US-China biotech startup XtalPi lands $15M from Google, Tencent and Sequoia

Google continues to increase its presence in China after it joined Sequoia China and Tencent in a $15 million investment for XtalPi, a U.S.-China biotech firm that uses artificial intelligence and computing to accelerate the development of new drugs.

The search giant remains blocked in China, but that hasn’t stopped it from making a series of moves in recent months. It is opening an AI lab in the country and now it has made a second significant investment in recent months by backing XtalPi, which was founded in 2014 by three Chinese MIT graduates.

The company has 60 staff across offices in Cambridge, Beijing and Shenzhen. It uses a combination of AI, quantum physics algorithms and cloud computing to predict the structure of drug molecules once they are crystalized, which it turn affects a drug’s stability and other characteristics that determine its chances of making it to market.

Beyond its design focus — which makes the drug development process more efficient and accurate for pharma companies — XtalPi also works on drug discovery.

“We believe that algorithmic power is the key to finding smarter, more effective routes for drug research and development, and we are focused on building a computational engine that empowers and expedites pharmaceutical innovation for companies worldwide,” XtalPi co-founder and chairman of the board Dr. Shuhao Frank Wen explained in a statement.

To give an idea of its computing focus, a spokesperson told TechCrunch that XtalPi has built an elastic HPC (high performance computing) cloud that can deploy up to one million cores across AWS, Tencent cloud, Google Cloud and Alibaba Cloud.

The startup previously raised a $5 million Series A round by Tencent in late 2015, prior to that, social network Renren led its seed investment. It counts ZhenFund and FreeS Fund as other investors.

This new round — which takes XtalPi to $20 million from investors to date — will go towards using big data from XtalPi’s high-precision computing platform to develop new computational models. It will also help expand its footprint into new segments in the pharma industry.

XtalPi said it is working on a “prediction-driven research lab” that will combine its R&D with lab technology to get more precise and rounded results and predictions.

The deal is the first collaboration between Google and Tencent since they agreed to a patent agreement last week.

Google backed live-streaming Chushou in December in its first China-based investment since a deal with Mobvoi back in 2015. Beyond its planned AI lab, Google has also opened a small office in Shenzhen. The company operates larger bases in Beijing and Shanghai.

There’s no immediate word on whether the round will see XtalPi work directly with Google and Tencent, both of which have invested significantly in AI, but you’d imagine collaboration is on the horizon at some point.

Note: Article updated to correct Series A round size.