I have to admit to being fascinated by the machinations around last week’s Instacart IPO.
Given the dearth of IPOs in 2023, Instacart’s IPO is a big deal. Prior to the deal, Instacart had raised more than $2.9 billion in funding over 10 years and 20 rounds. It’s a testament to the grit and determination of the Instacart team and to the staying power of its investors.
There is a caveat. According to Axios, many investors would have been better off just putting money in an S&P 500 index fund. Instacart’s valuation just prior to the IPO was priced $9.3 billion. That’s down sharply from a $39 billion valuation in March 2021. Ouch!
Here are my hot takes on Instacart’s IPO, which is off to a bumpy start.
Observation 1: Building value takes time.
Instacart was founded in 2013 and completed its IPO in 2023. That’s a decade of hard work. As of September 22, 2023, the company had a market cap of $8.31 billion (more on this later). It’s important to remember that for every Instacart, there are many other companies that fail, many fail sooner and some later.
Kudos to the Instacart team for sticking with it and building a successful company. It’s not easy, but it’s definitely worth it if and when you achieve your goals.
Observation 2: Annual revenue and growth rate.
Instacart’s revenue increased nearly 40% to $2.55 billion between 2021 and 2022. That’s impressive growth, especially for a company of Instacart’s size. The company has a large and growing addressable market, and there’s a belief that it’s well-positioned to capitalize on the shift to online grocery shopping.
Revenue growth solves a lot of questions around product market fit and is rewarded in the market AND founders, investors and boards should be conscious about capital efficiency.
Observation 3: Bumps in the road.
Of course, no company’s journey is smooth. Instacart has had its share of bumps along the way. For example, the company was sued by the California attorney general in 2019 for allegedly misclassifying its workers as independent contractors. Instacart overcame this challenge and others and emerged stronger. It’s now one of the leading players in the online grocery shopping market.
Observation 4: Who made a winning bet?
Earlier investors in Instacart are definitely the winners in this IPO. Investors (likely before 2015) are now pretty happy with the outcome. Sequoia led the Series A in 2013 at $0.24 per share. Later investors (after 2015) paid $125.00 per share in the infamous March 2021 funding round, which valued the company at $38.5 billion.
Brick-and-mortar grocers in the United States accounted for 85.3% of total grocery sales as of January 2023, so 14.7% came from on-line, which includes categories like click-and-collect and delivery. You need to believe that convenience will drive adoption in this market for it to expand.
Observation 5: Signal the IPO market may be returning.
The Instacart IPO is a sign that the IPO market may be thawing. After a slow start to the year, we’ve seen several high-profile IPOs in recent months. This is good news for investors, as it means the path for generating liquidity via M&A or IPO activity may be opening up.
Observation 6: Smart or lucky.
Instacart clearly benefited from the COVID pandemic. No matter how much diligence an investor could have completed, COVID was a six-sigma event in the way it benefited Instacart. Instacart went from losing $300 million the year before COVID to turning a profit in April of 2020. COVID made Instacart an essential app. This team was in the right spot, at the right time, with the right offering.
What was the perspective of an investor in 2013 who made an early bet in Instacart?
An investor who bet on Instacart in 2013 was taking a big risk. The company was new, the online grocery shopping market was unproven, and there was no guarantee that Instacart would be successful. But the investor saw potential in the CEO’s vision. They believed that Instacart could revolutionize the way people shop for groceries.
Eventually, the investor was right. Can you imagine the outlook for this company in December 2021? Instacart has become one of the leading players in the online grocery shopping market. The company is now worth billions.
Even if you’re not an Instacart user, you should still be excited about the company’s IPO. Instacart is a leading player in the online grocery shopping market. The growth of online grocery shopping is a trend that investors need to continue paying attention to.
If you’re an Instacart user, I salute you. If you’re lazy like me, you can use technology to make your life easier. I just signed up for Instacart. So in that regard, I may be a laggard in technology adoption, but I do see the appeal of Instacart. It’s a convenient way to get your groceries delivered to your door. And it’s especially helpful for busy people or those who have difficulty getting to the grocery store.
Some advice:
If you are an entrepreneur or innovator, listen to your customers, keep building and have conviction around the problem you solve.
If you are an investor, keep your expectations realistic, keep taking risks and find conviction.
Justin Wiseman, CEO of MS Pen, has a long history with VisionTech Angels. While CEO and president of Prosolia, a Purdue startup that developed molecular imaging tools, he pitched the company to StepStone Partners, our group’s previous brand. Though we didn’t invest, he led Prosolia to a successful exit to Waters Corporation in 2018. Elevate Ventures suggested VisionTech take a look at his new venture, MS Pen, which seeks to diagnose tumors intraoperatively—in real time, during surgery. If successful, this technology has the potential to improve cancer survival rates and reduce healthcare costs. I liked MS Pen’s vision and pedigree, so I invited Justin to a VisionTech Angels Screening Committee. The group was impressed with the company’s vision to radically transform tissue diagnostics starting with lung cancer and invited him to present at our September 6 pitch events. Here’s a preview.
BP: Tell me a little about yourself. JW: I was born and raised in Indianapolis, went to Southport High School, worked at Lilly, before earning a PhD in Analytical Chemistry at Purdue University. During graduate school, I developed some technology that was spun out as a startup company, Prosolia. After seven years as president and CEO, the company had a positive exit to Waters, a tech company and leading provider of lab equipment, supplies, and software for scientists across the world.
In 2022, I was approached by the founders of MS Pen to help them scale the company. What’s interesting is the inventor of the mass spectrometry pen technology, which is the basis of MS Pen, is Dr. Livia Eberlin, who was a graduate student at Purdue. We had the same academic advisor and worked with some of the same people while in graduate school at Purdue. After meeting the team and reviewing the technology and vision to make molecular data on tissue samples available in real time during surgery to optimize treatment options for patients and improve survival rates, I was in.
BP: Explain the problem you are solving. JW: This will sound crazy, but modern cancer surgery still relies on a legacy, 117-year-old method to assess tumor margins during surgery. Here’s how it works. Surgeons remove suspected tissue from the patient, with the goal of complete removal of the tumor while preserving the surrounding margin of healthy tissue. A sample of the margin is sent to the laboratory where it’s frozen, cut, stained, and looked at under a microscope by a pathologist. At a minimum, it takes 30 to 45 minutes for the lab to process the sample while the patient is still in surgery. After that long wait, the results are still somewhat inconclusive. The extra time that the patient is in the operating room is unnecessary and increases the risk of post-operative complications. The biggest reason we need a precision medicine approach is locoregional cancer recurrence can be as high as 40%. This is not comforting for patients.
BP: Explain your offering and how it works. JW: MS Pen is developing a platform for tissue detection and diagnosis that combines the simplicity of our proprietary MasSpec Pen technology, the performance of mass spectrometry, and the power of AI/ML software. Our solution exploits the fundamentals of tumor biology to detect cancer on a molecular level in vivo to guide surgical decision making in real-time. Our initial focus is lung cancer, a deadly disease that claims more lives in the US and TX than breast, colon and prostate cancer combined, and where curative resection is highly dependent on intraoperative decision making. Using a hand-held device called the MasSpec Pen, a droplet of biocompatible solution is delivered to the tissue site. Diagnostic molecules are extracted from the tissue into the droplet. The droplet with the diagnostic molecules is delivered to the mass spectrometer for real-time analysis. The surgeon gets the results in seconds rather than hours or days. This allows the surgeon to make decisions based on the molecular patterns driving the disease rather than relying on what they see or feel in a patient and without waiting on the lab to get results back.
There are three main components of our solution: the MasSpec™ Pen, which can be handheld or robotic; the transportable medical mass spectrometry system console we call Ultiss™ that the pen is connected to; and the software powered by artificial intelligence and machine learning algorithms interpreting the data from the sample. The platform is easy to use, and is a faster, less intrusive and more accurate process.
BP: Why did you choose lung cancer as your first indication? JW: The platform is tissue agnostic, so we could have chosen any number of cancers including breast or pancreatic but decided on lung cancer as our first indication. Looking at the numbers, more Americans die of lung cancer each year—127,070—which is three times that of the second deadliest cancer, colorectal. Another factor is surgery is the number one treatment for lung cancer and there’s a more than 50% recurrence rate. We believe there’s lots of room for improvement in the first surgery if using the MS Pen platform when margins can be checked and validated with a high degree of accuracy.
Globally, the intraoperative lung cancer detection serviceable market is $2.1 billion, total addressable market is $6 billion.
BP: What are your competitive advantages? JW: Our fundamental competitive advantages are these. First, traditional methods involve taking a tissue sample and sending it to the lab during or post-surgery and don’t permit in vivo analysis of tissue prior to or during resection—taking a tissue sample while the patient is still undergoing surgery. MS Pen does not require a tissue sample and results are available at the point of care immediately.
The analysis done by MS pen is non-destructive to the tissue of interest or any surrounding tissue. No injectable products are required for our test. Finally, using the MS Pen platform during surgery does not disrupt traditional surgical workflows. The device is wheeled in and out of the operating room. The pen is handed to the surgeon just like any other instrument. It’s disposable so once used, you’re done.
BP: What is your path to commercialization? JW: The good news is that the MS Pen and platform are already being used in research by the Baylor College of Medicine, MD Anderson Cancer Center at the University of Texas and Johns Hopkins School of Medicine. To date, more than 20 surgeons have used the system with more than 200 patients. We’ve had more than 250 inquiries from around the world over the last 15 months. This includes Stanford Medical, the Mayo Clinic, Yale School of Medicine, Kings College London, and University of Bern in Switzerland to name a few.
To leverage this early traction, we’re launching a plug-and-play interface platform called Uniss™ for direct molecular analysis targeting clinical research in early 2024. The follow up is under development, an advanced data analytic and machine learning software to convert the complex metabolic data into actionable results. By 2006, we plan to launch the Ultiss™, an integrated platform that combines our MasSpec pen, a compact mass spectrometer and machine learning decision support software.
BP: Do you have IP protection? JW: Our IP protection is very broad on the device and how it works. We currently have six patents with more than 50 patents pending. Six or seven of those should be issued by the end of August.
BP: Any competitors? JW: Obviously, we aren’t the only ones who realize traditional pathology isn’t cutting it for surgeons and patients. We have at least four competitors trying to solve this issue, but none have the breadth of feature sets than MS Pen does. With our growing presence in clinical research with top medical and cancer centers, we believe we are ahead of the competition.
BP: What round is this? JW: This is a seed round. Our goal is to raise up to $5 million in non-dilutive capital over the next 12 to 18 months.
BP: What is your planned use of funds? JW: We’ve proven the tech in research, and now it’s time to develop the platform that will scale. We’ve allocated 50% of the raise to platform development. This also includes supporting our channel partners. Then, 20% will go to talent and operations; 15% to quality and regulatory, which includes finalizing our regulatory plans for our first indication and reimbursement strategy; and another 15% to marketing and other expenses.
BP: This is a platform technology. What other applications do you foresee? JW: There are a number of uses beyond cancer for our MasSpec pen system: agriculture, food authentication, forensics, clinical toxicology, and manufacturing QA/QC are just a few. The platform applies to industries needing rapid identification of a substance at the molecular level to inform real-time decision making.
BP: Give me three reasons why VisionTech Angels members should invest. JW: First, this is a disruptive technology change for surgical oncology that will solve a large problem in healthcare: reducing cancer recurrence with in vivo tissue diagnostic and thus improve patient outcomes. Second, we have a path to market that is non-regulatory, selling the technology for research purposes. Finally, MS Pen has an outstanding leadership team and board that knows how to bring technology to market. This includes known innovation and commercialization-minded physicians and PhDs. I point to my co-founder, creator of our platform and now CTO of MS Pen, Livia Eberlin, a MacArthur fellow, Genius grant recipient and Forbes 30 under 30 in Medicine; and to board member Thomas Milner, a prolific innovator who has founded two medtech companies and licensed technology to six others.
BP: Looking forward to your pitch on Wednesday, September 6!
VisionTech Angels’ Pitch Events will be held Wednesday, September 6. The Noon Session is virtual. The Evening Session at 5:30 pm ET is your choice of in-person with dinner at KSM at 800 E 96th St #500, Indianapolis, or virtual, which starts at 6 pm ET. Pitch events are open to our members and accredited investors interested in joining our group. To register, check your email for an invitation, go to our Events page where you’ll find the RSVP links. You can also email Ben Pidgeon at bpidgeon@visiontech-partners.com.
One of my kids has had braces so when I met Nick Wangler, president and co-founder of Details, I immediately appreciated the value proposition of his startup. What he and co-founder Dr. Jeff Biggs have created is an online marketplace that connects orthodontic practices with all the suppliers they rely on to run their practices. What’s cool is they can continue to buy from the same suppliers they always have. The only difference is they’re all in one place. Huge time and money saver. I liked Details’ product-market fit and their early traction, so I invited Nick to a VisionTech Angels Screening Committee. The group was impressed with the company’s vision to build B2B marketplaces in healthcare verticals and invited him to present at our September 6 pitch events. Here’s a preview.
BP: How did you find out about VisionTech Angels? NW: I worked at DeveloperTown for four years coaching and consulting with startups so naturally had heard of VisionTech Angels. When we started fundraising, there was one day in particular when four different investors told me, “This would be perfect for VisionTech,” so here we are!
BP: How did you get involved with Orthodontic Details? NW: It’s kind of a funny story. DeveloperTown’s bread and butter is software consulting and development, in addition to supporting startups. One day Dr. Jeff Biggs, an Indianapolis orthodontist who’s probably put braces on some of your kids, showed up and said he wanted us to “Build the Amazon of Orthodontics.” Now that’s a complicated request, but he was serious about it. So we gave him some homework to do, and he did the same with us. As we got to know Jeff, we saw his brilliance, willingness to learn and his humility, and agreed to build something together.
The deeper I got into Jeff’s project, the more interested I became interested in co-founding the company with him. His expertise is orthodontics and mine is business and helping people launch companies. Startups aren’t easy, but it was very clear Jeff was someone I wanted to climb the mountain with. I got permission from my partners at DeveloperTown, who also invested in Details, to leave and co-found the company.
BP: Explain the market need. NW: The pain point for orthodontic practices is clear: clinical staff are pulled away from revenue-generating activities such as starting new patients to order supplies. Keeping the practice stocked with all of the supplies they need to treat patients and run a business is complicated and time consuming. A practice is typically dealing with 15-plus different companies for products they use on a daily basis. Some of these companies have ecommerce sites, but many do not, requiring practices to call a salesperson to place orders. There is a tremendous amount of time spent ordering, following up and managing the financial side. Old school all the way.
BP: What’s the market size? NW: We’re tackling a series of healthcare verticals, starting with orthodontics, where $1.2 billion is spent on supplies each year.
BP: What’s your solution? NW: We have literally done what Jeff set out to do: create an Amazon-like platform for orthodontics practices. With Details, they can order all of their supplies in one place, without changing suppliers. Details also gives them access to their shopping list, order status, practice order history, and ways to find savings. All of the headaches and massive amount of time associated with managing multiple suppliers is gone simply by paying a monthly SaaS membership fee to Details, while unlocking a clinical staff member to spend time on revenue generating activities, like starting new patients
BP: Where are you in terms of scaling the company? NW: We’ve grown from three practices piloting a spreadsheet version of our product to more than 100 practices paying to use our custom-built platform within 18 months. As you can imagine, this has brought attention from the supply side of the business, where we recently announced partnerships with key suppliers like 3M, G&H, Dynaflex, and more. Customer usage is off the charts, with more orders come through in June 2023 than all of Q4 of 2022 combined.
BP: What kind of response have you gotten from customers? Is this influencing other practices to jump on board? NW: Oh my gosh! The response we’re getting from practices is what fuels my excitement for Details. Soon after we launched our MVP platform, something we never imagined started to happen. Practices were sending us hand-written notes and texting us, thanking us for saving them time, money, and the stress of ordering from and managing multiple vendors. Many said we’d given them their lives back. One orthodontist wrote and said his practice manager would probably quit if he took Details away from her.
Testimonials are key in health care. Like other industries, few want to be first. But when they see what’s working for others in their peer group or industry, they want in. Referrals are also important, and our investors, many of whom are orthodontists, help with that.
BP: Do you have intellectual property protection? NW: What we’re doing behind the scenes is patentable, which is a process we’ve started and anticipate wrapping up this year.
BP: What is your revenue model? NW: We’re primarily SaaS, with practices paying a monthly fee to use the platform. The time and supply spend savings practices are seeing allows our service to literally pay for itself. We add additional value by onboarding the practices, so they know how to use the platform and by identifying savings on the supplies they order. We’ve identified additional revenue streams we’ll be revealing soon as well.
BP: Is this platform transferable to other industries? NW: Absolutely. That said, we are focusing our energy on the orthodontics vertical to truly delight our customers, secure market share, and do any fine tuning to our platform and business model we think is beneficial. An example of this is our use of AI to reduce time to value. With a solid beachhead in orthodontics, there are multiple overlooked healthcare verticals that we can enter and scale pretty easily. These are endodontics which has a $1.4 billion annual supply spent, veterinary medicine with a $2 billion annual supply spend, and the big one, dermatology, with a $5.5 billion supply spend.
BP: What round is this? NW: This is a seed round, and our goal is to raise $1 million.
BP: What is your planned use of funds? NW: We currently have more than 1o0 practices on our platform. Now that we’ve proven our platform for customers as well as suppliers, and proven our sales approach, it’s time to scale. This is primarily growth capital and we’re looking forward to pouring gas on the fire.
BP: Give me three reasons why VisionTech Angels members should invest. NW: I’ve got four. First, we’ve learned how to convert leads to sales and are now closing more than 60% of those leads. Second, our customer retention rate is greater than 96%—we’re very sticky. Third, many of our early investors are orthodontists, consultants , and industry partners, who are a main source of lead generation. Finally, we’ve built a team hungry for success.
BP: Sounds good! Looking forward to your pitch on Wednesday, September 6.
VisionTech Angels’ Pitch Events will be held Wednesday, September 6. The Noon Session is virtual. The Evening Session at 5:30 pm ET is your choice of in-person with dinner at KSM at 800 E 96th St #500, Indianapolis, or virtual. Pitch events are open to our members and accredited investors interested in joining our group. To register, check your email for an invitation, go to our Events page where you’ll find the RSVP links. You can also email Ben Pidgeon at bpidgeon@visiontech-partners.com.
Female founders reading a TechCrunch report in mid-July found little to smile about. The media outlet reported that startups with all female-led founders are struggling to raise capital in 2023, having picked up just $1.4 billion – 1.6% of allocated capital – in the first half of 2023. During the same period of 2022, all female-founded startups raised $3.1 billion, a drop of $1.7 billion in a year’s time.
What gives? Part of it can be attributed to an overall slow-down in the venture market due to jitters in the economy. According to Pitchbook during bear markets, investments in women-led companies drops as fund managers seek “safe” investments, preferring male-led to female led startups.
Apparently, VisionTech Angels investors didn’t read the TechCrunch report as 45 wrote checks totaling $338,000 in two female-led startups, Pelvital led by CEO Lydia Zeller, and Amplified Sciences led by CEO Diana Caldwell. Pelvital raised $173,000 and Amplified Sciences $165,000 with VisionTech in seed rounds.
VisionTech Angels has invested in four startups this year, three of which are led by women (Karen Wurster, CEO of Adipo Therapeutics, is the third). Executive Direct Ben Pidgeon is not surprised by his group bucking the trend and betting on female founders in 2023.
“In each case, we have strong, proven, trailblazing female leaders in Lydia, Diana, and Karen with potentially transformative solutions in the life sciences market. They may be breaking barriers, but our members saw solid opportunities that are rewriting the code of innovation and invested in these companies and their leadership.”
Zeller, whose company Pelvital is commercializing a clinically proven medical device called Flyte that helps solve the embarrassing problem of female urinary incontinence, admits that female-led startups face unique challenges, some of it self-inflicted. Women tend to undervalue the perspective and expertise they bring to the table and struggle with pre-conceptions of what an entrepreneur looks like. She believes women need to flip the table on this thinking.
“Our varied responsibilities across work and non-work domains help women leaders by necessity become adept at synthesizing nuanced information from multiple inputs and distilling it into key actionable insights. I rarely encounter a woman CEO who is hampered by overly linear thinking. They are open minded, curious, skilled at evaluating and mitigating risk, and unafraid to seek the diversity of perspectives that strengthens any decision-making process. A woman who has founded a company or risen to leadership has already overcome odds and is likely to have the passion, curiosity, drive, outside-of-the-box thinking, tenacity and grit that are key to startup success,” she says.
Caldwell is no stranger to startups. She is the founder of Pearl Pathways, a life sciences consulting firm she led as CEO for nine years. Caldwell also has served as an entrepreneur in residence at the Purdue Research Foundation and on the boards of startups. Having advised hundreds of life sciences entrepreneurs, it comes as no surprise that she would join a well-respected Purdue researcher, V. Jo Davison, PhD, in co-founding Amplified Sciences. Based in West Lafayette, Amplified Sciences is a clinical stage diagnostics company focused on accurately detecting and preempting the risks of debilitating diseases.
Having a male co-founder is proven to increase the odds of a female founder attracting capital. In 2022, startups with male and female co-founders secured 16.5% of venture capital compared to 1.9% women-only founders pulled in. Says Caldwell, “Clearly, there are more challenges in fundraising for female startups. There have even been well documented studies demonstrating that investors ask different kinds of questions of females when pitching. Specifically, men get asked questions about the potential for gains while women get asked about the potential for losses. “
Caldwell, like Zeller, has not let these biases stop her or other female founders who are her colleagues. “I know many life sciences female founders who are rockstar builders of teams, incredibly creative when solving problems, know how to surround themselves with diverse teams AND listen to them, and are always planning ahead for plan b and c. And when it comes to capital raises, perhaps we are more familiar with how much one can raise with ‘bake sales’ and therefore get really creative when fundraising,” she says.
Case in point, in early July, Amplified Sciences pursued and was awarded a SBIR grant worth approximately $400,000 to develop a test to determine if pancreatic cysts are benign or potentially malignant. Says Caldwell, “I’m extremely proud of our team for earning the SBIR award. This grant provides important non-dilutive funding that will help us achieve a number of milestones and help fund partnership with clinicians to access critical clinical samples.”
As for Zeller, Pelvital closed its seed round in July having raised $2.68 million. Boomerang Ventures led the round with participation from VisionTech Angels, Wisconsin Investment Partners, and Edward Bergmark, founder and former CEO of Optum. The infusion of capital was well timed. The company is preparing for the release of its next generation Flyte device in October that delivers an enhanced user experience and adds significant capabilities for clinical partners.
“With our recent funding round, we expanded our commercial team, bringing in three leaders with outstanding experience across the clinical and payor ecosystem and are dedicated to improving women’s health. Our team is energized and keenly focused on expanding access to Flyte’s novel technology through contracts with health systems, payors, and virtual healthcare providers. It’s going to be an exciting and pivotal year for Flyte,” Zeller says.
Pidgeon loves the energy VisionTech Angels’ women-led startups bring to the group’s investment portfolio. “We recognize that traditionally angel investing has been the realm of men. VisionTech Angels, however, has a history of investing in highly capable and high-performing female founders and CEOs—Shaily Baranwall of Elevate K12, Lindsay Watson of Augment Therapy and Haley Marie Keith of MITO Materials—to name a few.”
He adds, “We’re excited to add Lydia, Diana, and Karen Wurster to our portfolio in 2023. It may be a down year elsewhere for investing in female-led startups, but that’s definitely not the case with VisionTech Angels.”
If you are the founder or CEO of an early growth startup company, we invite you to learn more about VisionTech Angels and our investing process here. We welcome all comers! If you are an accredited investor who’d like to join a collegial, inclusive and active angel investing network, invest with us! Learn more about VisionTech Angels here.
While VisionTech Angels invests in companies from across the United States, we have a sweet spot for Indiana startups. So I was excited when Shane Bivens and Stuart Lowry of ArcticRx reached out to me about pitching to our investors. They had just won the 2023 Innovative Small Business of the Year Award from the Indiana Small Business Development Center and Indiana Economic Development Corporation (IEDC) for their ultra-low temperature transport technology. That definitely got my attention. When they shared details on market trends and unmet needs along with ArcticRx’s product-market fit and traction to date, I invited Shane and Stuart to meet with our Screening Committee. The group was impressed and invited them to present at our June 22nd pitch events. Here’s a preview.
BP: How did you find out about VisionTech Angels? SB: When we started fundraising, we talked to a lot of people and your name kept coming up. “Talk to Ben” is something we heard a lot. When the stars aligned, we reached out to you and VisionTech Angels.
BP: Tell me a little about yourselves and your background as entrepreneurs/startups. SB: I got my start in college when someone said, “You look like a guy who could build a website.” So I did. Since then, I’ve been involved in a number of startups and helped organizations scale.
SL: I am a not-for-profit Thoroughbred. I’ve spent nearly all of my career working with non-profits and government agencies, including IEDC, Heartland Film and the Indianapolis Parks Department. I met Shane while working on a food equity concept and we just clicked. I’m a left brain-right brain kind of person and co-founding a disruptive startup like ArcticRx that can do so much good in the world made sense for me.
BP: What’s the backstory on ArcticRx? You launched in 2020 while we were in the throes of the pandemic. Are the two related? SB: Stuart and I were originally focused on another startup product called ChefsFridge we launched in 2019. We were working on our technology, had investors and then COVID hit. There was an immediate need in the pharmaceutical industry for thermal shippers that could keep coronavirus vaccines at a very specific cold temperature from the date shipped until they reached the final destination. So we pivoted to what is now ArcticRx. There was such an urgency for a solution due to the lack of good cold chain shipping options within the United States and across the world. This urgency caused companies to be more open to change, thus we found the perfect moment to bring ArcticRx to market.
SL: You probably saw the headlines where hospital freezers were breaking, and they were scrambling to give the vaccines before they spoiled. In all of this insanity, Shane and I saw an opportunity to pivot to a new shipping container that could be used as both a shipping and storage container for highly temperature sensitive pharmaceuticals. It would help pharmaceutical companies and governments solve huge, costly issues domestically and create new health equity opportunities in other countries across the global, with a special focus on Africa.
BP: You’ve created what you call “The World’s first Engineered Reusable Non-electrified 21-day ULT Transport and Storage Pod.” Explain. SB: First, I’d like to mention the annual growth rate of cold-chain dependent pharmaceuticals is twice that of shelf-stable medications. So it’s a significant market opportunity. But the other side of the equation is current options don’t cut it in terms of performance, energy use and sustainability.
Our shippers are rugged and capable of protecting temperature-sensitive products for more than 21 days of shipping and storage without a battery or other external energy source. They are made with a durable plastic shell, are Styrofoam free, reusable, stackable for ease of shipping, and lightweight. They can be moved by hand if needed. And we’ve created our technology by tapping into the wealth of expertise found right here in Indiana such as thermal engineering, aerospace and the defense industry, and smart manufacturing.
BP: What role does sustainability play? SL: This is definitely a key driver of our strategy. People hate Styrofoam because it’s not recyclable and yet it’s used everywhere to ship products requiring refrigeration. Based on our meta-analysis, a massive number of current thermal shippers will be regulated out of the market in the next five years because of Styrofoam and other sustainability goals.
SB: Sustainability is integral to ArcticRx. Many cold chain shipping containers are single-use disposables with a large carbon footprint. There’s a lot of waste and expense in shipping containers and frankly people are tired of it. Our products are specifically designed for reusability and for multi-year use. Ideally, they’d be used for two-way shipping. We envision they will be sent to one destination with one product and returned with another. Another plus is our containers do not require a battery or other energy source nor do they need to be transported in refrigerated trucks, saving fuel and lowering carbon footprints.
BP: How is your solution different from others on the market? SB: We like to say our shippers are not an evolution of current technology, but a revolution because we are redefining the category. They’re sustainable, reusable, more affordable than current options, and lastly, stay fully refrigerated for 21 days without a power source.
SL: There is nothing else like it on the market in the passive transport space.
BP: Is it transferable to other industries besides pharmaceuticals? SB: We’re focused on pharmaceuticals which require cold storage now, but definitely the technology can be leveraged across health care for transporting a wide range of products such as blood bags or organs for transplant. ArcticRx will be ideal for relief efforts, war fighter support, medical supplies, and perishable foods.
BP: What kind of intellectual property protection do you have? SL:We have a patent attorney and have completed our freedom to operate analysis and have the green light to apply for patents. Our patent searches showed that we’re free and clear. In fact, our attorney says we’re in rare air as we don’t have any redesign or rework changes.
BP: Where are you in terms of commercialization? SB: We have been very mindful in our development as a company. Since October 2020, we’ve had three distinct phases: engineering, prototyping and contract manufacturer identification, and now sales and marketing. All of our prototypes have been built, tested, and proven so now we’re in the market and having client discovery conversations. We have a number of proposals with defense contacts, global companies and contacts in key African countries. We’ll get into more specifics during our pitch.
SL: It’s a really exciting time! When we get on calls with people—and that includes Indiana companies, other U.S. companies, hospitals, global departments of defense, UNICEF, and many foreign entities—there’s a lot of excitement about what we’re doing. The lead procurement director at UNICEF and others in our conversations have said, “Wow! You’re going to change the world.” They see the possibilities.
BP: What is your revenue model? SB: Our plan is to do long-term leasing to logistics companies with terms of one, three and five years. It’s a common approach in logistics where companies maintain “pools” of reusable packaging that are then leased to companies shipping various products. We will also work with companies on custom applications where we are the “white glove service” for their product packaging and delivery.
BP: What round is this? SB: This is our seed round and our goal is to raise at least $800,000.
BP: What is your planned use of funds? SL: It’s pretty straight forward. We want to quicken our speed to market and that means hiring key people, field testing with potential customers who are anxious to get started, and finally having the capital for manufacturing and warehousing expenses. Right now it’s only Shane and I—which has been great by the way—but we’re at the point where it’s time to move faster and prepare to scale. We’re excited about the field trials and seeing how our products perform with the customers’ products and in their supply chains.
BP: Give me three reasons why VisionTech Angels members should invest. SL: First, we’ve taken the best of Indiana—its manufacturing resources, tech talent, and pharmaceutical companies that will benefit from our products—and created a company that’s ready to take off in a high-end market. We have multiple runways for diversification. Second, we’re a very collaborative company. We always give before we get. Third, we have strong connections within global defense departments and have done technology demonstrations with several military branches that can benefit from our technology. Our first hires will be military veterans. We’re one of the only companies in the state that is part of the U.S. Department of Defense SkillBridge Program that incentivizes veteran hires.
SB: I’ve got another reason.
BP: Sure! SB: We have Indiana’s superpower in spades. We get things done!
BP: Thanks guys! Looking forward to your pitch on June 22.
VisionTech Angels’ Pitch Events will be virtual on Thursday, June 22 at Noon and live at 6 p.m. ET at KSM at 800 E 96th St #500, Indianapolis. Pitch events are open to our members and accredited investors interested in joining our group. To register, check your email for an invitation, go to our Events page where you’ll find the RSVP links, or email Ben Pidgeon at bpidgeon@visiontech-partners.com.
I’ve known Wade Lange for many years, mainly through his past role as vice president and chief entrepreneurial officer at the Purdue Research Foundation. Like me, Wade grew up in West Lafayette and went to Purdue. He went off to a career at Lilly and later with a series of biotech startups before landing at Purdue. He is now the co-founder of FiberX with Dave Skibinski, an Indiana University grad and former team manager for famed IU coach Bobby Knight. I’m sure Dave’s got some stories! The two serial entrepreneurs have teamed up with FiberX, which is converting the familiar ag waste product, corn stover, into bio-based industrial products that are sustainable alternatives to petroleum-based products. I invited Dave and Wade to meet with the VisionTech Angels Screening Committee in May. The group was impressed with FiberX,its novel approach to the need for sustainable biopolymers and invited them to present at our June 22nd virtual pitch events. Here’s a preview.
(L to R) Wade Lange, Dave Skibinski, Ben Pidgeon
BP: How do you know VisionTech Angels? WL: I go way back with VisionTech, maybe even before you were Stepstone Partners because of my relationship with Oscar Moralez. We were both involved in biotech companies and with Purdue, so our paths crossed often. When you joined VisionTech, I leaned on you to come speak to faculty and student entrepreneurs at the Purdue Research Foundation
BP: How do you two guys, graduates of huge rivals, IU and Purdue, know each other? DS: I wish I could say we met at a basketball game in Bloomington, but that’s not the case! The real story is Wade tried to recruit me to Purdue in 2021 when he was the chief entrepreneur officer at the Purdue Research Foundation. He thought I would make a great entrepreneur-in-residence based on my background in medical technology and with a startup I’d co-founded called SnapMD, which was at the forefront of telemedicine. We exited in early 2021 and I needed a new challenge. While I turned Wade down on the residency, we ended up launching a new venture together, FiberX.
BP: How’d you pull that off, Wade? WL: Working at Purdue I was exposed to some incredible faculty and their technologies. One of them was Jim Caruthers, a chemical engineering professor who has dedicated his career to polymer science. He’d developed technology to convert biomass such as corn stover into “green” adhesives for engineered wood products. When Dave mentioned he wanted to start another company, I introduced him to Jim. Dave saw the potential immediately. After much discussion, we decided to co-found FiberX. Dave is the CEO focused on building the business and our core capabilities angle, while I’m chief commercial officer and boots on the ground here in Indiana.
BP: What exactly is corn stover? DS: I can’t believe you’re from Indiana and don’t know what corn stover is, Ben! Corn stover is the stalks, husks, leaves, and cobs that remain after field corn is harvested. While some is used to feed livestock and as bedding, the bulk of it is not commercially used. In many cases, farmers leave it in the field to degrade to help control soil erosion and to return nutrients such as nitrogen, potassium and phosphorus to the soil when they plow the stover back into the soil. Corn stover is the world’s and Indiana’s largest agricultural waste product.
BP: What unmet need are you solving? WL: We’re solving problems on both sides of the coin. Farmers have taken a beating these last few years. Their input costs are up, commodity pricing for corn is down, and they’re always battling Mother Nature for a good crop. Corn stover is FiberX’s raw material. By purchasing this byproduct following the corn harvest, we’re creating a new revenue stream for farmers. Talking with many Indiana farmers, we know that they are open to selling stover if the economics work out because their high corn yields are producing tremendous amounts of stover.
The other side of the coin are the industrial markets that are interested in replacing petroleum-based adhesives and plastics with environmentally friendly biomaterials that have the same if not better performance characteristics. We’re bioindustrial resins and biocomposite plastics with sustainable corn stover as a feedstock rather than petroleum. With our resins, we’re also eliminating the use of formaldehyde as a curing agent. Although widely used in the production of plywood, other manufactured board and resins as well as cosmetics and medicines, formaldehyde is highly toxic, flammable at room temperature, and can be a cause of lung disease and cancer. So for manufacturers, eliminating the need for formaldehyde removes a potential safety and health hazard.
BP: The push to replace petrochemical-based adhesives and plastics is a global movement. What is your initial target? DS: It absolutely is. Global companies that use plastics in their products or packaging have clear, and in many cases, aggressive sustainability goals regarding plastics. This includes recycling, reusing, reducing the amount of plastic used, reducing the amount of petroleum used to manufacture those products, and ultimately replacing plastics with renewable biomaterials. The demand for alternatives is there. However, the biomaterials market is in its infancy. There are products on the market and in aggressive testing with corporate partners.
We have three different product categories we’re focused on, with increasing product value. First up and the fastest route to market entry is processed corn stover, which is added to synthetic or natural plastics to create biocomposite plastics. Next are intermediate products, lignin and cellulose, which are used as sustainable ingredients if you will for many products, including packaging. Finally, we have our proprietary formulations, the adhesive resins for composite wood products that include flooring, furniture, sheathing, and cabinets that are made from composite and engineered wood products rather than solid wood. For example, La-Z-Boy upholstered furniture is made with composite woods as is much of the furniture from IKEA and Target for example.
BP: How is your material different from other biopolymers already on the market? WL: The big difference is our raw material, corn stover. It’s plentiful and an agricultural waste product versus corn, soybeans, and wood pulp that are also used in biopolymers, but are all primary market products. Currently, there’s only one marketed non-petroleum adhesive resin. It does not meet customer requirements and it’s really expensive. We want to step up quickly with a sustainable resin that works.
BP: What is your total addressable market? DS: The total addressable market for green chemicals and materials globally is projected to reach $229 billion by 2030. The global market for our initial products, adhesive resins, is $8 billion.
BP: What kind of intellectual property protection do you have? WL: We have an exclusive option from Purdue to license five pieces of intellectual property that cover the manufacturing processes for the adhesive resin. Our plan is to exercise the options in thesecond half of this year. We will also have numerous trade secrets as every product formulation we create will be unique to its target use case.
BO: Where are you in terms of commercialization? WL: From the supply side, we’re building relationships with farmers and agronomists and also working with farmer-owned cooperatives in the Midwest to build the raw material supply chain. Some are ready to start right away, and others want to wait and see, which is common regardless of the industry.
DS: We’ve achieved our proof of concepts on our stover processing and have produced product prototypes. We are in discussions with several of the largest lumber and engineered wood companies in North America that are looking for sustainable resins and materials that won’t compromise performance but will help meet sustainability objectives. We have a terrific project with Purdue this summer with our resin, and the early results are very exciting. We have also completed our proof-of-concepts for our biocomposite plastic product line. We are now conducting iterative product development to refine these product formulations. Our goal with these biocomposite plastics is to replace 40% of petrochemical-based plastics. This is a win for global companies as it reduces their reliance on traditional plastics and helps them reach their sustainability goals.
BP: What round is this? DS: This is a $500,000 pre-seed round.
BP: What is your planned use of funds? DS: The primary uses are to build and refine our stover processing and supply chain, produce sample resin and boards to take to the engineered wood industry, and finally, produce samples of biocomposite plastics to take out to a variety of industries committed to reducing their use of traditional plastics.
BP: Give me three reasons why VisionTech Angels members should invest. WL: FiberX is creating an entirely new industry for Indiana and has a huge market opportunity with a short-term path to revenue. Second, we’re leveraging Indiana’s strengths in agriculture and manufacturing. Finally, we have an exceptionally strong team including two serial entrepreneurs with experience and multiple exits in hard tech, our CTO Tom Santelli who has led technology and product development at the largest board manufacturers, a multi-generational Indiana farming family, and a tremendous team at the Purdue School of Chemical Engineering
DS: Plus, we’re leveraging the industrial manufacturing and rural farming assets of Indiana. And there’s the whole IU-Purdue thing. Something for everyone who likes to support Indiana companies.
BP: Thanks guys! This sounds like a great pitch and opportunity.
VisionTech Angels’ Pitch Events will be virtual on Thursday, June 22 at Noon and live at 6 p.m. ET at KSM at 800 E 96th St #500, Indianapolis. Pitch events are open to our members and accredited investors interested in joining our group. To register, check your email for an invitation, go to our Events page where you’ll find the RSVP links, or email Ben Pidgeon at bpidgeon@visiontech-partners.com.
Tucson, Arizona-based clinical stage biotechnology company developing a first-in-class therapeutic that uses oxygen to amplify treatment of life-threatening diseases.
VisionTech Angels, among the Midwest’s most active angel investing networks, has invested $196,500 in NuvOx Therapeutics Inc. (NuvOx), with 27 individual members participating in a bridge round following a $10.4 million Series A. NuvOx has also succeeded in attracting $14 million in non-dilutive funding from the National Institutes of Health, Department of Defense and other government funders. NuvOx is VisionTech Angels’ 65th portfolio company.
Headquartered in Tucson, Arizona, NuvOx is a clinical stage biotechnology company developing a first-in-class oxygen therapeutic to treat life-threatening diseases where hypoxia, a condition in which there is a decrease in the oxygen supply to a tissue, plays a role. The company’s lead drug candidate, NanO2TM , represents a disruptive platform technology addressing multiple high unmet needs, and demonstrates great progress in improving the flow of oxygen from lungs to blood and from blood to tissue, which can amplify the effectiveness of treatment. Over 30 animal studies have shown therapeutic effect in seven different indications. Positive clinical efficacy is demonstrated in two completed Phase Ib/IIa studies: glioblastoma multiforme (brain cancer) as a radiosensitizer and stroke as a neuroprotectant. NuvOx has commenced its Phase IIb glioblastoma multiforme trial in United States and is preparing for two additional clinical trials in late 2023.
VisionTech Angels’ Executive Director Ben Pidgeon says the groups investors are impressed by NuvOx’s potential as well as the track record of company co-founder and CEO, Evan Unger, MD. “Investing in biotech companies is a long game for investors because of time needed for development and clearing regulatory hurdles. NuvOx is well-positioned. They are addressing a massive market with an unmet need with a drug that has been substantially de-risked, has strong patent protection and a clear pathway to commercialization.”
Adds Pidgeon, “We also have great confidence in Dr. Unger, his leadership team and advisory board. He has an impressive background in the startup world and in medicine. He’s founded four biotech companies, successfully exiting two. His first company, ImaRx Pharmaceutical, developed three FDA-approved drugs and was acquired by DuPont, yielding a 20X return on investment. His second company, ImaRx Therapeutics, went public, and NuvOx, shows great promise. Dr. Unger is an inventor on more than 120 U.S. patents, a board-certified radiologist and Professor Emeritus of Medical Imaging at the University of Arizona.”
About VisionTech Founded in 2009, VisionTech is a privately held company that links investors to high-potential, early-growth companies. Based in Indianapolis, VisionTech’s angel investing network includes more than 130 active members across Indiana and Ohio. As of November 2022, 175 VisionTech member investors have deployed more than $24.8 million in capital, investing in 65 portfolio companies from across the United States. Membership is open to accredited investors. Those interested in joining are encouraged to contact VisionTech.
About NuvOx Pharma, Inc. NuvOx is a privately held Phase IIb company developing a novel oxygen therapeutic where hypoxia plays a role. Hypoxia, or low oxygen, is responsible for resistance to cancer treatment, brain damage in stroke, and the death of COVID-19 patients with acute respiratory distress syndrome (ARDS). The Company’s lead drug, NanO2TM, represents a disruptive platform technology addressing multiple highly unmet needs, with positive clinical efficacy demonstrated in two completed Phase Ib/IIa studies: glioblastoma multiforme as a radiosensitizer and stroke as a neuroprotectant. It was shown to be the most effective oxygen therapeutic among 74 clinical-stage compounds. It has safety and efficacy data in more than seven indications in various clinical stages, including Orphan Drug Designation for both glioblastoma multiforme and sickle cell disease. The product was derived from Dr. Evan Unger’s pioneering work in microbubbles, which was commercialized as the number one selling contract agent. As such, it has safety data in more than 2,000 subjects. The product is designed to be synergistic, rather than competitive with, standard of care. For additional information, visit website.
I met Paul Couston through Jonathan Ellis of Sandalphan Capital who had nothing but praise for the CEO and co-founder of Ascent Integrated Tech. Just two years out of the University of Illinois Urbana-Champaign, he’s already a seasoned CEO with two startups under his belt and an alumna of Techstars Chicago (2018). Paul and his co-founder, Alex Gorsuch, are tackling a hot industry, firefighting, with a platform tech solution that gives commanders more oversight and control over firefights as well as the health and safety of firefighters. The VisionTech Screening Committee and I invited Paul to present at our April 27 virtual pitch events. Here’s a preview of Ascent’s technology, progress to date and details on the round.
BP: Tell me a little about yourself. Is this your first startup? PC: No. I actually started my first venture, Optivolt Labs, while at the University of Illinois. Optivolt builds micro-solar technology that allows for self-charging phone cases, e-scooters, sensors, satellites, and commercial drones. I took some time off from school to participate with Optivolt in Techstars Chicago in 2018. This led to us making incredible contacts in Chicago’s venture ecosystem, raising millions in venture capital, employing a full team of engineers in Silicon Valley, and building deployable solar generators for the U.S. Air Force and the 21st Space Wing. I stepped back from Optivolt in 2020 and returned to the University of Illinois to finish my degree. I’m a shareholder in Optivolt and they’re doing well.
BP: What’s the backstory on Ascent Integrated Technology? What “sparked” your interest in firefighting? How did you connect with your co-founder? PC: Alex and I met while serving as mentors with the University of Illinois I-Venture Accelerator for students. We both had previous startups, were both looking for our next company, and knowing this, people said, “You need to meet the Viking.” The Viking being Alex, who has a commanding presence, an impressive beard, makes mead, and is a fearless entrepreneur. We met and had a lot in common based on experiences with our past startups.
Unlike other founders who have direct experience in their industry, neither Alex nor I have a background in firefighting. We kind of stumbled into the fire service and the fire service accepted us with open arms. What’s interesting is firefighting is steeped in tradition and reliant on knowledge gained across decades yet is still very open to new technology. The number one objective is to keep the team safe and pass down their knowledge. Going in, we quickly realized our mission was not to fundamentally change firefighting. Instead, we are augmenting traditions, processes, and knowledge with technology that enables optimal management of fire events and the health and safety of firefighting teams.
BP: What are the unmet needs in firefighting? How did you validate product-market fit? PC: Firefighting for the most part has been very traditional and reactive to what firefighters find on the ground at a fire. For example, when firefighters arrive on scene, they conduct a 360-degree assessment on foot around the fire’s perimeter. So valuable time is lost between dispatch and arrival. Incident commanders typically set up a large whiteboard on site at the fire and manually track people and resources. While this may work on smaller fire events, it’s impractical for large industrial or disaster events when multiple fire companies and hundreds of firefighters and other responders are involved. There’s also a wealth of past history battling all kinds of fires. We wanted to determine the best way to tap into this knowledge so it can be leveraged in the future on our platform.
In 2022, we conducted exhaustive customer discovery interviews with some 1,900 fire departments from across the United States. Our goal was to collect operational insights, pain points, current tactics and processes, and get reactions to the solution we envisioned. Common feedback we got was how revolutionary it would be to have the ability to monitor firefighters’ locations in real time – before, during and after a fire event. There was tremendous excitement among those we talked to. The insights we gained have been critical to product development. We continue to work with a number of highly engaged fire stations around the country to fine tune our solution.
BP: Explain briefly how your solution works. Ascent is a unifying platform for incident command that allows the commander to better plan and manage tasks, monitor the health and location of firefighters, and capture data about each fire event to support future firefighter training and response. The core goal is to allow for localization of firefighters to help achieve safe, positive outcomes.
When a fire alarm goes off and the incident command has the address of the fire, our platform has a web-scraping tool that pulls data from Zillow, Redfin, Apartments.com, Google Street View, and other sites to get approximate floor plans and even construction materials so they have a good assessment of what to expect and can start pre-planning. Once onsite, the firefighters wear an Ascent module on their helmets and an Ascent wristband health monitor. The helmet module enables incident commanders to confirm a structure’s floor plan, monitor movements and other data points of firefighters in real time. It’s extremely accurate, determining within three feet of where each firefighter is. The helmet module also allows us to build a heat map and have better insights into how the fire is behaving.
The module and the wristband also give the commander insights into the toxicity of the fire, a firefighter’s movements, heart rate, and other data points that lets them know if individuals are succumbing to heat or smoke inhalation. Firefighters continue to wear the wrist band health monitor post fire to make sure heart rates are returning to normal as heart attacks are the number one cause of firefighting-related deaths. Here’s a video with more detail.
BP: Explain your two customer categories and why each is important. PC: We have two customer categories, civilian and military markets, each with an incredible need for our technology. Civilian firefighters are the municipal services we see in communities across America. The U.S. Department of Defense (DoD), and specifically AFWERX, a program of the U.S. Air Force that fosters innovation, has a lot of funding available to improve firefighting technology. The DoD funds these projects because of the dual use by the military and civilians. The advantage of DoD contracts is the funding is non dilutive plus what we learn and develop is applicable to both markets.
We just got some big news from AFWERX that we have been awarded $2.5 million from U.S. Air Force fire response and are now pursuing a dollar-to-dollar match up to 15 million. We’ve been working on this for 18 months and just got confirmation!
BP: That is great news! Congratulations. PC: Pretty happy about it.
BP: Do you have any competitors? PC: There are definitely others doing software for firefighters, including major manufacturers like Motorola and Scott. Given we’re all trying to replace technology developed during the Vietnam War, there is a lot of room for improvement. At this point, the space if very fragmented and companies are addressing niches within firefighting. Our objective is to be the Google of the firefighting industry with the central operating system for firefighters. With this in mind, the best path forward may include licensing to other companies or partnering with manufacturers on a universal platform.
BP: What is your total addressable market? PC: Being early stage, we are initially focused on U.S. civilian firefighting departments and Air Force firefighters as our beachhead. This on its own is a $557 million market. When fully deployed globally, we’re looking at a $50 billion market. This includes expanding those using our solution beyond firefighters to SWAT teams, special forces, HAZMAT operators, and professions working in confined spaces.
BP: What’s your revenue model? PC: It’s a recurring revenue model with pricing based on a per firefighter basis of $1,000 per year. We are looking at an average contract length of 10 years. So a 50-person department would generate $500,000 in gross revenue over 10 years. The equipment cost is included in year one.
BP: Where are you in terms of commercialization? PC: Last year was focused entirely on customer discovery and product development. We also closed a $1.6 million Pre-Seed Round and secured $700,000 in U.S. Department of Defense contracts. In 2023, our priorities are on piloting the product, continuing to build upon our defense contracts and securing pre-orders among fire departments. So far this year, we’ve booked $2.8 million in defense contracts and have $2.7 million in pre-orders from 24 fire departments in five states.
BP: What kind of intellectual property protection do you have? PC: We have four global patents pending. It’s not about the helmet or the sensors, but how the system acts as a whole that is patentable.
BP: What round is this? PC: Some people call this a bridge round, but we’re calling it our priced financing round. The goal is to quickly raise $1 million. We have about $700,000 in commitments, which leaves about $300,000 for VisionTech and the other angel investors who have expressed interest. The round is going to close by May 19, so we’re moving fast and may oversubscribe slightly.
BP: What is your planned use of funds? PC: Let me tell you what we’re not using these funds for first. We are not using equity dollars to finance the product. Instead, we’re using the funds from this round to hire specific senior level engineers, clean up our cap table, and extend our runway to and prep for our Series A.
BP: Give me three reasons why VisionTech Angels members should invest. PC: First, this really is about the bigger mission of protecting the health and safety of firefighters and becoming the global platform for firefighting technology. Second, we have an unfair advantage in how to secure non-dilutive funding. I don’t know too many startup founders that have $15 million in non-dilutive funding like we have with the STRATFI funding through AFWERX. This is an incredible war chest for R&D and commercialization. Third, Government contracts have a long sales cycle and are very hard to get, but once you have them, they range from three to ten years and are very sticky. It is not fun, but we know how to get them.
VisionTech Angels’ April Pitch Events will be virtual on Thursday, April 27 at Noon and at 6 p.m. ET. Pitch events are open to our members and accredited investors interested in joining our group. To register, check your email for an invitation, go to our Events page where you’ll find the RSVP links, or email Ben Pidgeon at bpidgeon@visiontech-partners.com
I first met Diana Caldwell when she was the co-founder and CEO of Pearl Pathways. Pearl was among VisionTech’s corporate sponsors and an invaluable commercialization resource for our life sciences portfolio companies. It didn’t take long for Diana to become a member of VisionTech Angels, giving us deep bench strength as a subject matter expert in drug development and FDA regulatory paths. When she co-founded a new diagnostics startup with pancreatic cancer as its first target, Amplified Science, I was eager to learn more. Pancreatic cancer is the third most deadly cancer, killing 74 of 100 patients within a year of diagnosis, largely because it is rarely discovered early enough to treat successfully. I invited Diana to meet with the VisionTech Angels Screening Committee earlier this month. The group was impressed with Amplified Sciences, its novel technology, progress to date, and invited her to present at our April 27 virtual pitch events. Here’s a preview.
BP: Tell me a little about yourself. Is this your first startup? DC: This is actually my second startup. I was also a co-founder of Pearl Pathways. After earning an MBA at the IU Kelley School of Business, I joined Lilly where I held commercial and cross functional roles for the next 16 years. Lilly really gave me a broad foundation of experience in leadership and developing teams in the biotech space. Eventually, a desire to be an entrepreneur and get back into product development for unmet clinical needs brought me to the startup space.
BP: What’s the backstory on Amplified Sciences? How did you connect with your co-founder, Dr. V. Jo Davisson? DC: I was working at the Purdue Foundry as an entrepreneur-in-resident, helping a half a dozen startups and shopping for IP for my next startup. While I was there, I met Jo, a Purdue faculty member and biochemist with 30 years of experience in drug and diagnostic discovery and development. He had invented a chemistry reagent platform for the early detection of debilitating diseases, had founded the company, and was looking for a CEO with deep business experience. For the next nine months we had the opportunity to work alongside each other—Purdue has this great knack of pairing entrepreneurs with scientists! In the summer of 2019, I became a co-founder and CEO with Jo as our CSO, and we got to work.
BP: What is your product and how is it different?
DC: Our lead product is a diagnostic reagent for accurately detecting a biomarker that is an indicator of potential malignancy for pancreatic cancer. Amplified Sciences’ chemistry reagent platform is a suite of patented reporter dyes that amplify biomarker signals. What’s novel about our technology is the ability to detect indicators of disease at a much lower concentration – up to 10,000 times improved limits of detection – than comparable technologies. Our ultrasensitive dye probes work particularly well when there is a low abundance of the target biomarker and when there is a low volume sample involved. These features are important when you’re working with low volume samples such as with a cyst or when a disease is in its very early stages.
BP: Let’s discuss your lead assay, PanCystProTM. Why pancreatic cancer? Where are you in its development? DC: We chose pancreatic cancer for our lead assay for several reasons. First, because of the deadly nature of the disease—roughly three out of four patients are dead within a year of diagnosis—and the unmet medical need for early-stage diagnostics to help increase survival rates. Pancreatic cancer is a “silent cancer” in that symptoms don’t show up until late stage if they show up at all. By then it’s too late to treat effectively. Early detection is the only way to significantly change outcomes.
Here’s an example for you. Supreme Court Justice Ruth Bader Ginsburg had colon cancer. It was caught early, and she survived. Later, when she was undergoing a full body scan, an early-stage cyst was found on her pancreas. She was treated with a surgical removal of that cyst, and survived for years. It was only by chance that her pancreatic cancer was found when still treatable.
Why is it so hard to find? For one thing, the pancreas is deep within the body, behind the stomach, so it’s hard to see in imaging. Most of these cysts are found by imaging incidentally meaning they are found in a cat scan or MRI when doctors are looking for something else .
Our PanCystPro™ assays test the fluid from these cysts, which are very small so fluid sample sizes are small. This works in our favor because of the ability of our technology to operate with very small sample volumes. Our initial PanCystPro assay is a minimal sample assay for protease biomarkers and is a “rule out” test to determine if the cyst is benign. At +90% sensitivity and specificity, it is more accurate than competing tests.
We have additional assays in this disease state in development. I’d also like to mention that we were just awarded a Phase 1 SBIR grant of $400,000 from the National Cancer Institute. This will help accelerate development of our second assay for pancreatic cancer. The award validates the huge clinical need for this test.
BP: Where are you in development?
DC: We are making steady progress. The PanCystPro test has been used in clinical samples and is ready for translation to a clinical lab and to enter the regulatory process. Our team, which includes three Ph.D. scientists, is set to expand soon. Research and development on additional assays are underway and this includesactive institutional review board (IRBs) studies with three premier research universities.
BP: What is your total addressable market? DC: The in-vitro diagnostics market is huge, about $88 billion. For initial market entry, we are focusing on the pancreatic cancer diagnostic market, which is $2.2 billion including imaging. Drilling down to our real value proposition, more accurate diagnosis of patients with pancreatic cysts, the market is $300 million with a potential market share of $80 million. Pancreatic cancer in-vitro diagnostics is just the start so keep in mind, this is a platform technology that will be leveraged to other disease states.
BP: What kind of intellectual property protection do you have? DC: We have a suite of global composition of matter patents exclusively licensed from Purdue. We are adding patents on our individual products.
BP: What round is this? DC: This is our Series Seed Preferred Round. We completed a previous Series Seed convertible note round in early 2021, raising $1.78 million. In this round, our goal is to raise $3-3.5 million. We have two co-leads, Elevate Ventures and OCA Ventures, that have done their due diligence. They, alongside two other venture firms, closed $1.5 million in Wave 1 of the open round on March 3, 2023. We’d like to raise another $1.5 to $2 million so there’s still plenty of room for VisionTech Angels.
BP: What is your planned use of funds? DC: The largest portion will be directed to research and development on two additional assays, followed by CLIA regulatory approval, targeted launch with key opinion leaders, clinical utility and trials, sales and marketing, and capital equipment.
BP: Give me three reasons why VisionTech Angels members should invest. DC: First, this is an opportunity to help us build a great diagnostics company focused on earlier, mor accurate detection starting with pancreatic cancer. Second, others believe we are up to the challenge. We already have two respected investors leading the round, Elevate Ventures and OCA Ventures, both of which have invested in diagnostics companies in the past and are familiar with the space. Third, we are a clinical stage company making measurable progress and are planning our commercial launch by end of year. I’m going to sneak in a fourth: we have identified multiple paths to exit and are working hard on the milestones needed for a near term exit.
VisionTech Angels’ April Pitch Events will be virtual on Thursday, April 27 at Noon and at 6 p.m. ET. Pitch events are open to our members and accredited investors interested in joining our group. To register, check your email for an invitation, go to our Events page where you’ll find the RSVP links, or email Ben Pidgeon at bpidgeon@visiontech-partners.com
INDIANAPOLIS, Indiana (April 11, 2023) – – VisionTech Angels, among the Midwest’s most active angel investing networks, has invested $242,000 in Adipo Therapeutics, with 29 individual members participating in the round. With the investment, Adipo has closed its seed round, raising $2.8 million with participation from VisionTech Angels, Purdue Ventures, Elevate Ventures, IU Ventures, Racine Medical Angels, and other angel investors.
Adipo, a pre-clinical stage company seeking to transform treatment of type 2 diabetes and obesity, was founded in 2016 by Meng Deng, Ph.D., an associate professor of Agricultural and Biological Engineering, Biomedical Engineering, and Materials Engineering at Purdue University. Adipo’s breakthrough technology stems from Deng’s strong commitment and interdisciplinary collaboration in the development of biomaterials-based translational technologies for cellular and regenerative engineering. The company is led by CEO Karen Wurster, who spent 25 years with Eli Lilly developing, launching and commercializing blockbuster diabetes treatments prior to joining Adipo in 2020.
Adipo’s novel method of action seeks to fundamentally transform how type 2 diabetes and obesity are managed by changing energy-storing white fat cells into energy-burning brown fat cells. The metamorphosis of adipose tissue through browning has the potential to use the body’s own physiology to increase energy expenditure, reduce adiposity and improve insulin resistance.
Commenting on the announcement, VisionTech Executive Director Ben Pidgeon said the group’s investors were impressed by the enormity of the technology’s human impact and market potential in reversing serious conditions that have reached epidemic proportions in the United States and globally. “By 2025, 37 million American will be diagnosed with type 2 diabetes while 64 percent of the U.S. population will be either overweight or obese. Both conditions often lead to complications that include heart disease, stroke, blindness, and death. Adipo’s goal to use the body’s fat to reverse course and help people live healthier lives would be a tremendous breakthrough.”
He added, “Adipo is initially targeting a segment of the U.S. type 2 diabetes treatment market that involves injections and is estimated at $1.7 billion. The platform technology can potentially be leveraged to treat obesity and other metabolic disorders, significantly increasing market value.”
Adipo is VisionTech Angels’ 63rd portfolio company and the first of 2023. Wurster is pleased with the strong support her company has received from VisionTech and other Indiana-based venture groups, which helps advance a much-needed solution for people living with type 2 diabetes. “I am thrilled to be leading a team to realize the potential of this groundbreaking science to improve the treatment of millions of people suffering with type 2 diabetes and obesity. We are appreciative of the support we have received as an Indiana startup from VisionTech, Elevate Ventures, IU Ventures, and Purdue Foundry and look forward to moving our product to the next phase of development.”
Adipo is using the funds to continue to de-risk their technology, while preparing for a Series A fundraising round that is anticipated to begin later this year.
About VisionTech Founded in 2009, VisionTech is a privately held company that links investors to high-potential, early-growth companies. Based in Indianapolis, VisionTech’s angel investing network includes more than 130 active members across Indiana and Ohio. As of November 2022, 175 VisionTech member investors have deployed more than $24.8 million in capital, investing in 63 portfolio companies from across the United States. Membership is open to accredited investors. Those interested in joining are encouraged to contact VisionTech.
About Adipo Therapeutics Founded in 2016, Adipo Therapeutics LLC, is a privately held biotech company focused on localized conversion of energy-storing white fat to energy-burning brown fat for the treatment of obesity and type 2 diabetes. Adipo’s lead product, ADPO-002-NP, is in pre-clinical development. For additional information, visit our website.
