Soylent Co-Founder Seeks to Raise Biotech Venture-Capital Fund
On October 7, 2019, the Wall Street Journal reported on Soylent co-founder, Rob Rhinehart’s new fund to back biotechnology and life-science startups in Southern California.
Mr. Rhinehart said his firm, MarsBio, is seeking to raise up to $50 million to back Los Angeles-area startups working broadly across bioscience and biotechnology.
MarsBio has invested in six startups to date, Mr. Rhinehart said. Portfolio companies include Karma Biotechnologies, a developer of drugs to treat autoimmune diseases that has raised nearly $3 million from investors including Khosla Ventures.
Mr. Rhinehart has been a well-known figure in biotech circles since he co-founded Soylent in 2013. The nutrition drink was first marketed to engineers and other tech workers as a food replacement, and it attracted investors including GV and Andreessen Horowitz.
Mr. Rhinehart stepped down as chief executive of Soylent in late 2017 and now serves as executive chairman. He is also the co-founder of Renew Biopharma Inc., which is developing synthetic cannabinoids for therapeutic use.
Shortly after he left Soylent, Mr. Rhinehart formed MarsBio with fellow bioscience entrepreneurs Arye Lipman and Llewellyn Cox, who co-founded an advisory firm for startups called BioBuilt. Mr. Cox also founded Lab Launch, a biotechnology incubator network with locations across Southern California. All three serve as general partners. Joe Wilson, the founder of personalized medication startup Multiply Labs, serves as a venture partner.
MarsBio started out as a co-working lab space in a warehouse in Los Angeles’s Arts District, housing 14 startups at its peak, but high overhead costs prompted the partners to switch their focus to raising a venture fund, Mr. Rhinehart said. Eventually, the partners hope to secure a new space where they can run an incubator in addition to the fund, he said.
“No matter how we do this, we need to do it in a way that creates hubs because Los Angeles is so spread out,” Mr. Rhinehart said. “The region already has every piece in place to make a new biotech industry work—research institutions, talent, manufacturing capabilities—but we all need to coordinate.”
The County of Los Angeles plans to serve as an anchor financier of MarsBio with a $15 million commitment—the county’s first-ever investment in a venture fund, according to county representatives. Other backers of the fund include financier Christian Angermayer, the founder of Apeiron Investment Group and Atai Life Sciences AG, which is developing psychedelic-based drugs.
Los Angeles County’s investment will be structured as unsecured debt and will come from the county’s General Fund.
The commitment to MarsBio is part of the county’s efforts to retain scientific talent and spur job development, Senior Deputy for Economic Development David Riccitiello said. Although Los Angeles County is home to several world-class research institutions and scientific talent, many people leave for the San Francisco Bay Area or San Diego to form businesses and secure financing, Mr. Riccitiello said.
In addition to funding MarsBio, the county also has funded several academic incubators at local universities, and set aside 15 acres at the University of California Los Angeles to construct a biotech hub. In late 2018 it established the nonprofit corporation BioLA, an entrepreneurial organization that links government, researchers and investors to spearhead startup activity.
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