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Are magic mushrooms Silicon Valley’s next big bet?

Advocates hail cannabis for its medicinal benefits. Now
venture capitalists are zeroing in on another substance: magic mushrooms. 

Some daring investors are funding a psilocybin movement, betting that the psychedelic compound can mend the likes of OCD and PTSD, opioid addiction, alcoholism, eating disorders, cluster headaches, and more.

Jeffrey M. O’Brien took a dive into the nascent industry for Fortune, following angel investor Tim Ferriss, an early investor in Uber, Twitter, and Alibaba. Ferriss has poured much money into advancing research into the psilocybin market.

“I view the next five years as an absolutely golden window.
There’s an opportunity to use relatively small amounts of money to have
billions of dollars of impact and to affect millions of lives,” Ferriss told
Jeffrey. “There just aren’t that many opportunities that are so dramatically
obvious.”

We’re still in the early innings. On a federal level, distributing psychedelic substances in the U.S. can carry first-offense trafficking penalties of up to 40 years in prison and a $5 million fine. 

In the venture capital realm, much funding has been raised
in Canada, where the cannabis movement took root. Psychedelics-focused funds
such as Field Trip Ventures, Numinus, and Tabula Rasa all grew from there. And
Compass Pathways, which is testing psilocybin’s impact on depression and raised
$55 million from the likes of Thiel Capital and Galaxy Ventures’s Michael
Novogratz, is based in London. 

Read
the full story here
.

QUADRICORN ALERT: Or is it a near-Quinticorn alert?

Toast, the Boston-based restaurant management platform,
nearly doubled its valuation to $4.9 billion after raising $400 million in
Series F funding led by Bessemer Venture Partners, TPG, Greenoaks Capital, and
Tiger Global Management.

It’s been about a year since the point-of-sales company
raised $250 million for a $2.7 billion valuation and shortly thereafter made
its first acquisition: HR and payroll software company Stratex.

While Toast’s plan is to ultimately go public, that’s not on
the near-term roadmap, according to CFO Tim Barash—thwarting those in pursuit
of concrete growth metrics and cash flow statements. The company did, however,
tease that revenue grew 109% in 2019, per the press
release
.

Will Toast make another acquisition? Barash says it’s a
possibility.

“There are some companies that want to build everything, and
we are a little biased to building when we can,” he said. “We’re always looking
at interesting companies, though there’s nothing out there we are actively
trying to buy.”

It’ll be interesting to see how the company charts its course as its customer base faces disruption from the gig economy, including ghost kitchens.

Housekeeping: Polina is out until Thursday. Please send Wednesday deals and tips to Lucinda.Shen@fortune.com.

Airbnb had once been the rare Silicon Valley unicorn that had turned a profit.Read More

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