The Capital That Ate Wellness Is Going to Eat Your Mushrooms

Venture capital arrives for psychedelics.

Goop, Moon Juice and Daily Harvest are women-led companies oriented toward wellness, that fuzzy intersection of health and well-being. They share an ethos — and also an investor, Able Partners.

“We probably are the first fund to focus exclusively on wellness,” said Amanda Eilian, 42, one of the firm’s two partners.

This focus makes Able a bellwether for the direction in which wellness is headed. So it’s useful to know that it has also invested in Sanctuary (an astrology app), the Coconut Cult (probiotic-infused coconut “yogurt”) and MUDWTR (a coffee alternative that includes mushrooms).

Now, Able is getting into psychedelics.

Ms. Eilian and her partner, Lisa Blau, originally became interested in women-led wellness companies not because they saw them as sympathetic underdogs but because those companies were “an arbitrage opportunity” — a way of saying that start-ups that are run by women or oriented toward women were undervalued.

A similar calculus has led the firm to invest in so-called vice industries, looking for a market advantage over institutional investors that can’t or won’t support companies centered on sexual pleasure, cannabis or other stigmatized goods and services.

Laura Huang, a professor of business administration at Harvard Business School, who studies why investors invest, said that as venture capital firms proliferate, each grows increasingly specialized. It would make sense, she said, that such firms would progress from women-led businesses to other categories once seen as risky or potentially reputation damaging.

“It was women for a while, and now it’s these lifestyle brands,” Dr. Huang said. “There’s this internal competitive pressure to find that diamond in the rough. So there’s this constant pressure for people to be looking at what’s that next thing that’s undervalued.”

Able is unwilling to invest in cannabis; its partners believe that the risks of taking the drug recreationally have been understated. But it is now an early-stage investor in two companies that are involved in research of psychedelic compounds for medical use, Compass Pathways and Atai Life Sciences.

“Most institutional funds can’t invest in areas like psychedelics,” Ms. Eilian said. “So there was this white space for somewhat untraditional funds like ourselves to be able to look at the category.”

Particularly because the psychoactive drug psilocybin was recently decriminalized in Denver and Oakland, Calif., it has started to look like a good bet.

Compass Pathways, which is in London, announced in January that it had been granted a patent in the United States. The patent covers a particular method of obtaining psilocybin in order to treat drug-resistant depression. The treatment is currently in a phase IIb clinical trial.

Atai, a German biotech company, is a major investor in Compass. Able became an investor in Atai in February 2019 and in Compass in August 2019.

Compass, which also received seed investment from Peter Thiel’s investment company Thiel Capital (a bellwether of an entirely different sort), said that there was interest in its progress because many people believe there haven’t been significant advancements in treatment for depression in recent decades.

Ms. Eilian said that it is important to her that any psychedelics company in which Able has invested is willing to work within the regulatory structure in the United States. Still, the through line between its investments in Compass and Atai and the wellness companies it has long supported is that all of them purportedly correct for the inadequacies of the medical establishment.

This year, Able has publicly dedicated itself to narrowing what its partners call “the wellness gap.” That’s how they describe the distance between standard economic measures of prosperity and how rotten everyone feels all the time.

“There are definitely a lot of people who are not well and are desperate and they want to believe, and then there are unscrupulous people who will sell them any cure that they want,” Ms. Eilian said. “One hundred percent we need to be really aware of that. But I also don’t believe that we’re always going to be able to have large double-blind placebo studies to validate everything that we’re doing.”

She said that institutionally accepted studies had, for years, focused on men at the expense of women. Someone like herself, she said, “a mother of four who grew up in rural Vermont near a leaking thermometer factory,” was unlikely to be represented in major studies.

Wellness companies, including several of those in which Able has invested, have made claims about their health benefits that either cannot be independently substantiated or have not yet been. Asked whether Able had an alternate standard for the companies in which it invests, Ms. Eilian said the first priority was transparency.

“Goop, and Moon Juice as well, have gotten much better about saying, ‘Here’s what’s in here,’ or, ‘Here’s the research that we’re referring to, or, ‘Here’s where the research is lacking,’” she said.

Photo Illustration by Tracy Ma/The New York Times; Shutterstock (horse)

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