minutes, sketching this scenario out allows us to live for a second in the entrepreneur’s shoes and see their vision of the world through their eyes.

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