French startup Aqemia has raised $38 million in a fresh round of funding, led by San Francisco-based VC firm Cathay Innovation, to accelerate its innovative approach to drug discovery using quantum-inspired physics and machine learning. This brings the company's total funding raised past the $100 million mark, following a €30 million ($31.5 million) raise in January.

Aqemia, founded in Paris in 2019 by Maximilien Levesque and Emmanuelle Rolland-Martiano, is part of a growing trend of startups applying AI to drug discovery. This year alone has seen significant funding rounds for companies like Healx, Formation Bio, and Xaira, demonstrating the industry's enthusiasm for AI-driven drug discovery.

The company's approach combines physics and statistical mechanics algorithms to train a generative AI system, which then helps design potential drug candidates for critical diseases, initially focusing on oncology and immuno-oncology. This approach eliminates the need for experimental data, which is costly and time-consuming, instead using algorithms to generate synthetic data to predict the properties of potential drug molecules and their interactions with targets.

Aqemia has already made significant headway in the industry, signing a multi-year agreement with French pharmaceutical giant Sanofi last December, worth up to $140 million depending on R&D milestones. The fresh funding will enable the company to bolster its recruitment efforts, including the opening of a new office in London in early 2025, providing access to the UK's rich talent pool.

The partnership with Cathay Innovation, a global VC firm, is expected to open doors to new markets, particularly in the U.S. and Asia. "Less than a year after our last round, this successful fundraising and the opening of our new London office mark significant strides toward our ambition to accelerate the discovery of new medicines on a global scale," said Levesque in a statement.

Aside from lead backer Cathay Innovation, Aqemia's latest round saw participation from existing investors Wendel, Bpifrance Large Venture, Eurazeo, and Elaia. The company's innovative approach to drug discovery, combined with its expanding global presence, positions Aqemia as a key player in the rapidly evolving AI-enabled drug discovery landscape.

The AI-driven drug discovery space has seen significant advancements recently, with Google DeepMind CEO Demis Hassabis and Director John Jumper sharing half of the Nobel Prize in chemistry for their work on Alphafold, an AI system that accurately predicts protein structures – a crucial component of drug discovery. As the industry continues to evolve, Aqemia's unique approach and expanding global presence are likely to have a significant impact on the future of drug discovery.