SoftBank, Morningside help put US-China AI player on the map with $318M bet
Before Tencent made its first foray into AI-aided drug discovery this July, the Chinese tech giant had bought itself a line into the burgeoning field.
Tencent had backed a US-China AI startup by the name of XtalPi late 2015, and kept following up through two $15 million and $46 million rounds through 2018. Now SoftBank, Morningside and the venture arm of a Chinese government-owned insurance group are all following its lead, headlining a Series C that brings in a whopping $318.8 million.
After putting the company together at MIT in 2014 where they were each doing research in physics, the three founders soon opened their first business development office in Cambridge’s Kendall Square. Within that year, they set up headquarters in Shenzhen, where XtalPi’s computational R&D center and experimental center are now located.
For the full package, XtalPi also boasts of an AI research hub in Beijing.
Like many of its counterparts in the West, the big idea at XtalPi is to shorten the drug discovery and development timeframe by applying a mix of AI, quantum physics algorithms and cloud computing technologies.
In particular, the company initially leaned heavily on CEO Wen Shuhao’s expertise in predicting crystal structures, which in turn sheds light on the properties of drug candidates. That focus is hinted in its name, with Xtal being the abbreviation of crystal in academic-speak.
For now, XtalPi also appears content with being just a partner to biopharma companies, who still shoulder much of the R&D work especially when it comes to clinical trials, putting them in the same group as Insitro and Insilico (Others, such as Schrodinger, Atomwise and Recursion, have increasingly waded into drug development).
The new financing will fuel further advances on its platform, XtalPi noted, strengthening algorithmic power, algorithm design as well as database.
A slew of heavyweight VC firms in China joined the round, including CICC Capital, CMB International, CITIC Capital, Shunwei Capital, Oceanpine Capital, Foursquare Capital and IMO Ventures, in addition to Korea’s Mirae Asset. Earlier investors such as Sequoia also came back for more.