Khosla bets big on SPAC boom, raising $1.2 billion for 3 vaguely targeted blank-check companies
Khosla Ventures had largely sat out the past year’s SPAC boom. That changed late last week, though, when the prominent Silicon Valley VC filed for three blank check companies at once, promising to raise $1.2 billion to find and eventually take three different impactful companies public.
Khosla didn’t offer much detail on what fields or industries they are aiming for, with managing partner Vinod Khosla writing instead a brief but polemical letter on the importance of startups and reinvention and the value of being George Bernard Shaw’s unreasonable man. They also used the copy-paste function to write most of the S-1 for what will be known as Khosla Ventures Acquisition Co. II, and Khosla Ventures Acquisition Co. III, so it’s difficult to get a gauge on where the firm plans on targeting their shell corporations.
Still, that letter gives reference to CRISPR Cas9, early detection of Alzheimer’s and dementia, Genentech, and how the increasing use of AI could help turn the “practice of medicine” to the “science of medicine” — notable inclusions for a tech firm that has in recent years increasingly waded into biotech.
That includes investments in at least three different early-stage anti-aging upstarts, a perennial favorite for Silicon Valley investors dipping their feet in biotech, as well as the more established CRISPR companies Editas, Eligo and eGenesis.
That still leaves plenty of room for Khosla to stay in healthcare but pour money instead into AI hospital tools, diagnostics, and other healthcare delivery technology. One of the SPACs includes a handful of advisers outside of the firm’s managing partner, including two with some healthcare experience: Rajiv Shah, president of The Rockefeller Foundation and a board member of the biotech Omeros; and Molly Coye, an executive at the digital healthcare corporation AVIA.
If they choose to go down the drug development route with or multiple SPACs, they’ll face stiff competition. Since the start of 2020, 40 biopharma SPACs have launched and only 9 have found a target. Eventually, that could leave some SPACs squeezed for targets, forced to choose between less-than-stellar private companies and returning the cash they raised to investors.
Khosla has left themselves plenty of room to go outside biopharma. Also mentioned in the S-1 letters? Quantum computing, education, robotics, de-materialization, 3D manufacturing, inverted supply chains, fusion reactors, cement and reducing the need for animal husbandry.