Strategy Session is a feature for Crunchbase News where we ask venture capital firms five questions about their investment strategies.
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The intersection of deep technology and health care science might scare off some investors, but Peter Barrett, general partner and CTO at Playground Global, is drawn to life science startups tackling big problems.
One of the venture firm’s most recent investments was in Lassogen, a San Diego-based biotechnology company exploring lasso peptides as a way to develop new medicines. Playground led its $4.5 million oversubscribed seed round.
The funding is emblematic of the types of deals Playground likes to take on. The Palo Alto, California-based firm focuses on early-stage investment “working at the intersection of bits, atoms and AI.” It has raised two funds since being founded in 2015 and made more than 70 investments, according to Crunchbase data.
Barrett, who has been writing software since he was a teenager, spoke to Crunchbase News about what makes a good life sciences investment. What follows has been lightly edited for length and clarity.
What do you look for in this industry?
Barrett: We have a wide variety of investments in life sciences and adjacent industries. Being a deep-tech early-stage firm, we see emerging technology that crosses different domains. Things in life sciences can lead to changes in computation and artificial intelligence, so we invest in watershed technology that enables investments in other places. For example, a large-scale quantum computer can do things in life sciences, but could also grow food—creating investment areas that haven’t existed before. From therapeutics to digital health platforms, there is an enormous value creation.
What are the hot areas within life sciences?
Barrett: One is applying new machine-learning techniques to discover drugs that are less experimental. Another is the application of quantum computing to medicine. Due to COVID-19, there is interest in diagnostics and sensing, but also in how that is done. Next-generation computing is being used in laboratories to produce computational advances like COVID testing and vaccines. Now that we’ve discovered what COVID does to you, it is providing parts to develop therapeutics for the disease. That is a fundamental place in investing because we can address both sides of that area.
Does Playground have a fund specifically for life sciences?
Barrett: We don’t. The second fund has a concentration of life sciences and next-gen compute, robotics, artificial intelligence, a lot of logistics tech for material goods. A lot of it is hard tech, but it intersects in interesting ways. Even though they have separate vertices, they really do connect.
How do you like to work with companies?
Barrett: Companies we love to work with and conversations we like to have are around a testable hypothesis and the opportunity for it be consequential. We love things that are almost impossible and things that can have watershed consequences. We like to hear if you have a mechanism and tell us “here is what we believe it is useful for, and here is how to test it. If I can do this, then all other things become possible.” We’ve seen a company’s technology that makes MRI machines 10,000 times more sensitive, which will create an entirely new way to use hardware. Another company entered COVID with three years of technology in telehealth, and while it is a great example during COVID, will it continue to be a mode of operation going forward and save hundreds of millions of dollars for health care? The hypothesis was true, in this case.
Was there a company you wanted to fund but missed out on, or was there one that got away?
Barrett: If you survey our partners–who come from diverse backgrounds–everyone has one they think about. Mine is Sila, which is developing silicon nanotechnology for batteries. I met with them but didn’t move fast enough. We see folks with risky tech, and are fortunate to be a team of people with the technical domain expertise in-house to know whether what they are talking about is possible or not.
Photo of Peter Barrett courtesy of Playground Global.
Illustration: Dom Guzman
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