UPDATE 1-Valo Health to go public via $2.8 bln SPAC deal

(Adds details on the deal, background)

June 9 (Reuters) - Boston-based Valo Health LLC said on Wednesday it would go public through a merger with a blank-check firm backed by prominent venture capitalist Vinod Khosla, in a deal valuing the combined company at about $2.8 billion.

Founded in 2019, Valo Health is a biotech company that uses data analysis and artificial intelligence to help in drug discovery and development. Its founder, venture capital firm Flagship Pioneering, also has stakes in several other biotech companies, including Moderna Inc.

Valo Health’s platform Opal has a pipeline of candidates across cardiovascular disease, oncology, and neurodegeneration.

Its deal with Khosla Ventures Acquisition Co, a special-purpose acquisition company (SPAC), is expected to deliver proceeds of $168.5 million from investors including Khosla Ventures, NG MGG Strategic and Caz Investments.

SPACs are shell companies that raise money through an IPO to take a private company public. They serve as an alternative for companies looking to enter public markets as SPACs allow them to sidestep a traditional IPO and the hassles attached to it.

Khosla Ventures Acquisition went public in a $300 million initial public offering (IPO) in March.

The SPAC is backed by Khosla Ventures, a venture capital firm founded in 2004 by Sun Microsystems co-founder Vinod Khosla.

Khosla Ventures has invested in numerous high-profile companies such as DoorDash Inc, Opendoor Technologies Inc and Affirm Holdings Inc, all of which went public last year.

Reporting by Dania Nadeem in Bengaluru; Editing by Aditya Soni