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ATAI Life Sciences, a  Berlin-based startup focused on developing psychedelic drugs to treat mental health disorders, said that it had closed a $125 million funding round on Monday.

The Series C financing round for Atai was led by Apeiron Investment Group, the family office of the startup's founder, Christian Angermayer,  billionaire investor Peter Thiel, and Catalio Capital Management.

Florian Brand, CEO & Co-Founder of ATAI Life Sciences said, "We are grateful to have the strong support of both new and existing investors, comprised of forward-thinking individuals that share in our belief that innovation in mental healthcare is urgently needed and possible."

"We believe that our psychedelic and non-psychedelic compounds have compelling therapeutic promise based upon a growing body of scientific evidence. This round of funding is another step towards our vision to effectively treat and ultimately prevent mental health disorders, bridging the gap between what the mental health system currently provides and what patients need," he added.

Funding for the deal reached $125 million, larger than the $80 million raised by Compass, announced in April. It also surpassed the $30 million raised by nonprofit groups, the Multidisciplinary Association for Psychedelic Studies and the Psychedelic Science Funders Collaborative.

“ATAI’s great virtue is to take mental illness as seriously as we should have been taking all illness all along. The company’s most valuable asset is its sense of urgency," said Thiel, the co-founder of  PayPal Holdings (NASDAQ: PYPL) and Palantir Technologies (NYSE: PLTR).

The impact of COVID-19 pandemic

ATAI obtained the funding as the COVID-19 pandemic continues to bring light to the mental health problems affecting individuals.

"With Covid-19 only accentuating the failures of existing standards of care, we are at an inflection point when it comes to seriously address this global mental health crisis," said Angermayer.

ATAI is an investor of  and other psychedelic drug developers

According to ATAI, it will use the money to expand its existing areas of research and the range of possible drugs that the companies it supports might use to treat mental health disorders.

It will also use the funding to help Perception Neuroscience gain more insights on the effects of arketamine when used on treatment-resistant depression. Arketamine is a variant of the rave drug and anesthetic ketamine.

The proceeds would also offer similar help to DemeRx, which is examining the effects of ibogaine on opioid abuse. Ibogaine is a psychoactive substance found in an African shrub.