As psychedelic drugs increasingly pass from the hands of hippies into the boardrooms of Europe’s institutional investors, a whole crop of startups are popping up to ready society for this much-hyped “renaissance” in mental healthcare.

Researchers and therapists are increasingly starting to advocate for the use of psychedelics to treat mental health conditions, arguing that they can help patients to “reset” negative behaviours and thought patterns. Psychedelic compounds have been used in traditional healing ceremonies all over the world for millennia, but now entrepreneurs are building companies that hope to bring them into the Western medical system.

The business models range from biotech companies needing hundreds of millions of euros to take new medicines through clinical trials, to direct-to-consumer lifestyle brands selling psychedelic fungi for microdosing in pretty packaging.

On the larger end of that spectrum, Europe is dominating psychedelic drug development, with two of the largest publicly listed players — Atai Life Sciences and Compass Pathways — based in the UK. A favourable regulatory environment is also starting to draw large drug developers from across the pond to establish operations here. 

So, as this once-taboo industry begins to mature into part of the furniture of Europe’s venture-backed startup scene, we asked some specialist investors to name some of their favourite companies working in the space. There was just one rule: they could only choose one company they’d invested in.

Here’s who they picked.

Clara Burtenshaw, partner — Neo Kuma Ventures

Neo Kuma Ventures is a London-based firm that’s been operating since 2019, investing in early-stage psychedelic startups around the world, but with a focus on Europe. The fund makes investments ranging from £150k-1m and has invested in some of the continent’s biggest names in psychedelic medicine including drug development companies Atai Life Sciences, Beckley Psytech and Small Pharma.

Psylink

Psylink is a Vilnius-based biotech company researching, developing and manufacturing psychoactive compounds. We’re really excited about the team’s sustainable, scalable and cost-effective solution to drug development, which makes use of synthetic biology and metabolic engineering to produce psychedelic compounds.

Homecoming

Homecoming is a digital companion for therapists to support patients on their journeys with psychedelic-assisted therapy. The app offers patients support for before and after their psychedelic experience, as well as insights for therapists working in the space through data and a content marketplace.

Ocean Bio Ltd 

Ocean Bio Ltd is an early-stage drug discovery company developing a diversified portfolio of clinical assets targeting PTSD and a preventative treatment for migraines, among other programmes. We’ve known the founder Josh Oakley for a long time, and he’s brought together a world-class team of experts to lead and support the company.

One from the portfolio: Wavepaths

Wavepaths is a leading producer of music for psychedelic-assisted therapy, cofounded by neuroscientist Dr Mendel Kaelen in 2019, stemming from his research at Imperial College London’s Centre for Psychedelic Research. The studies show that music plays an essential role in creating positive outcomes for psychedelic therapies such as ketamine, psilocybin and MDMA. We’re really excited about Wavepaths’ ability to optimise patient outcomes through enhancing the setting in which psychedelic therapies are delivered. 

Bek Muslimov, cofounding partner — Leafy Tunnel

Leafy Tunnel is a London-based VC firm, founded in 2020, that invests in “alternative medicines” including psychedelics and cannabis. Its first fund has $30m to invest across 15 companies, and has currently backed eight startups. Those include Beckley Psytech, cannabis research firm Prohibition Partners and medical cannabis distributor iuvo.

The Synthesis Institute 

The Synthesis Institute aims to deliver safe, legal and medically supervised psychedelic experiences in the Netherlands. It’s focusing on education and training for clinicians to deliver psychedelic therapies safely and effectively. At its inception, the institute collaborated with Imperial College London and the California Institute of Integral Studies in order to supplement clinical research and offer hands-on experience for students.

Lophora

Denmark-based Lophora was founded in 2018 and focuses its work on the central nervous system. Specifically, the company develops proprietary new clinical entities (NCEs) — meaning drugs that have never existed before — treatment-resistant depression, and potential further indications including the treatment of anxiety, PTSD and substance abuse.

Wavepaths

Wavepaths is filling a necessary gap in the psychedelic-assisted therapy space. Using psychedelic science, machine learning and music theory, the startup has created a person-centred music solution for practitioners to use during sessions. The personalised and adaptive nature of the platform allows the patient and clinician to maximise the efficacy of sessions.

One from the portfolio: Beckley Psytech

Beckley Psytech is a spinout of Beckley Foundation, which has accumulated more than 30 years of scientific research into psychoactive substances since 1998, when it was founded by Amanda Feilding. Beckley Psytech is at the forefront of research into the clinical utility of 5-Meo-DMT (a psychedelic compound found in toad venom) and, we believe, has one of the best management teams in the psychedelic drug development space.

To learn more about Beckley Psytech and the Beckley Foundation, have a read of our visit to the company’s headquarters, an ancestral mansion in the English countryside.

Richard Skaife, partner — The Conscious Fund

The Conscious Fund is a London-based firm with additional offices in Malta and the US. The fund says that its mission is to “support the development of psychedelics as a powerful tool for mental health, addiction treatment and spiritual exploration”. Its portfolio companies include Atai Life Sciences, psilocybin drug development company Albert Labs and microding resource company Thirdwave.

Lumenate

Could a mobile app induce a psychedelic-like experience? Numerous positive reviews on the app store and in the press suggest it could. Lumenate’s app provides a pathway to a first “trip” or “psychedelic experience” from the comfort of your couch, without taking any drugs.

Earth Resonance

This Dutch startup provides a robust access programme to legal magic truffles for microdosing. Magic truffles are legal in the Netherlands and Earth Resonance has created an early-mover brand supported by a science-first approach.

GH Research PLC

This secretive Irish company is focused on the psychedelic compound DMT and is now publicly listed on the NASDAQ. It maintains a low profile and its stock has performed well.

One from the portfolio: Hive Bio

Hive Bio pioneered the “premium retreat meets clinical therapy” model, with a holistic approach to care delivered on a residential basis. Hive’s flagship property in Malta’s sister island Gozo is the largest psychedelic clinic in Europe.

Tim Smith is Sifted’s Iberia correspondent. He tweets from @timmpsmith