AlleyCorp in Q1
New investments, the annual AlleyCorp Impact Report, and more news across our portfolio.
Note from Kevin
The VC and technology sectors continued their steady decline this quarter, and we haven’t reached the bottom yet. In Q1, deal volume dropped by more than 60% compared to the same period last year. We’re not experiencing a downturn as catastrophic as 2000 or 2008, but inflation, interest rates, and insecurity in our financial institutions are quenching investor confidence. It’s hard to feel very optimistic right now, but for investors this market inevitably creates opportunities to find good companies that are spending efficiently and valued realistically.
Considering the recent developments with SVB, the upcoming months will likely remain challenging from a funding standpoint. The market will be continue to be cautious and risk-averse, and we expect capital will be deployed at a slower pace. Many VCs will prioritize safeguarding their existing portfolio companies over making new investments. This will continue pushing valuations down, but ultimately we are returning to a healthier state where great companies get funded and mediocre companies do not. We have great admiration for our founders who continue to build exceptional companies while navigating these changes in the market.
The fallout from the banking crisis sparked a momentary backlash against venture capital and startups. Given technology's global dominance, some level of resistance is expected. Ultimately, the majority of people recognize that technology improves their lives, from better healthcare and increased life expectancy to on-demand entertainment. However, many underestimate how impactful early-stage financing is in driving this new technology and moving the world forward.
Right now, we’re on the cusp of a transformational moment in technology reminiscent of the early days of the internet. At AlleyCorp, we’re diving deep into frontiers that are going to change our lives more dramatically than ever before, from organoids and psychedelics revolutionizing healthcare to robotics, automation, and AI reshaping how we work and create. All of these nascent ideas need funding, and we continue to be incredibly optimistic about the early-stage market as an essential force for progress.
New York is poised to become the premier technology ecosystem and the ideal place to launch the defining companies of the next decade. The city's vibrant culture, diverse industries, and top talent are fueling its growth. With the tech scene's impressive progress over the past 20 years, we at AlleyCorp believe that New York will play a crucial role in fostering the transformative companies that will drive significant advancements in the coming years.
The final paragraph was written by ChatGPT-4.
Team Expansion
We’re excited to welcome two new Associates to our Social Impact and Alley Robotics Ventures teams.
Youssef Kalad, Associate, AlleyCorp Social Impact
Youssef Kalad has been working with us as a Venture Fellow since last year and will formally join the team as an Associate in July after he completes his MBA at Wharton. Prior to joining AlleyCorp, Youssef worked in technology and innovation for the Office of the NYC Mayor and the New York Governor’s Office, in addition to roles at Uber and Google. He graduated from the University of Chicago where he served as Student Government President.
Brannon Jones, Associate, Alley Robotics Ventures
Brannon Jones joined Alley Robotics Ventures in February part-time as he completes his MBA at Harvard, and will be full-time beginning in July. Prior to joining ARV Brannon was a Lead Manufacturing, Automation, and Integration Engineer at SpaceX in Los Angeles, where he worked on the propulsive systems for the reusable launch vehicle and for Starship’s Raptor concept engine. He studied mechanical and aerospace engineering at Princeton University where he was also captain of the football team and two-time Ivy League champion.
New Promotions: Sercan Ozcan and Jane Suh
We’re thrilled to announce two new promotions on the team. Sercan Ozcan has been promoted to Partner, Finance & Operations. Sercan leads all of AlleyCorp’s finance and accounting operations and helps our companies navigate banking relationships and financing options.
Jane Suh has been promoted to Principal on our Healthcare team. Jane focuses on incubation, identifying new investment opportunities, and supporting portfolio companies across our Healthcare vertical.
Portfolio Fundraises
AlleyCorp incubation Transcend Therapeutics, which is developing the next generation of psychoactive compounds for neuropsychiatry, announced a $40 million Series A round. Founder Blake Mandell and AlleyCorp were featured in a Wall Street Journal piece about the future of psychedelic therapy.
AlleyCorp incubation Pearl Health, on a mission to democratize value in healthcare, announced a $75 million Series B round led by Andreessen Horowitz’s Growth Fund and Viking Global Investors. Read more about how this latest round of funding will accelerate their development of innovative care delivery solutions.
Recent Investments
Meadow, a platform that clarifies and simplifies the financial experience for students, announced $3.5 million in seed funding led by Susa Ventures. AlleyCorp participated in the round along with Giant Ventures, Treble Capital, and others.
Curie.Bio, a new venture founded by Zach Weinberg (Co-Founder, Flatiron Health) that helps founders launch therapeutics companies, launched with $520 million in funding from investors including AlleyCorp, GV, ARCH Venture Partners, and a16z.
Journey Clinical, a turnkey healthtech platform for psychedelic-assisted therapy, raised $8.5 million in Series A funding led by Union Square Ventures with participation from AlleyCorp, Able Partners, PsyMed Ventures, and others.
Cascade Health leverages Cloud and AI technologies to provide the most comprehensive and reliable healthcare transparency data platform, analyzing petabyte-scale datasets to assist healthcare teams in optimizing spending, decreasing costs, and improving care.
Renovate Robotics, which is automating dangerous roofing and solar installations, announced a $2.5 million pre-seed round led by Alley Robotics Ventures alongside SOSV’s HAX, Newlab, Uphonest Capital, and Climate Capital.
SJW Robotics, a pioneering FoodTech company building the world’s first autonomous robotic restaurant, announced $2 million in seed funding with participation from Alley Robotics Ventures and celebrity chef Tom Colicchio.
dolaGon is building autonomous off-road utility terrain vehicles, relieving valuable labor and maximizing efficiency in backcountry environments.
AlleyCorp Impact Report
Our Social Impact team, led by Tanya Beja, released their annual AlleyCorp Impact report, covering our strategic impact focus areas and offering a detailed look at each of the companies and nonprofit organizations we’ve invested in to date. All of our portfolio companies and grantees leverage technology to address the hardships faced by low-income or historically underserved families. Read the report here.
DHNY’s 2023 Healthcare Innovation Report
DHNY released their annual Healthcare Innovation Report looking at the data, trends, and people that have propelled New York to become the capital of healthcare innovation. AlleyCorp is honored to partner with DHNY on the report’s annual State of New York Digital Health research. We surveyed a range of stakeholders (CEOs, entrepreneurs, investors, payors, and providers) to shed light on market trends and get a pulse on today’s business environment. Unlike other research, this report is laser focused on our region, offering a unique view into the dynamic New York market. Read the full report here.
The 2023 DHNY Summit is slated for September 21st. You can apply to join here. Reach out to info@dhny.co to learn more about plans for 2023 and partnership opportunities.
Expansion of AlleyCorp Engineering
AlleyCorp Engineering is now offering services to companies outside of the AlleyCorp portfolio. Over the past two years, we’ve expanded our engineering hubs in Montreal and Bogotá to over 70 people, with engineering, product design, data science, and full-stack ML/AI proficiency on board. We’ve launched ~20 companies in that time and have a unique perspective on the technology strategy and speed required in a company’s early years.
We are able to work with companies from pre-seed through Series B, and we have particularly strong expertise in healthcare (clinical infrastructure, life sciences, insurtech, and more), cloud infrastructure, developer tools, and enterprise SaaS.
We partner with founders in a high-touch, collaborative way and can help with anything from strategic consulting (fractional CTO services, machine learning advisement, and product strategy) to development of MVPs (user research and prototyping, product engineering, and compliance-readiness in regulated industries).
If you’re interested in working with us, get in touch at hello@alleycorp.engineering.
News
Kevin joined Logan Bartlett on his show for a wide-ranging and candid conversation, from Kevin’s early days as a firm believer in the internet’s potential to the frontiers that excite him most today.
Fabrice Grinda of FJ Labs hosted Kevin for an expansive conversation across professional and personal interests, including their shared scientific expedition across the South Pole earlier this winter and why it was the trip of a lifetime.
The Gates Foundation reported that AlleyCorp Social Impact grantee Quill is now the most used nonprofit AI tool in the United States, and one of the top four most used nonprofit literacy tools alongside Khan Academy, CommonLit, and the College Board.
Tanya Beja, who leads AlleyCorp’s Social Impact vertical, spoke at SXSW EDU on increasing data literacy for K-12 students. Listen to the panel discussion here.
Pearl Health CEO Mike Kopko joined Jacob Effron on the Vital Signs podcast by Redpoint to discuss Pearl’s care model and what it’s been like building the company as ACO Reach evolved.
Marc-Kwesi Farrell, founder and CEO of Ten to One, was honored as a Notable Black Leader by Crain’s New York Business.
Two of our companies, Transcend Therapeutics and Journey Clinical, were featured by Business Insider as 9 psychedelics startups that are winning over top venture investors.
AlleyCorp companies Atlas Obscura, Altana, and Security Scorecard were featured in Fast Company’s World’s Most Innovative Companies of 2023.
Ansible Health made headlines when they proved that Chat GPT-3 could pass all three parts of the U.S. Medical Licensing Examination.