Beakers, biohacking, & building in basements

VCs are falling in love with science - again.

Author

Sohila Zadran
September 03, 2024

Happy Tuesday Brex community,

When Brex asked me to guest-write this special Life Sciences edition of the newsletter, I knew I had to dedicate it to the fearless scientist founders out there. Maybe they’re reading this from their university’s basement lab or perhaps from their parents’ garage as they run next-gen CRISPR experiments. Wherever they are, we know they’ve got lab coats, pipettes, and big dreams. As a scientist, founder and investor, I recently became a Brex Ambassador to help build the newly formed Life Science practice! - Sohila Zadran, PhD 

VCs are falling in love with science - again.

Lets face it, funding is the rate limiting factor for every founder - and it’s brutal out there.  In a 2024 report, by Bessemer, venture investment in the life science and bio sector is down more than 50% from its peak in 2021.  Even the grants are not granting. NIH’s SBIRs funding rate is less than 19%.  They say it is always darkest before dawn. Well, science founders have been patiently sitting in the dark for almost three years now. 

However, VCs have seemingly started to rediscover their crush on life sciences. And who can blame them? Gene therapy, personalized medicine, and biotech are the new innovations that promise to change the world. And science isn’t just good for humanity—it’s good for business.  Just this week, for example, Sequoia Capital, Viking Global and Fraizer backed newly funded GondolaBio's $300M round - shout out to my fellow scientist colleague Neil Kumar!  A few months ago, Xaira Therapeutics, an AI drug discovery startup, was launched with more than $1 Billion in funding co-led byArch Venture Partners and Foresite Capital.

  • Brex Connect 9/10 in NYC

    Designed as private evening gathering of VC backed founders and General Partners of VC firms to celebrate the growing NYC startup community. If you raised a VC round in 2024 or lead a VC firm, please email the host at [email protected] to learn more

    Brex Host: Shai Goldman

  • Brex Supper Club 9/12 w/ Haven in NYC

    Designed as a private conversational dinner for seed stage founders

    Apply Here Brex Host: Michael Morgenstern

  • Brex Supper Club 9/16 in Brooklyn

    Designed as a private conversational dinner for Brooklyn founders and investors

    Apply Here Brex Host: Michael Morgenstern

  • Brex Social Club 9/18 in Atlanta

    Designed as a mixer for AI Founders and future founders at Georgia Tech.

    Apply Here Brex Host: Michael Morgenstern

  • Brex Supper Club 9/19 in Boston

    Designed as a private conversational dinner for climate focused Founders in Boston

    Apply Here Brex Host: Shai Goldman

  • Brexfast Club - Climate Tech Week 9/24 in NYC

    Designed as Brexfast for Founders and VCs in the climate space

    Apply Here Brex Host: Shai Goldman

  • Brex Supper Club 10/1 in Austin

    Designed as a private conversational dinner for Austin founders and investors in the hard tech space

    Apply Here Brex Host: Michael Morgenstern

I’m featuring two startups this week because I couldn’t pick just one. 

Up first: Revea Skin

The convergence of technology and biology is creating new opportunities in fields like computational biology, AI-driven drug discovery, and synthetic biology. One standout example is Revea Skin, founded by Chaz Giles, the former Head of Innovation at Estée Lauder. Revea landed $6 million in a Seed II funding round led by Alpha Edison with participation from Ulta Beauty, Waldencast Ventures, GISEV, Verlinvest, and Kathaka.  Revel Skin leverages cutting-edge technology and precision medicine to revolutionize skincare. Chaz Giles is the Founder & CEO of Revea

Revea leverages cutting-edge technology and precision medicine to revolutionize skincare designed for each individual’s biology.

Revea, founded by Chaz Giles, is the former Head of Innovation at Estée Lauder. Revea landed $6 million in a Seed II funding round led by Alpha Edison with participation from Ulta Beauty, Waldencast Ventures, GISEV, Verlinvest, and Kathaka. 

And then: Kazadi Enterprises. 

Recently I had the privilege of meeting scientist founder Sanza Kazadi. Kazadi, PhD. Dr. Kazadi is a graduate of the California Institute of Technology, having received his BS in Physics in 1995 and his PhD in Computation and Neural Systems in 2000. He has been issued seven patents in the renewable energy space, and his research is backed by the National Science Foundation, the Department of Energy and Venture for Climate Tech.  We talked about his work, how it could possibly be the solution to help keep data centers and server farms cool.  We shared war stories from research days at Caltech, the struggles of raising in the current environment and how expensive it is to build science companies. Science isn’t cheap, and neither is running a startup. On our zoom call, he undid his zoom background filter to show the inner working of his lab - built in his basement. Building a lab in a basement is a testament to pure determination and ingenuity (see actual image from the basement lab).

Ambassadors Perspective: If you’re a science nerd who also loves coding, congratulations—you’re in demand. The convergence of technology and biology is creating new opportunities in fields like computational biology, AI-driven drug discovery, and synthetic biology. Investors are on the lookout for startups that can bridge these worlds, so if you’re comfortable with both pipettes and Python, you’re sitting on a goldmine.

Michael Langer is the Co-founder & Managing Partner @ T.Rx Capital

Emerging managers in life sciences play a crucial role in the investment ecosystem by bringing fresh perspectives and innovative approaches to funding– now more than ever. These new entrants often have both scientific expertise and a strong passion for advancing the field.

Michael is the Co-Founder and Managing Partner of T.Rx Capital which is a fund specializing in investments in seed and Series A at the intersection of biology & technology. Michael previously founded Old Silver VC, an investment firm that invests in Healthcare and Deep Tech startups focusing on materials. They invested in 20 companies, including Big Hat Biosciences, Sesame Care, Seismic Therapeutics, Alto Pharmacy and Opentrons.

Michael is also the son of Dr. Bob Langer, a MIT Professor and founder of over 40 biotech companies (including Moderna) renowned for his groundbreaking work in drug delivery systems and tissue engineering. Dr. Bob Langer has joined Michael as a part of T.Rx and is the Chairman of the fund.

For life science founders navigating the complex landscape of innovation and research, the Brex financial stack offers a game-changing solution. Managing expenses transparently is crucial for these founders, who often juggle multiple funding sources and tight budgets.This transparency is especially valuable for those dealing with grant reporting requirements, such as SBIR grants, where precise financial documentation is essential. Brex also offers exclusive rewards tailored for science founders, providing additional perks that can be reinvested into their ventures. 

This year Brex was a proud sponsor of the Annual Nucleate Summit.  Nucleate is a nonprofit organization dedicated to empowering the next generation of science leaders. It helps bridge the gap between groundbreaking research and business ventures. This fits perfectly with my goal at Brex - to enable scientists to bring their innovations to market, drive economic growth, and address pressing global challenges.

Special Shout-out to Stanford’s Dr. Michael Snyder and his research uncovering aging happens kinda all at once versus in a constant way - with two big aging events happening in your 40s and then again in your 60s.  

And another shout out to Valley Research Park who is helping fuel “discoveries of the week” by offering a flexible, high-tech environment for life science and tech companies. As more companies enter the space, the need for quality lab space has become even higher (see note above about labs in basements!). VRP caters to both early and growth-stage companies with specialized, regulated areas, including fume hoods and vivariums.

Last words: Keep calm and science on

Being in science today - whether an investor, student, scientist, founder - well,  isn’t for the faint of heart, but if you’ve made it this far, you’ve already got what it takes.  So, keep tinkering in those basements, keep pushing the boundaries of what’s possible, and remember—every great discovery starts with a single experiment. Onward!

The financial stack you can bank on. Trusted by 1 in 3 US startups, Brex allows you to manage your spend from MVP to IPO. Interested? Sign up here using the referral code NEWSLETTER and get 25,000 bonus points, $5K AWS credits, $2.5K OpenAI credits and up to $150K in SaaS discounts.

Don’t hesitate to reach out,🦾!