In a little over one year, the psychedelics industry has experienced exponential growth.
With more than 40 public companies and 6 listed on the Nasdaq, investors looking to bet on the “psychedelic renaissance” have a host of alternatives from which to choose.
“In this industry. If you miss a day, you miss a year,” said Sa'ad Shah, co-founder and managing partner of Noetic, a venture capital firm that invests in emerging and early-stage psychedelic-based wellness and pharmaceutical companies.
A rapidly-growing sector can mean great news for investors, but it can also make it difficult to navigate within the sector, as new companies and lines of business pop up like mushrooms after a summer rain.
Is The Industry’s Potential Still Held In The Private Sector?
For Matias Serebrinsky, partner at PsyMed Ventures, virtually every trend that moved the industry a year ago has intensified. “More companies, more funding, established biotech and healthcare players [are] playing a bigger role in the space.”
However, as an early-stage investor who also co-hosts the Business Trip podcast,
Serebrinsky said there’s still a lot of innovation in the space that has not necessarily reached retail investors.
Recent developments in the psychedelics sector may lead some to believe that the market is reaching some kind of stability.
But experienced investors say today’s public companies are just the tip of the iceberg.
“I think that the best companies out there are still private, they're not public,” said Shah, whose VC fund raised over $120 million in the last year alone.
Matias Serebrinsky, president and CEO of Horizons ETFs and manager of the first psychedelics ETF, said more IPOs from larger, well-funded companies are on the horizon.
There are many reasons why companies in the psychedelics space will choose to delay their IPOs. Shah encourages companies in Noetic's portfolio to remain in the private space for as long as they can afford to.
“A large part of the decision to go public versus staying private is about access to capital,” Shah explained. “For companies that are stirring strong, positive results with a compelling value proposition, it’s easy to raise private capital, so it’s in their best interest to delay an IPO for a more opportune …