Valo Health, a drug discovery company that launched less than a year ago, is joining the public markets through a merger deal that values the firm at about $2.8 billion.

The Boston-based company on Wednesday announced an agreement to merge with Khosla Ventures Acquisition, a special purpose acquisition company (SPAC). When the deal closes, the combined company will have a cash balance of about $750 million, before transaction expenses.

Valo aspires to become the first “digitally native” pharmaceutical company, according to an investor presentation. The Valo name likely isn’t familiar to many people but its founding investor, Flagship Pioneering, might be. Flagship is a venture capital firm that has a track record of forming companies that have platform technologies addressing big scientific problems. Perhaps the best-known company to emerge from Flagship is messenger RNA biotech Moderna.

Flagship launched Valo last September, but the company actually began taking shape in 2019 with the acquisition of drug discovery startup Numerate. That San Bruno, California-based company had created a platform with more than 30,000 models, 70 trillion molecules, and more than 25 drug programs. The following year, Valo expanded further with the purchase of assets from Forma Therapeutics, including libraries of compounds and experimental drugs in development.

Samir Kaul, founding partner and managing director at Khosla Ventures, met Valo founder and CEO David Berry at Flagship, where Berry has been a general partner since 2005. In an investor presentation, Berry described the legacy model of drug discovery and development as dated, slow, and expensive. The Valo drug discovery technology, Opal, is intended to achieve better success by taking an approach that puts humans at the center of drug discovery and development.

“We see a lot of efforts that are applying AI cells in the legacy model,” Berry said. “That approach suffers from the same translation issue that it always has—cells are cells, cells are not people, diseases are complicated. We are building a system with the depth to reflect actual diseases in people rather than in an artificial representation.”

Opal does not just design and synthesize molecules. Berry said that the technology runs simulations that a molecule is optimized for its activity against disease, is better processed by the body, and offers low toxicity. The company claims it has built more than 30,000 predictive models, made more than 2 billion predictions.

Patient data form the foundation of Opal; those data are interrogated by artificial intelligence. Berry said Opal yields insights such as identifying key clinical response patterns to a drug and finding patient subpopulations that could be treated by the therapy. Each experiment Opal runs is reentered into the platform; machine learning techniques applied to those experiments makes the system better, smarter, more efficient, Berry said.

While Valo has an internal pipeline of drugs, the company also plans to pursue partnerships with companies interested in leveraging Opal for their own insights. In the future, Berry said he envisions the launch of Opal-enabled software businesses that put the company’s business model “as the default choice for all drug developers and beyond.”

In the nearer term, Valo will focus on the drugs currently in its pipeline. Valo has 17 programs for cardiovascular/metabolic/renal disorders, cancer, and neurodegenerative diseases. The two most advanced programs are both Phase 2 ready: OPL-0301 is in development for acute kidney injury and OPL-0401 is a potential treatment for diabetic complications such as diabetic retinopathy.

According to the investor presentation, Valo plans to start a Phase 2 clinical trial for OPL-0301 in the fourth quarter of this year. A Phase 2 test of OPL-0401 is planned for next year. The company also plans to bring its most advanced cancer program, an immune-oncology candidate called OPL-0101, into the preclinical research that will support an application to begin human testing.

When the merger closes, the combined company’s cash balance will come from about $250 million in Valo’s coffers and about $333 million from Khosla. The new Valo will also raise $168.5 million in a private financing that includes commitments from earlier Valo investors as well as new investors to the company.

Disclosed new investors include Khosla Ventures, NG MGG Strategic, Caz Investments. Returning investors include Koch Disruptive Technologies, Flagship Pioneering, Public Sector Pension Investment Board, Invus, State of Michigan Retirement Systems, HBM Healthcare Investments and Longevity Vision Fund.

The capital raised from the merger will be used to advance development of Valo’s preclinical and clinical assets, develop its software platform, and support the company’s growth plans.

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