Presented by IBM

Exclusive: Holoclara raises $16 million Series A to develop therapeutics—with worms

June 27, 2024

A worm-filled freezer looks more or less like any other freezer.

It's bigger and colder, sure, but the primary difference is a matter of content—a worm freezer is packed with millions of dust-sized worms in cryosleep.

I didn't end up in a Caltech worm lab alone, of course: I was there with Andrea Choe, CEO and cofounder of Holoclara, a biotech startup that's looking to develop therapeutics using worms. For Choe, a Caltech biology PhD and USC MD, worm labs like this are part of her origin story, since she’d been studying worms for years by the time she cofounded Holorclara in 2017.

And now, the company just hit a milestone: Holoclara has raised $16 million for its Series A, Fortune has exclusively learned. Bold Capital Partners led the round, with participation from Horizons Ventures, Tarrasque, Endurance28, Freeflow Ventures, and a number of angel investors. Kairos Ventures is a previous investor.

If you’re wondering why all the fuss, the answer’s pretty simple: In the scientific sense, worms are rather special.

"It's the one organism that I would say is the simplest, that we know the most about, and that's why you've seen so many Nobel Prizes from C. elegans [roundworms]," said Choe. "You know everything about it, from when it goes from one cell, to two, to four to the entire organism."

Worms have co-evolved with humans for millions of years. Now, there's mounting evidence that worms hold potential as therapeutic agents, as suggested by cases where exposure to worms has, for example, alleviated conditions like asthma.

"You can develop tools within this organism," said Choe. "Don't forget, you lay it flat on a microscope, on a thin sheet of agar, with a tiny drop of anesthetic and it'll just go to sleep on its side—you can then zap with a laser any single cell or neuron you want."

So, that's what Holoclara is chasing—that for even debilitating allergies and autoimmune disorders, there could be treatments and medications built on worm molecules. Choe’s uniquely situated to be the person doing this, too: In graduate school, she made a first-of-its-kind discovery, that worms have a molecular language that they use to communicate across their entire phylum.

You could say that opened a can of worms, as Choe began building Holoclara based on that discovery. As for the company’s name, it’s taken from the Greek word for “complete,” as Holoclara looks to complete our understanding of molecular history.

One of my favorite activities of late is asking VCs what the total addressable market is for something in which there's simply no way to know. Neal Bhadkamkar, Bold general partner, kindly obliged the question.

"Oh my God," was his first reaction, followed by:

"I don't know, but it has the potential to open up a large class of potential therapies from different kinds of worm species," said Bhadkamkar. "There are many different kinds and they haven't really been studied. There are already lots of other people mining other kinds of systems, like plants. But people haven't really dug into the worms category in particular—and worms have evolved with us, and they're known to be used in traditional cultures."

It's hard to overstate that last point. Even if worms aren’t your thing, there’s an undeniably long evolutionary history between worms and humans. Paul Sternberg, Holoclara cofounder and longtime Caltech professor, put it to me like this: Per the fossil record, worms have been around for an unfathomably long time, possibly 900 million years, and they’ve been interacting with our ancestors for that entire time. This has allowed natural selection to engineer them for a long period of evolution, and their unique relationship with human biology can (and should) be leveraged into practical therapies.

"Imagine that this research amounts to basically having a pill," said Sternberg. "Think about how [common diabetes medications like] statins and metformin are definitely safe enough that millions of people take them—and they’re really important.”

It all comes back to studying these tiny organisms, which is a precise task—but not one devoid of mirth. One of the things I learned about worms is that there are different ways to categorize them, including by how they present under a microscope. I saw some "dumpys" (short and rotund) and "uncs" (which stands for uncoordinated). Worms can even behave in ways that correlate to humans, however humorously.

Watching three worms tangle on a computer screen, I turned to one lab technician. What are they doing?

He pointed: "Oh, that one's trying to mate…but he's not very good at it."

Worms are funny. People are funny. When I first met Choe, I was entranced by the idea of a life devoted to worm-based science. I asked her, how do you know when you're a worm person?

"I think once you start, day one, you're a full worm person," said Choe. "There's no going back. As soon as I saw the freezer open, and the fog come out, I was like 'I'm never going back.'"

Ask Andy…In this week's "Ask Andy" column, Bonobos cofounder Andy Dunn tackles a question from a founder wondering how much they should pay themselves––and what that looks like as the company scales. His advice: "Whatever you do, make sure your compensation shows a balance of humility, fairness with the rest of your team—and the fact that as a founder, you have a big equity stake." Read the whole column here.

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Joe Abrams curated the deals section of today’s newsletter.

Advice on leading teams, building things, and surviving the startup life from Andy Dunn, the founding CEO of Bonobos and Pie and the author of Burn Rate: Launching a Startup and Losing My Mind.

Have a question for Andy? Ask it here.

Ask Andy: How much should startup founders pay themselves?

Bonobos and Pie founder Andy Dunn answers questions about founders' salaries, and about growing with a specific acquirer in mind.

CONTENT FROM IBM

CFOs can't afford to pass over gen AI

Finance is primed for a gen AI revolution, yet only 2% of finance organizations have optimized gen AI. Gen AI can help CFOs navigate a complex risk landscape, make confident investment decisions, and increase reporting and forecasting accuracy. Read more here

VENTURE DEALS

- CData, a Chapel Hill, N.C.-based data virtualization platform, raised $350 million in funding. Warburg Pincus led the round and was joined by Accel.

- Sidecar Health, an El Segundo, Calif.-based health insurance company for businesses, raised $165 million in Series D funding. Koch Disruptive Technologies led the round and was joined by GreatPoint Ventures, BOND, Cathay Innovation, Drive Capital, Duke University, Menlo Ventures, and Morpheus.

- A24, a New York City-based movie studio, raised $75 million in funding from Thrive Capital, per The Hollywood Reporter.

- KarmaCheck, a San Francisco-based background check, credentialing, and compliance platform, raised $45 million in Series B funding. Parameter Ventures led the round and was joined by PruVen Capital, Velvet Sea Ventures, GC1 Ventures, and NextView Ventures.

- Form Health, a Boston, Mass.-based obesity care provider, raised $38 million in Series B funding. Sound Ventures led the round and was joined by M13, SignalFire, and Next View Ventures.

- Adonis, a New York City-based revenue intelligence and automation platform designed for health care, raised $31 million in Series B funding. Point72 Private Investments led the round and was joined by Kin Ventures and existing investors General Catalyst, Bling Capital, and Max Ventures.

- Sensi.AI, a Palo Alto, Calif.-based AI copilot for caregivers, raised $31 million in Series B funding. Zeev Ventures and Insight Partners led the round and was joined by existing investors Entrée Capital, Flint Capital, Jibe Ventures, and Secret Chord Ventures.

- Orby AI, a Mountain View, Calif.-based developer of AI technology that recognizes automatable enterprise tasks and performs them, raised $30 million in Series A funding. New Enterprise Associates, Wing VC, and WndrCo led the round and were joined by Pear VC.

- Rainforest, an Atlanta, Ga.-based embedded payment processor for software platforms, raised $20 million in Series A funding. Matrix Partners led the round and was joined by existing investors Accel, Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, and Ardent Venture Partners.

- VenoStent, a Houston, Texas-based medical device company for dialysis patients, raised $20 million in Series A funding. Good Growth Capital and IAG Capital Partners led the round and was joined by Norwest Venture Partners.

- Ario, a Palo Alto, Calif.-based AI-powered assistant for parents, raised $16 million in seed funding from Wing Venture Capital, Floodgate, Bain Capital Ventures, Moxxie, and angel investors.

- Covalent, a Vancouver, Canada-based blockchain data infrastructure company, raised $5 million in funding. RockTree Capital led the round and was joined by CmCC Global, Moonrock Capital, and Double Peak Group.

- Valpas, a Helsinki, Finland-based developer of bed legs that lure and capture bed bugs, raised €4 million ($4.3 million) in seed funding. Zenith VC led the round and was joined by Icebreaker VC, Finnish Industry Investment, Canon Marketing Japan MIRAI Fund, and others.

- LOST iN, a Venice, Calif.-based travel media brand, raised $4 million in seed funding. MaC Venture Capital led the round and was joined by BDMI, Pitbull Ventures, and others.

- Foray Bioscience, a Cambridge, Mass.-based company making plant-based products without the need for traditional harvesting, raised $3 million in seed funding. ReGen Ventures led the round and was joined by The Engine Ventures, Susquehanna Sustainable Investments, Understorey Ventures, Superorganism, and others.

- RISR, a Philadelphia, Pa.-based business owner engagement platform, raised $1.5 million in seed funding from Kane Brenan, Angelo Grecco, Kevin Lucey, and others.

New: The Next to Lead newsletter

Learn how to pave your path to the C-suite

Every week, get strategies and advice from recruiters, researchers, and other experts on what it takes to make it to the corner office.

Subscribe now

PRIVATE EQUITY

- The Rise Fund agreed to lead a $200 million investment into Foodsmart, a San Francisco-based telenutrition platform and food benefits management platform.

- TVM Capital Healthcare invested $35 million in Boston Oncology Arabia, a Riyadh, Saudi Arabia-based bio-generic drug manufacturer.

- Any Hour, backed by Knox Lane, acquired McQuillan Home Services, a Saint Paul, Minn.-based home services provider, and Divine Electric, a San Rafael, Calif.-based provider of electrical and plumbing services. Financial terms were not disclosed.

EXITS

- TDR Capital agreed to acquire Acqua & Sapone, a Milan, Italy-based discount retailer of household and personal care products, from H.I.G. Capital. Financial terms were not disclosed.

OTHER

- Funnel acquired Adtriba, a Hamburg, Germany-based marketing measurement and optimization company. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- Curie.Bio, a Boston, Mass.-based venture capital firm, raised $380 million in for a new fund focused on Series A rounds for companies undergoing clinical trials.

PEOPLE

- Ballistic Ventures, a Boston, Mass.-based venture capital firm, hired Kevin Mandia as a general partner. Formerly, he was with Mandiant/Google.

- Base10 Partners, a San Francisco-based venture capital firm, promoted Caroline Broder to partner.

- Battery Ventures, a Boston, Mass.-based venture capital firm, promoted Satoshi Harris- Koizumi to partner, Collier Searle to principal, Max Jessen and Stefan Momic to vice president, and Jack McGuiness and Grace Hermes to associates.

- Martis Capital Management, a Washington, D.C., San Francisco, and Miami, Fla.-based private equity firm, hired Beth Dresdale as a principal on the value creation team and David Muckey as a director on the investment team. Formerly, Dresdale was with Incline Equity Partners and Muckey was with Gemspring Capital.