Last Week in Boston Tech Deals
Boston Tech Companies Raised $28M Last Week
Happy Sunday
I’m taking a class right now called the Psychology of Happiness. The curriculum explores the genetic and environmental influences that correlate with subjective wellbeing (happiness). The leading research out there suggests that 50% of your happiness is genetically pre-determined at birth. Another 10% is dictated by external circumstances out of your control (like being locked inside for several weeks).
However, most of the research shows that about 40% of your wellbeing is determined by the intentional actions you make every day. I wanted to share a couple of actions that have shown a positive correlation to subjective wellbeing in a research setting (and can be done in self-quarantine):
Spending more time with loved ones (Maybe it works over Zoom?)
Mind and body exercises, like yoga and meditation.
Practicing sustained changes to sleep hygiene.
Regularly maintaining a healthy diet.
Expressing gratitude to others.
Someone Start a Boston Bio Deals Newsletter
I know I mostly focus on tech here, but there is an insane amount of life science investment activity happening in Boston right now. In the last week, we’ve seen:
In other words, Boston-area life science companies just raised half a billion dollars in one week and then one life science-focused fund raised enough to invest in all of the deals twice-over. Let’s go!
New Boston Angels Get Their Wings
Last week, a new angel group launched out of Boston and New York. TBD Angels is a group of operators and executives hoping to use their collective expertise and finances to back startups. They’re comprised of over 20 recovering and current founders hoping to share advice, guidance, and capital with entrepreneurs. I think this is a great idea for several reasons, but a big one being that the East Coast traditionally lacks the operator-angel presence that we see out West.
Is this because fewer entrepreneurs on the East Coast have exited and recouped capital to invest? Well, Boston has more $1B+ tech exits than any other ecosystem outside the Bay Area, so it can’t just be that. Is it because Silicon Valley investors use angel investing as a status symbol and New England angels refuse to become registered #FlexOffenders? Maybe. Regardless, I think having more operational know-how committed to the Boston ecosystem is incredibly important, and I’m excited to see the group close some deals. My only suggestion for the team is that they buy the TBD.vc domain name before I do.
Some Interesting Links:
If you’re new to my emails and posts, welcome! My name is Nick Stuart and I write a weekly newsletter on tech VC financing trends in the Boston area. You can learn more about me on my website here and about the micro-VC I help run here.
Onto VC Financing Deals:
Scientific Marketplace Spotlight: Meenta 🧪
Last week, Meenta formally filed a $2.4M funding round with the SEC, with about $1.6M of the offering already sold. I’m excited to write this week’s spotlight because I’m an investor through the student-run fund I manage, and because they’re tackling a remarkable problem in a way that’s easy to understand, yet incredibly difficult to execute on. If you haven’t already heard about Meenta, they’re a Boston-based startup sometimes referred to as the “Airbnb for Genetic Sequencers.” They’ve created a two-sided marketplace that drastically simplifies the process of finding and utilizing high-quality scientific equipment. They match scientists doing research with “hosts” that own expensive lab equipment that isn’t being fully utilized.
Meenta’s plan is to organize the world’s scientific technology to make it cheaper and more accessible to the masses.
Founded in 2016, the Techstar’s 2018 graduate is led by life science veteran Gabor Bethlendy and technologist Stephan Smith. Stephan has been building web, mobile, and systems designs for the last two decades as a full-stack developer at various Boston businesses. Gabor has spent over 20 years working on the business side of life science at Agilent Technologies, Combimatrix, Roche, and as a founder at Parabase Genomics, which exited to Quest Diagnostics in 2017. As Gabor put it in his Techstars pitch, Meenta is simply an “appification” of the struggles he has experienced in the world of science over the last 20 years.
Startups building solutions that make healthcare work faster and better are now more important than ever.
Scientists around the world often need to use expensive lab equipment that isn’t present in their own laboratory. For example, in late December, a group of virologists and scientists observed unexplained pneumonia cases in Wuhan, China. They took secretion samples from presumed patients and conducted a full genome sequence to identify what later became known as the 2019 novel coronavirus, COVID-19. Had they not had a sequencer on hand, that process could have taken days, or even weeks.
“[It] used to take 3 months for you to book time on one of these high-end sequencing machines and have all the reagents and everything else lined up and the right people and so forth, and now you're doing it within 2 weeks, 12 days.”
—Stephan Smith
To draw a parallel, think back to when disposable cameras were commonplace items in your home. You captured information on them, but you didn’t have the expensive tools necessary to develop that information into usable photos. To get them developed, you dropped them off at a local CVS and picked them up the next day. The problem is kind of like that, except the film is raw DNA samples and the developing machine is far less abundant and costs several thousand dollars just to turn on.
These sequencing machines can cost anywhere between $500K and several million dollars. They’re typically only located at pharmaceutical, university, or hospital laboratories. For example, if you wanted to buy a NovaSeq 6000, you would have to drop roughly $985K (not including reagents and other servicing costs). The Meenta team believes that the utilization rate of these machines typically hovers around 50%, meaning there is potential income to be generated by depreciating multi-million dollar machines 50% of the time. That’s where their marketplace comes in.
The company makes money by charging a small fee on all transactions between scientists and equipment laboratories that are enabled through their online marketplace. There are plenty of other R&D service marketplaces out there that help researchers find the right equipment, but their pricing strategies and quality control methods are more opaque. The entire global portfolio of scientific instruments is estimated to be valued at over $240B, and the Next-Generation Sequencers market Meenta started with is just one slice of that pie.
Meenta helps scientists save valuable time finding equipment so it can instead be spent making important discoveries.
Purchasing your own personal, high-throughput genetic sequencer is rarely feasible if you’re part of a smaller research team. So, what do these scientists do when they don’t own one? They have to call everybody. Between prepping a sample, emailing facilities with the proper equipment, getting quotes, and finalizing payment, scientists are wasting valuable hours that could be spent making important discoveries. Meenta’s marketplace was created to help scientists focus on scientific discoveries instead of cold-calling labs to find equipment openings to run samples. When I first heard about Meenta in 2018, they had recently finished mapping just about every sequencing instrument in the United States.
As you can see, we’ve come a long way in cost reduction for NGS machinery since the turn of the century. However, it’s still quite expensive to own sequencing equipment. Meanwhile, NGS technology is just one vertical within the massive world of expensive scientific research. As network effects begin to take place on the platform, think about all of the utilities needed for research to be fully democratized like computing power is today. What if anyone in the world could hire a lab assistant to take some photos of a sample using an in-house $100K electron microscope? Some fancy laboratories even have nuclear reactors.
“Efforts to accelerate research have thus far focused on making scientific instruments faster and cheaper. However, these advances cannot be fully realized because the infrastructure required to access these technologies simply do not exist. It's as if science has created supercomputers without the internet!” — Meenta
Eventually, the team hopes that their platform will make processing genetic data similar to outsourcing CPU power onto the cloud: cheap and seamless. Much like AWS did for software developers around the world, Meenta’s marketplace could democratize the world of scientific equipment and bring anyone’s research projects past crucial development phases.
You can learn more about Meenta on VentureFizz, Angel Invest Boston, Wired, and The Buzz.
Catch 💳
According to a Form D filed on April 3rd, Boston-based Catch has raised an $8.1M round of equity financing. The round comes twelve months after the three-year-old fintech startup raised a $5M seed from notable investors such as Kleiner Perkins, Khosla Ventures, Chapter One VC, and Kindred Ventures. Catch has developed a wealth management platform focused on helping gig workers build a proper safety net that traditional employers typically provide. It’s run by CEO and co-founder Kristen Anderson, ex-PM at Future Fuel, another employee benefits platform that focused on reducing student debt.
Users on the platform connect their paychecks to the app and Catch automatically deducts the proper percentage each month to pay for things like taxes, time off, retirement, health insurance, and family leave. They make money by collecting a 0.5% management fee on whatever you put towards the retirement portion of your withholdings.
Multisensor Scientific 🏭
Cleantech company Multisensor Scientific just raised $2.16M out of a $6.13M round of funding. No formal announcement on the round, but previous investors are all Boston-based firms like Greentown Labs, Mass CEC, NXT Ventures, Launchpad Venture Group, Clean Energy Venture Group, and Migration Capital.
The company is using infrared imaging and computer vision technology to visualize gasses that are normally invisible. This could easily be applied to detecting farts on the subway, but for now, they’re sticking to using it to help natural gas companies get notified when a pipe is leaking methane. This could help reduce unnecessary greenhouse gas emissions, improve on-site safety, and save gas companies money.
Tomato Jos 🍅
Tomato Jos, a Cambridge and Nigeria-based agricultural social enterprise, just raised $2.4M from so far undisclosed investors. They’ve previously been backed by Chicago-based VestedWorld and received a grant in 2014 from Harvard Business School. The company was formed after founder and CEO Mira Mehta observed that Nigerian farmers produce 65% of tomatoes grown in West African, but are also the largest importer of tomato paste in the world. She set out to build a business that helps Nigerian farmers generate more profit down the value chain by producing tomato paste domestically. Since being founded in 2014, the company has grown to 20 employees and now farms over 500 hectares in Nigeria. Here’s a BusinessDay article about Mira published last week.
Lumint 💱
A Boston-based fintech company called Lumint just raised $570K in angel funding, bringing their total raised to $4.1M. They provide currency hedging sub-advisory services and outsourced FX execution services to institutional investors through a SaaS model. The company was started in 2013 by a group of former portfolio managers and traders who jumped ship from State Street to provide enhanced services to a similar client base.
The firm is a registered Commodity Trading Advisor, allowing them to provide tailored hedging solutions to institutional clients. Some of these solutions include their application, Emma, which provides exposure management solutions that generate rules-based trades for bespoke hedging mandates. They also offer a variety of visualization tools to value hedge positions, track KPIs, and manage fund performance.
Procurrence 📡
Procurrence, a one-year-old startup helping small businesses save money on telecom services, just raised $97K in angel funding from so far undisclosed investors. The company was founded by entrepreneur, angel investor, and telecom veteran, Steve Walsh. Procurrence helps users find the most appropriate cable, phone, and internet service in their area from a price perspective. It also analyzes your bills to uncover potential payment errors, overcharges, or other cost-saving opportunities.
Via 📒
Two companies named Via raised capital this week in the US. One is an on-demand shuttle service with a $2.25B valuation. The other is Somerville-based Via, which raised $2.1M in debt and equity last week. The four-year-old company uses AI and blockchain to help companies in the energy industry transmit and analyze data related to physical assets. They have developed “TAC,” the Trusted Analytics Chain, which brings sensitive data from energy-related assets to decision-makers without compromising on security. The tool is meant to help energy firms understand and prioritize risks related to their critical infrastructure. They’ve gone through several accelerator programs and have now raised over $8M in capital.
Syndic8 🏬
E-commerce analytics company Syndic8 has raised $50K in angel funding. The company has developed a SaaS solution that helps retailers and brands manage e-commerce data and workflows. Led by CEO and co-founder Chris John, Syndic8 hopes to eliminate the bottlenecks that brick-and-mortar retailers experience as they make the shift to digital sales. Their tools are designed to optimize workflows between e-commerce brands and their counterparties, so information on products, sales, inventory, and pricing can easily be shared and updated across all tools. Syndic8’s platform tries to centralize all of these activities so an entire e-commerce operation can be managed from one site.
Preply 🌎
Preply, an online language tutoring marketplace with offices in Massachusetts and across Europe, just raised a $10M Series A to roll out new education tools to customers. The round was led by Hoxton Ventures, with participation from other European VCs like Point Nine Capital, All Iron Ventures, EduCapital, and Diligent Capital. The company has previously been backed by over 27 VCs and angels. Boston representation on the cap table is limited to One Way Ventures and One Way’s Managing Partner/Ex-Techstars Managing Director, Semyon Dukach. Preply helps anyone find or become a tutor at affordable prices, with a focus on language lessons. It was co-founded by current CEO Kirill Bigai back in 2012 and has reportedly seen 2.5x growth in sign-ups since the COVID outbreak.
Thanks for reading!
That’s all from me until next week — If you’d like to connect with me, you can find me on Linkedin and Twitter or check out my website at nickstu.art.
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