BenevolentAI, the London-based AI-powered drugs discovery start-up, has struck a deal to list on the Amsterdam’s Euronext exchange via a reverse merger with a Spac (special purpose acquisition company). The deal with the Spac, Odyssey, established by the Zaoui brothers, two investment bankers behind Zaoui & Co, a boutique mergers and acquisitions consultancy, values the London start-up at €1.5 billion.

That will make the reverse merger that will see BenevolentAI take over Odyssey’s Euronext listing Europe’s largest ever. The deal will see Odyssey, which listed on the Amsterdam Euronext in June, invest €300 million in Benevolent. Another €90 million is to be raised in a private placement that will include investors such as UK pharmaceuticals giant AstraZeneca and the Singapore state-backed investment vehicle Temasek.

However, while the €1.5 billion valuation achieved by BenevolentAI will be a record for a European Spac deal it represents a drop on the start-up’s previous valuation as a private company. Three years ago, the drugs discovery company raised $115 million at a $2 million (€1.78 billion) valuation. Neil Woodford’s now disbanded Equity Income fund invested at the time at that valuation.

The Spac deal with Odyssey won’t see any of the current shareholders sell stock with the investors receiving newly issued equity. However, it will see co-founder and serial entrepreneur Ken Mulvany, still a director, and Baroness Shields, the Conservative life peer who is BenevolentAI’s chief executive, among other founders and top executives, realise paper fortunes in the tens to hundreds of millions.

BenevolentAI develops artificial intelligence algorithms that allow scientists to find patterns in huge volumes of data that can help both pinpoint the underlying causes of diseases and come up with better new drugs to treat them faster. The €390 million being raised by the start-up, founded in 2013, will fund the development of its pipeline of over 20 drugs-discovery programmes. They include treatments for atopic dermatitis and ulcerative colitis. It will also invest in its underlying technology.

AstraZeneca, which will invest in the private placement to run alongside the Spac deal, has a collaboration with Benevolent studying chronic kidney disease which will also be expanded. Benevolent’s AI discovered that the arthritis drug baricitinib developed by Eli Lilly could be used as an effective treatment of Covid-19.

While the listing on Euronext is in Amsterdam, Baroness Shields said BenevolentAI is committed to its UK headquarters and may in future also pursue a dual listing in either London or New York.