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


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

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.