Washington, D.C.-based Red Cell Partners, an incubator-cum-venture fund, has backed San Diego, Calif.-based mental healthcare firm TARA Mind, in its “mission-driven approach to build companies addressing critical areas of national security and healthcare.”
The four-year-old incubator fund has made portfolio investments in five others — Eprius, Envisagenics, Red 6, Hero Health and Reveal AI. It is also incubating four other startups: Zephyr AI, Savoy Life, DEFCON AI, and Eyris. Red Cell’s investments came from a $91 million incubation fund (RCIF I) it closed in late 2023. So far, the incubator firm has raised over $200 million.
‘Inspired by CIA’
Red Cell was co-founded by health care and defense technology entrepreneur Grant Verstandig, investment management veteran Josh Lobel, and venture capitalist and entrepreneur John Tenet. The firm says it took its name from a post-9/11 operation of the same name run by CIA. Like that program, Red Cell aims to look anew at problems and discover innovative responses. Its leadership team includes former Secretary of Defense and former Raytheon executive Mark Esper, and Alphabet board member Roger Ferguson, who serves as chief investment officer.
Verstandig, 34, serves as Red Cell’s chairman and CEO. He previously founded Rally Health, which was acquired by UnitedHealth Group, and a number of others. His notable ventures include Epirus, an AI-enabled power management company focused on directed energy defense applications; Spycraft Entertainment, a production company focused on intelligence and military operations, and Zephyr AI, a high-growth healthcare technology company aiming to reshape traditional approaches to drug discovery and precision medicine.
The firm’s sharp focus on national defense comes from Verstandig’s longstanding interest and knowledge in that area, and a keen awareness of its shortcomings. Red Cell believes defense remains “fundamentally challenged,” because it is “heavily regulated,” and “saddled with perverse incentives.” Until last fall, he was a senior advisor to the National Security Agency on advanced analytics, technology, and artificial intelligence, and holds several patents in the three areas. Verstandig is a member of the Aspen Institute’s Cybersecurity Group, a public-private forum.
“Over the last decade, staggering advances in technology have improved productivity and reduced cost in nearly every sector,” Verstandig said at the launch of Red Cell. “Yet, during that time, our nation’s most vital industries have been left behind.”
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Red Cell is backed by a roster of national and industrial leaders. Besides former CIA director George Tenet, other advisors and investors include Dr. Sol Barer (co-founder and former CEO of Celgene), Dr. Jack Rowe (former CEO of Aetna), Ken Samet (CEO of MedStar Health), retired Air Force Gen. Paul Selva (vice chairman, joint chiefs of staff), and Yahoo founder and former CEO Jerry Yang.
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TARA Mind, a public benefit corporation, is building a mental healthcare network to enable access to psychedelic-assisted therapy. It has raised $11 million in pre-seed and seed funding so far, and is led by co-founder Marcus Capone, a former Navy SEAL who suffered years of PTSD after being pressed into service in the immediate aftermath of 9/11.
Capone medically retired from active duty in 2013 after 13 years of service in Special Operations, and says he personally benefited from psychedelic therapy, leading him to start TARA Mind. He started his career in finance at Morgan Stanley and Merrill Lynch, and later served as a vice president at Fortress Investment Group.