Valo Health and Khosla Ventures Acquisition Co. to Combine and Create Publicly Traded Company Focused on Transforming the Drug Discovery and Development Process

  • Valo is build­ing a ful­ly inte­grat­ed end-to-end human-cen­tric AI-dri­ven drug dis­cov­ery plat­form that aims to improve the suc­cess rates for the dis­cov­ery, devel­op­ment and approval of new drugs
  • Trans­ac­tion rep­re­sents a pro for­ma mar­ket val­ue of approx­i­mate­ly $2.8 bil­lion for the com­bined company
  • Valo antic­i­pates the pro for­ma cash bal­ance of the com­bined com­pa­ny will be approx­i­mate­ly $750 mil­lion before expens­es, includ­ing exist­ing Valo cash, the gross PIPE pro­ceeds and the net cash held in KVAC’s trust, assum­ing no redemptions
  • $168.5 mil­lion ful­ly com­mit­ted PIPE from lead­ing insti­tu­tion­al investors includ­ing: a lead­ing inte­grat­ed health­care deliv­ery net­work, Khosla Ven­tures, NG MGG Strate­gic, Caz Invest­ments, and return­ing investors Koch Dis­rup­tive Tech­nolo­gies, Flag­ship Pio­neer­ing, Pub­lic Sec­tor Pen­sion Invest­ment Board (PSP), Invus, State of Michi­gan Retire­ment Sys­tems, HBM Health­care Invest­ments and Longevi­ty Vision Fund
  • Net pro­ceeds expect­ed to be used to acceler­ate the devel­op­ment of Valo’s pro­pri­etary tech­nol­o­gy plat­form and fur­ther scale its ther­a­peu­tic and data strat­e­gy programs
  • Valo’s Opal com­pu­ta­tion­al plat­form is pow­ered by human-cen­tric data com­pris­ing sig­nif­i­cant lon­gi­tu­di­nal data and omic data to enable dis­cov­ery, design, and devel­op­ment of drugs on a sin­gle plat­form span­ning the full ther­a­peu­tic dis­cov­ery and devel­op­ment process
  • Valo and Khosla Ven­tures Acqui­si­tion Co. believe AI and high through­put automa­tion, meld­ed with tra­di­tion­al drug devel­op­ment exper­tise, have the poten­tial to trans­form the drug dis­cov­ery and devel­op­ment industry
  • Samir Kaul, Found­ing Part­ner and Man­ag­ing Direc­tor at Khosla Ven­tures to join Valo’s Board of Direc­tors fol­low­ing the com­ple­tion of the busi­ness combination

BOSTON, MA (June 9, 2021) – Valo Health, LLC (“Valo”), the tech­nol­o­gy com­pa­ny using human-cen­tric data and arti­fi­cial intel­li­gence (AI) pow­ered com­pu­ta­tion to trans­form the drug dis­cov­ery and devel­op­ment process, and Khosla Ven­tures Acqui­si­tion Co. (“KVAC”) (NAS­DAQ: KVSA), a spe­cial pur­pose acqui­si­tion com­pa­ny found­ed by affil­i­ates of Khosla Ven­tures, LLC, announced today that they have entered into a defin­i­tive merg­er agreement. 

A Flag­ship Pio­neer­ing com­pa­ny, Valo is build­ing a ful­ly inte­grat­ed, end-to-end approach to devel­op­ing drugs from tar­get dis­cov­ery through approval using its Opal Com­pu­ta­tion­al Plat­form™. Built on large scale, high-qual­i­ty lon­gi­tu­di­nal and omics data, Valo’s Opal plat­form is designed to accel­er­ate the rate of drug dis­cov­ery com­pared to that of tra­di­tion­al oper­a­tors, by allow­ing infor­ma­tion and data to be shared in par­al­lel at every stage of the drug dis­cov­ery and devel­op­ment process, reduc­ing the depen­den­cy on sur­ro­gates, and enabling insights across pre­clin­i­cal and clin­i­cal to dri­ve towards ther­a­peu­tic suc­cess. Valo has built an inter­nal pipeline with two clin­i­cal-stage assets and 15 pri­or­i­tized pre-clin­i­cal assets across car­dio­vas­cu­lar meta­bol­ic renal, neu­rode­gen­er­a­tion and oncol­o­gy fields, as well as a deep pipeline of addi­tion­al can­di­dates. This trans­ac­tion posi­tions Valo to use the full pow­er of tech­nol­o­gy to accel­er­ate mul­ti­ple pro­grams through clin­i­cal trials. 

David Berry, CEO of Valo, said:

We see this part­ner­ship with KVAC as a unique and fan­tas­tic oppor­tu­ni­ty to bring the future for­ward to trans­form and accel­er­ate the dis­cov­ery and devel­op­ment of life-chang­ing ther­a­peu­tics. Khosla’s rep­u­ta­tion is sec­ond to none for build­ing and invest­ing in trans­for­ma­tion­al tech­nol­o­gy-enabled busi­ness­es, and we believe this part­ner­ship helps real­ize our vision — of accel­er­at­ing the cre­ation of life chang­ing drugs.”

Samir Kaul, Found­ing Part­ner and Man­ag­ing Direc­tor at Khosla Ven­tures, said: 

Khosla Ven­tures invests in bold, ear­ly & impact­ful com­pa­nies and believes Valo meets these cri­te­ria. Valo is build­ing an end-to-end ful­ly inte­grat­ed com­pu­ta­tion­al approach to drug dis­cov­ery and devel­op­ment – one built on human data through­out the entire process. They have already estab­lished an impres­sive line­up of clin­i­cal and ear­ly dis­cov­ery ther­a­peu­tic pro­grams. By bring­ing pow­er­ful com­pu­ta­tion­al approach­es and human data across the life­cy­cle of drug dis­cov­ery and devel­op­ment – aim­ing to reduce time, cost and risk to pro­grams — Valo offers to poten­tial­ly change the val­ue curve for a tril­lion-dol­lar mar­ket seg­ment. Valo fits square­ly into the com­pa­nies we are excit­ed to back and bring our expe­ri­ence to.”

KVAC set out to part­ner with a pri­vate, high qual­i­ty growth com­pa­ny that intends to address a large mar­ket oppor­tu­ni­ty with high­ly dif­fer­en­ti­at­ed and pro­pri­etary tech­nol­o­gy. KVAC believes there are a num­ber of deeply tech­ni­cal sec­tors, includ­ing phar­ma­ceu­ti­cals, cli­mate, food, and oth­ers, where scale cap­i­tal can accel­er­ate growth, and where a SPAC vehi­cle pro­vides a more opti­mized financ­ing trans­ac­tion than tra­di­tion­al pub­lic financ­ings. KVAC believes that the Valo accel­er­a­tion mod­el, dri­ven by human-cen­tric data and com­pu­ta­tion, offers a scal­able and dif­fer­en­ti­at­ed drug devel­op­ment mod­el that meets these cri­te­ria — and cou­pled with the company’s pre­clin­i­cal and clin­i­cal pro­grams, has the com­pa­ny well-posi­tioned for growth. With two in-licensed clin­i­cal-stage assets and 15 pre­clin­i­cal pro­grams across car­dio­vas­cu­lar meta­bol­ic renal, oncol­o­gy, and neu­rode­gen­er­a­tive dis­eases, KVAC believes Valo meets both of the fore­go­ing cri­te­ria. KVAC and Valo believe that AI and high through­put automa­tion, meld­ed with tra­di­tion­al drug devel­op­ment exper­tise, will improve drug dis­cov­ery in a dra­mat­ic way, reduce the sig­nif­i­cant fail­ure rate inher­ent in tra­di­tion­al drug devel­op­ment, improve return on research invest­ment and increase drug approvals. KVAC believes that Valo’s use of AI across its pipeline from tar­get dis­cov­ery and ther­a­peu­tic devel­op­ment, to clin­i­cal devel­op­ment, tri­al design, and patient care, gives Valo sig­nif­i­cant advan­tages over com­pa­nies that have large­ly focused AI on try­ing to improve sin­gle points of the ther­a­peu­tic pipeline. Fur­ther, KVAC is excit­ed to part­ner with Flag­ship Pio­neer­ing, which found­ed Valo, Indi­go, Mod­er­na, and more than 100 sci­ence-based busi­ness­es, to help Valo rev­o­lu­tion­ize the phar­ma­ceu­ti­cal industry.

Trans­ac­tion Overview

The trans­ac­tion val­ues the com­bined com­pa­ny at a pro for­ma mar­ket val­ue of approx­i­mate­ly $2.8 bil­lion. The com­bined com­pa­ny is antic­i­pat­ed to have a pro for­ma cash bal­ance of approx­i­mate­ly $750 mil­lion before deduct­ing antic­i­pat­ed trans­ac­tion expens­es, includ­ing exist­ing Valo cash of approx­i­mate­ly $250 mil­lion as of the date here­of, approx­i­mate­ly $333 mil­lion of net cash held in KVAC’s trust, after deduct­ing deferred under­writ­ing com­mis­sions and assum­ing no redemp­tions, and a $168.5 mil­lion pri­vate invest­ment in pub­lic equi­ty (“PIPE”) priced at $10.00 per share. Insti­tu­tion­al and strate­gic investors or their affil­i­ates and exist­ing Valo share­hold­ers that have com­mit­ted to par­tic­i­pate in the PIPE include a lead­ing inte­grat­ed health­care deliv­ery net­work, Khosla Ven­tures, NG MGG Strate­gic, Caz Invest­ments, and return­ing investors Koch Dis­rup­tive Tech­nolo­gies, Flag­ship Pio­neer­ing, Pub­lic Sec­tor Pen­sion Invest­ment Board (PSP Invest­ments), Invus, State of Michi­gan Retire­ment Sys­tems, HBM Health­care Invest­ments and Longevi­ty Vision Fund. Net pro­ceeds from this trans­ac­tion after trans­ac­tion expens­es will be used to advance Valo’s pre­clin­i­cal and clin­i­cal assets, devel­op its soft­ware plat­form, sup­port new and exist­ing growth ini­tia­tives and work­ing cap­i­tal, and oth­er gen­er­al purposes.

The spon­sor of KVAC has agreed to a 12-month lock-up fol­low­ing the acqui­si­tion, with ear­ly release based on the achieve­ment of per­for­mance tar­gets, as fur­ther dis­cussed in the KVAC prospec­tus. The spon­sor has also agreed to sub­ject half of its spon­sor pro­mote to a tiered struc­ture that rewards suc­cess at per­for­mance vest­ing thresh­olds, sig­nif­i­cant­ly above the cur­rent stock price fur­ther detailed in the prospec­tus. In addi­tion, the KVAC spon­sor is sup­port­ing the SPAC with a $25 mil­lion for­ward pur­chase agree­ment back­stop and KVAC has no warrants.

The clos­ing of this trans­ac­tion is antic­i­pat­ed to occur in the third quar­ter of 2021 and is sub­ject to the approval of KVAC’s stock­hold­ers and the sat­is­fac­tion or waiv­er of cer­tain oth­er cus­tom­ary clos­ing conditions.

Samir Kaul, Found­ing Part­ner and Man­ag­ing Direc­tor at Khosla Ven­tures, is expect­ed to join Valo’s Board of Direc­tors fol­low­ing the com­ple­tion of the busi­ness combination.

Addi­tion­al infor­ma­tion about the pro­posed trans­ac­tion, includ­ing a copy of the Busi­ness Com­bi­na­tion Agree­ment and an investor pre­sen­ta­tion, will be pro­vid­ed in a Cur­rent Report on Form 8‑K to be filed today by KVAC with the Secu­ri­ties and Exchange Com­mis­sion (“SEC”) and avail­able at www​.sec​.gov.


J.P. Mor­gan Secu­ri­ties LLC is serv­ing as the finan­cial advi­sor to Valo and as KVAC’s sole place­ment agent for the PIPE. Good­win Proc­ter LLP is act­ing as legal coun­sel to Valo. Lath­am & Watkins LLP is act­ing as legal coun­sel to KVAC. Coo­ley LLP is act­ing as legal coun­sel to the place­ment agent. 

Pre­sen­ta­tion Details

Valo and KVAC’s joint investor con­fer­ence call to dis­cuss the pro­posed trans­ac­tion can be accessed via web­cast at: 


and Valos’s web­site: https://​www​.val​o​health​.com/inv…

About Valo Health

Valo Health, LLC (“Valo”) is a tech­nol­o­gy com­pa­ny built to trans­form the drug dis­cov­ery and devel­op­ment process using human-cen­tric data and arti­fi­cial intel­li­gence (“AI”) com­pu­ta­tion. As a dig­i­tal­ly native com­pa­ny, Valo aims to ful­ly inte­grate human-cen­tric data across the entire drug devel­op­ment life­cy­cle into a sin­gle uni­fied archi­tec­ture, there­by accel­er­at­ing the dis­cov­ery and devel­op­ment of life-chang­ing drugs while simul­ta­ne­ous­ly reduc­ing the cost, time, and fail­ure rate. The com­pa­ny’s Opal Com­pu­ta­tion­al Plat­form™ con­sists of an inte­grat­ed set of capa­bil­i­ties designed to trans­form data into valu­able insights that may accel­er­ate dis­cov­er­ies and enable Valo to advance a robust pipeline of pro­grams across car­dio­vas­cu­lar meta­bol­ic renal, oncol­o­gy, and neu­rode­gen­er­a­tive dis­ease. Found­ed by Flag­ship Pio­neer­ing and head­quar­tered in Boston, MA, Valo also has offices in Lex­ing­ton, MA, San Fran­cis­co, CA, Prince­ton, NJ, and in Bran­ford, CT. To learn more, vis­it www​.val​o​health​.com.

About Khosla Ven­tures Acqui­si­tion Co.

Khosla Ven­tures Acqui­si­tion Co. (“KVAC”) is a spe­cial pur­pose acqui­si­tion com­pa­ny spon­sored by affil­i­ates of Khosla Ven­tures, LLC. Khosla Ven­tures man­ages a series of ven­ture cap­i­tal funds that make ear­ly-stage ven­ture cap­i­tal invest­ments and pro­vide strate­gic advice to entre­pre­neurs build­ing com­pa­nies with last­ing sig­nif­i­cance. The firm was found­ed in 2004 by Vin­od Khosla, co-founder of Sun Microsys­tems. Khosla Ven­tures has over $14 bil­lion dol­lars of assets under man­age­ment and focus­es on a broad range of sec­tors includ­ing arti­fi­cial intel­li­gence, agriculture/​food, con­sumer, enter­prise, finan­cial ser­vices, health, space, sus­tain­able ener­gy, robot­ics, VR/AR and 3D print­ing. Col­lec­tive­ly, Khosla Ven­tures port­fo­lio of invest­ments has cre­at­ed near­ly half a tril­lion dol­lars in mar­ket value. 

The mis­sion of Khosla Ven­tures is to be bold, ear­ly and impact­ful and to part­ner with new com­pa­nies seek­ing to pos­i­tive­ly impact the human con­di­tion through tech­nol­o­gy. Khosla Ven­tures is an investor and close part­ner to a num­ber of lead­ing com­pa­nies in machine learn­ing and robot­ics, includ­ing Berk­shire Grey and Ope­nAI. With a spe­cial focus on bio­med­ical appli­ca­tions of AI and automa­tion, Khosla Ven­tures is con­tin­u­ing to part­ner with com­pa­nies at mul­ti­ple stages of devel­op­ment, span­ning diag­nos­tics com­pa­nies like AliveCor in ECG and Cap­tion Health in ultra­sound, through lab automa­tion com­pa­nies like Open­Trons, into machine learn­ing dri­ven ther­a­peu­tics com­pa­nies like Atom­wise and Deep Genomics. 

Addi­tion­al Infor­ma­tion and Where to Find It

This press release relates to a pro­posed trans­ac­tion between Valo and KVAC. This press release does not con­sti­tute an offer to sell or exchange, or the solic­i­ta­tion of an offer to buy or exchange, any secu­ri­ties, nor shall there be any sale of secu­ri­ties in any juris­dic­tion in which such offer, sale or exchange would be unlaw­ful pri­or to reg­is­tra­tion or qual­i­fi­ca­tion under the secu­ri­ties laws of any such juris­dic­tion. KVAC intends to file a reg­is­tra­tion state­ment on Form S‑4 with the SEC, which will include a doc­u­ment that serves as a prospec­tus and proxy state­ment of KVAC, referred to as a proxy statement/​prospectus. A proxy statement/​prospectus will be sent to all KVAC share­hold­ers. KVAC also will file oth­er doc­u­ments regard­ing the pro­posed trans­ac­tion with the SEC. Before mak­ing any vot­ing deci­sion, investors and secu­ri­ty hold­ers of KVAC are urged to read the reg­is­tra­tion state­ment, the proxy statement/​prospectus and all oth­er rel­e­vant doc­u­ments filed or that will be filed with the SEC in con­nec­tion with the pro­posed trans­ac­tion as they become avail­able because they will con­tain impor­tant infor­ma­tion about the pro­posed transaction.

Investors and secu­ri­ty hold­ers will be able to obtain free copies of the reg­is­tra­tion state­ment, the proxy statement/​prospectus and all oth­er rel­e­vant doc­u­ments filed or that will be filed with the SEC by KVAC through the web­site main­tained by the SEC at www​.sec​.gov.

The doc­u­ments filed by KVAC with the SEC also may be obtained free of charge at KVAC’s web­site at https://khoslaventuresacquisit… or upon writ­ten request to Sec­re­tary at Khosla Ven­tures Acqui­si­tion Co., 2128 Sand Hill Road, Men­lo Park, Cal­i­for­nia 94025.

Par­tic­i­pants in Solicitation

KVAC and its direc­tors and exec­u­tive offi­cers may be deemed to be par­tic­i­pants in the solic­i­ta­tion of prox­ies from KVAC’s share­hold­ers in con­nec­tion with the pro­posed trans­ac­tion. A list of the names of such direc­tors and exec­u­tive offi­cers and infor­ma­tion regard­ing their inter­ests in the busi­ness com­bi­na­tion will be con­tained in the proxy statement/​prospectus when avail­able. You may obtain free copies of these doc­u­ments as described in the pre­ced­ing paragraph.

For­ward-Look­ing Statements

This press release con­tains cer­tain for­ward-look­ing state­ments with­in the mean­ing of the fed­er­al secu­ri­ties laws with respect to the pro­posed trans­ac­tion between Valo and KVAC, includ­ing state­ments regard­ing the antic­i­pat­ed ben­e­fits of the trans­ac­tion, the antic­i­pat­ed tim­ing of the trans­ac­tion, expect­ed use of pro­ceeds, future finan­cial con­di­tion and per­for­mance of Valo and expect­ed finan­cial impacts of the trans­ac­tion (includ­ing pro for­ma enter­prise val­ue and cash bal­ance), the sat­is­fac­tion of clos­ing con­di­tions to the trans­ac­tion, the PIPE trans­ac­tion, the lev­el of redemp­tions of KVAC’s pub­lic share­hold­ers and expect­ed future per­for­mance and mar­ket oppor­tu­ni­ties of Valo. These for­ward-look­ing state­ments gen­er­al­ly are iden­ti­fied by the words believe,” project,” expect,” antic­i­pate,” esti­mate,” intend,” strat­e­gy,” future,” oppor­tu­ni­ty,” plan,” may,” should,” will,” would,” will be,” will con­tin­ue,” will like­ly result,” and sim­i­lar expres­sions. For­ward-look­ing state­ments are pre­dic­tions, pro­jec­tions and oth­er state­ments about future events that are based on cur­rent expec­ta­tions and assump­tions and, as a result, are sub­ject to risks and uncer­tain­ties. Many fac­tors could cause actu­al future events to dif­fer mate­ri­al­ly from the for­ward-look­ing state­ments in this press release, includ­ing but not lim­it­ed to: (i) the risk that the trans­ac­tion may not be com­plet­ed in a time­ly man­ner or at all, which may adverse­ly affect the price of KVAC’s secu­ri­ties, (ii) the risk that the trans­ac­tion may not be com­plet­ed by the busi­ness com­bi­na­tion dead­line and the poten­tial fail­ure to obtain an exten­sion of the busi­ness com­bi­na­tion dead­line if sought by either par­ty, (iii) the fail­ure to sat­is­fy the con­di­tions to the con­sum­ma­tion of the trans­ac­tion, includ­ing the approval of the merg­er agree­ment by the share­hold­ers of KVAC, the sat­is­fac­tion of the min­i­mum trust account amount fol­low­ing any redemp­tions by KVAC’s pub­lic share­hold­ers and the receipt of cer­tain gov­ern­men­tal and reg­u­la­to­ry approvals, (iv) the lack of a third par­ty val­u­a­tion in deter­min­ing whether or not to pur­sue the pro­posed trans­ac­tion, (v) the inabil­i­ty to com­plete the PIPE trans­ac­tion, (vi) the occur­rence of any event, change or oth­er cir­cum­stance that could give rise to the ter­mi­na­tion of the merg­er agree­ment, (vii) the effect of the announce­ment or pen­den­cy of the trans­ac­tion on Val­o’s busi­ness rela­tion­ships, oper­at­ing results, and busi­ness gen­er­al­ly, (viii) risks that the pro­posed trans­ac­tion dis­rupts cur­rent plans and oper­a­tions of Valo, (ix) the out­come of any legal pro­ceed­ings that may be insti­tut­ed against Valo or against KVAC relat­ed to the merg­er agree­ment or the pro­posed trans­ac­tion, (x) the abil­i­ty to main­tain the list­ing of KVAC’s secu­ri­ties on a nation­al secu­ri­ties exchange, (xi) changes in the com­pet­i­tive and reg­u­lat­ed indus­tries in which Valo oper­ates, vari­a­tions in oper­at­ing per­for­mance across com­peti­tors, changes in laws and reg­u­la­tions affect­ing Val­o’s busi­ness and changes in the com­bined cap­i­tal struc­ture, (xii) the abil­i­ty to imple­ment busi­ness plans and oth­er expec­ta­tions after the com­ple­tion of the pro­posed trans­ac­tion, and iden­ti­fy and real­ize addi­tion­al oppor­tu­ni­ties, (xiii) the risk of down­turns and a chang­ing reg­u­la­to­ry land­scape in the high­ly com­pet­i­tive drug dis­cov­ery and devel­op­ment indus­try, and (ix) costs relat­ed to the trans­ac­tion and the fail­ure to real­ize antic­i­pat­ed ben­e­fits of the trans­ac­tion or to real­ize esti­mat­ed pro for­ma results and under­ly­ing assump­tions, includ­ing with respect to esti­mat­ed share­hold­er redemp­tions. The fore­go­ing list of fac­tors is not exhaus­tive. You should care­ful­ly con­sid­er the fore­go­ing fac­tors and the oth­er risks and uncer­tain­ties described in the Risk Fac­tors” sec­tion of the reg­is­tra­tion state­ment on Form S‑4 dis­cussed above and oth­er doc­u­ments filed by KVAC from time to time with the SEC. These fil­ings iden­ti­fy and address oth­er impor­tant risks and uncer­tain­ties that could cause actu­al events and results to dif­fer mate­ri­al­ly from those con­tained in the for­ward-look­ing state­ments. For­ward-look­ing state­ments speak only as of the date they are made. Read­ers are cau­tioned not to put undue reliance on for­ward-look­ing state­ments, and Valo and KVAC assume no oblig­a­tion and do not intend to update or revise these for­ward-look­ing state­ments, whether as a result of new infor­ma­tion, future events, or oth­er­wise. Nei­ther Valo nor KVAC gives any assur­ance that either Valo or KVAC, or the com­bined com­pa­ny, will achieve its expectations.

Con­tact Information

Investor Con­tact: Graeme Bell, CFO, Gbell@​valohealth.​com

Peter Buck­land, CFO, information@​khoslaventures.​com