Category: Austin (Page 22 of 318)

Austin startups raised $701 million in venture capital in the third quarter of 2022, 30 percent less than the same quarter a year ago, according to the latest Pitchbook-National Venture Capital Association Venture Monitor report.

It’s also a nearly 18 percent decline from the $850 million Austin startups raised in the second quarter of this year.

The number of deals funded in the Austin Round Rock metropolitan area also dropped to 70, down 32 percent from 103 deals in the third quarter of 2021.

To date, Austin startups have raised $4 billion in the first three quarters of 2022, compared to $2.4 billion for the same period in 2021.

The top deal financed in the third quarter was $145 million to Founderpath, which helps SaaS founders get funding without having to raise equity. The second largest deal was MicroTransponder, a medical device company that makes neurostimulation devices to treat neurological diseases, which received $73 million in funding, followed by Happy Health, which created a ring to monitor mood and stress, which received $60 million.

Overall, in Texas, startups raised nearly $1.4 billion in the third quarter of 2022, a 33 percent decrease compared to startups raising $2.1 billion for the same quarter in 2021. The number of deals dropped 35 percent to 145 deals in the third quarter of 2022, compared to 223 for the same quarter a year ago.

Overall, U.S. venture capital deal activity in the first three quarters of 2022 was showing signs of stress in response to economic headwinds, according to the Q3 PitchBook NVCA Venture Monitor, the report jointly produced by PitchBook and the National Venture Capital Association (NVCA) with support from Insperity and J.P. Morgan.

“Deal counts fell across all stages for the second consecutive quarter after reaching a record high in Q1 2022 and total money invested reached a nine-quarter low, cementing a tone of investor hesitancy and increased focus on business fundamentals,” according to the report. “This pullback was especially pronounced at the late stage, where nontraditional investors – the largest drivers of mega deals and the overall growth seen at the top of the market – slowed investment in VC-backed startups. Aside from several outsized deals in Q3, annual exit activity has also been lethargic, with 2022’s exit value on pace to fall below $100 billion for the first time since 2016.”

Despite that, VC fundraising has already reached a new annual record in the first three quarters of the year, according to the report.

“The VC slowdown narrative that has been pervasive in the market this year has finally materialized in the data, with nearly every metric aside from fundraising falling sharply in Q3,”  John Gabbert, founder and CEO of PitchBook, said in a news statement. “The VC ecosystem, however, has shown remarkable resiliency in the face of continued economic headwinds, raising record levels of capital and closing an unexpectedly high number of deals. In many ways, 2021 was an outlier year, and the VC market is now returning to pre-pandemic levels and long-term trends of steady growth.”

HIGHLIGHTS from the Report:

Investment Activity

• VC investment totaled just $43 billion across an estimated 4,074 deals in Q3 2022, a nine-quarter low for deal value. Estimated deal counts have fallen nearly 20 percent from the quarterly high in Q1 2022 – the lowest count since Q4 2020.
• Aside from corporate VC (CVC) investors, nontraditional investor participation fell faster than the broader venture market in 2022. PE firms have participated in just 48.3 percent of deal value in 2022 and asset managers just 34.9 percent compared to 58.5 percent and 43.6 percent in 2021, respectively. Meanwhile, CVCs have participated in 25.6 percent of VC deals year-to-date, as well as nearly 45.3 percent of deal value; both figures are in line with past yearly highs.
• Total dollars invested in late-stage VC decreased by 48.3 percent from the Q2 figure of $48.1 billion and set a record eleven-quarter low. The median late-stage deal size in Q3, $10.0 million, decreased by a third from the 2021 full-year figure of $15 million.

Fundraising Activity

• US VC fundraising reached a new annual high of $150.9 billion in Q3, surpassing last year’s previous record and taking the 21-month fundraising total above $298.1 billion. We are beginning to see momentum atrophy, however, with just $29.4 billion in fundraising added to the dataset since our Q2 report, the lowest quarterly total this year.
• In 2022, 79 percent of the record fundraising has gone to funds led by established managers. Emerging managers suffer disproportionately during economic downturns, as LPs are less likely to increase their VC allocations and commit to GPs with limited or no historical track records.
• Nearly 2,600 VC funds have been closed since the beginning of 2020, with the majority of these still within their new investment period. That is roughly the same number the US market saw closed from 2006 through 2015.

Exit Activity

• With just $14 billion in exit value generated across an estimated 302 exits in Q3, this year’s total exit value is in danger of falling below $100 billion for the first time since 2016.
• 2022 has produced only 59 public listings, just one year after a record 303 VC-backed public listings generated $670 billion in exit value. The frozen IPO market continued in Q3, with just five companies exiting via traditional IPOs this quarter.
• SPACs – once pervasive in the market – have all but disappeared, with only three SPACs completing listing this quarter, a far cry from the peak of 281 listings in Q1 2021. Many of the remaining SPACs that have yet to complete acquisitions are nearing their two-year time limit, at which point shareholders can opt to have their investment returned.

Top 10 V.C. Deals for Austin in the 3^rd Quarter

1. Founderpath                  Commercial Banks      $145 million
2. MicroTransponder.       Software                       $73 million
3. Happy Health                Healthcare                    $60 million
4. Form Bio                       Healthcare                    $30 million
5. CrowdStreet                  Software                       $28 million
6. FeatureBase                   Software                       $28 million
7. Spruce                           Commercial Services     $26 million
8. INK Games                   Software                         $19 million
9. Zippy                             Software.                        $16 million
10. Theori                            Commercial Services     $15 million

Source: Pitchbook-National Venture Capital Association Venture Monitor data.

Sponsored Post

In 2016, Theresia Intag noticed the recruiting model for companies was broken.

“I knew how to fix it,” said Intag, founder and CEO of IntagHire™.

To do that, she founded IntagHire™ and created a fractional recruiting model that allowed companies to have access to a whole team of professional recruiters that truly represent their company while saving over 50% of the money they would pay for a traditional recruiting agency. The model is highly scalable and increases the number of quality candidates for companies, Intag said. Better yet, you don’t have to lay off a recruiter when hiring slows down. We turn our hours up or down to suit your needs.

“We’re disrupting the recruiting service model,” Intag said.

And that disruption is paying off. IntagHire™ has already helped its clients hire over 180 employees in 2022 and is on track to hire 250 employees by the end of the year. Its business has tripled in size in the last three years.

Intag started the company because as a working mom, she knew parents lose a lot of momentum when they step out of the workforce. She saw a lot of moms that wanted to work but also wanted to have the flexibility to spend time with their families. Yet there were very few part-time jobs to keep parents engaged in the workforce. She saw an opportunity to provide those professionals with part-time work with flexible schedules as recruiters.

Intag also started offering hourly recruiting services to companies.

“We act as the recruiting team for a company,” Intag said. “We coach them on best practices for attracting candidates, interviewing candidates, and onboarding them.”

Intag offers IntagStart™ as a fractional recruiting solution for startups. It primarily works with companies that have between 50 to 500 employees. IntagBoost™ is supplemental hourly recruiting whenever a recruiting team needs an extra “boost”.

“We provide a complete recruiting team but you’re only paying part-time hours for it,” Intag said.

With IntagBoost™, companies can plug in a recruiter to work for six to nine months on a special project for a particular department.

Intag knows the different cultures of startups and corporations and that each has different recruiting needs. She has more than two decades of experience in the talent space, working for Samsung, Yeti Coolers, and Bazaarvoice.

Intag’s success has led the company to be named a 2019 Top Five Recruiting Firm, and Intag was nominated for the 2022 Austin Women in Business Award both by the Austin Business Journal.

Today, Intag Hire has 12 recruiters. It tends to work primarily with business-to-business software companies, medical device companies, marketing, consulting, and IT firms. It has national and international clients in California, Tennessee, South Dakota, Washington, Texas and Australia, and Canada.

“Our employees are all part-time because they need the flexible schedules,” Intag said. “They can take summers off if they want to spend time with their kids.”

Intag’s clients love it. They aren’t spending as much money. Intag’s services cost 50 percent less than contingency firms.

“We are actually running the recruiting for our clients,” Intag said. “We are often working with the CEOs and HR leaders to build out the team when needed. “

Intag is bootstrapped and runs on revenue.

“I wanted to create a company that had a balance between being supportive to employees and also making money,” she said. “We wanted a humane approach to working and through that, we’ve gained loyalty from our recruiters.”

The Pandemic opened the doors for Intag even more.

“Remote workers became more common, and all of our recruiters are remote,” Intag said. “People were less fearful about that. And flexibility was also our foundation.”

Today, the biggest issue facing companies is a lack of people, Intag said.

“We’re going to have a lack of people for the next year,” she said. “There is half a person available for every open spot. That’s how much of a shortfall we have. That will lessen a little bit but there still won’t be enough people.”

As a result, companies have to change their interview processes and their approach to candidates because they lose them overwise, she said.

“As an employer, you have to streamline more,” she said. “You have to streamline the interview process to make the offer faster. You have to make your business more compelling and showcase the business and what the strengths are of your organization.”

Intag works with a company’s marketing department to show them how to be attractive to candidates.

“We help coach our clients on how to show their more positive side,” Intag said.

Today, employees are looking for compelling opportunities and good workplace culture.

“Our job is to represent the company and to talk about the culture, the leadership, and what makes them interesting and where the company is heading,” Intag said. “We really act like internal recruiters when we represent the companies.”

Restaurants that use ConverseNow’s AI technology platform can reduce costs, and increase productivity and efficiency, according to the company.

And that has led to tremendous growth, said Benjamin Brown, ConverseNow’s vice president of marketing.

Today, more than 1,200 restaurants in 40 states use ConverseNow’s technology to take orders from customers. Its customers include Domino’s Pizza, Fazoli’s, and Blake’s Lotaburger.

To fuel its growth, ConverseNow recently closed on $10 million in funding in partnership with Enlightened Hospitality Investments, the growth equity fund co-founded by Danny Meyer, the founder of Union Square Hospitality Group and Shake Shack.

“We’ve seen a dramatic shift in the way consumers engage with restaurants over the past two years, and for restaurants to earn customer loyalty today they must deliver memorable experiences. Our team is thrilled to partner with ConverseNow as the company drives innovation in the restaurant industry by enabling team members to spend more time interacting with guests where they can bring hospitality to the forefront of their offering,” Meyer said

ConverseNow previously closed on a $15 million Series A round, bringing its total funding to $28.8 million. The company has 100 employees and its Austin headquarters is based at WeWork in the Domain. It also has employees in India and Argentina.

ConverseNow created a patented order-taking system that uses virtual assistants in English and Spanish.

During the pandemic, the company’s technology got a huge boost as restaurants looked for ways to automate their order-taking processes, Brown said.

The funding allows ConverseNow to meet demand and enter new markets.

“We are incredibly honored to partner with the hospitality leaders at EHI and USHG as we look forward to our next phase of growth,” Vinay Shukla, co-founder, and CEO of ConverseNow, said in a news release. “Even after last year’s 12X revenue growth, we’ve come a long way in 2022. Just about every restaurant chain is looking at voice AI, and naturally coming to us as the category market leader. Demand is very strong, and one of our biggest challenges has been ramping up our AI to keep up with this demand, so an additional round was necessary to accommodate this customer growth without needing to raise a full Series B.”

ConverseNow has helped restaurants boost same-store sales by up to 30%, increase average tickets by up to 20%, and provide up to 12 hours of additional labor per store each week.

“We’ve seen remarkable results with the customers we’re live with now. Our engineering and product teams have made the impossible possible, and now it’s time to scale these efforts to deploy with more brands, in more stores,” said Rahul Aggarwal, Co-Founder, COO, and Chief Product Officer for ConverseNow. “We’ve developed a robust product suite with a growing list of patents to train the AI quicker, integrate with necessary hardware and software providers, and provide analytics for each operator to unlock never-before-seen insights. We’re excited to bring this value to many more leading restaurants.”

Sponsored Post

It’s a lot of work to run a small business, from red tape hold-ups to ever-growing mounds of paperwork to mounting fees and compliance issues. Decent, an Austin-based professional employer organization (PEO) offering small businesses benefits, payroll, and compliance help, personified these small business stressors in a new ad campaign, “No More Small Business Monsters.” 

“If you’ve run a small business or startup, you know these nuisance monsters — inevitably taking away time and resources from running your business,” describes Nick Soman, CEO and founder of Decent, and three-time small business owner himself. “Small businesses can beat these monsters by partnering up with Decent.”

No More Small Business Monsters is the first large-scale campaign for the Austin, Texas-based startup since it transitioned into a PEO at the end of 2021. Decent designs and administers its exclusive employee health plans, which they’ve designed around affordability and convenience, including low monthly premiums, free primary care, and zero-dollar medical deductibles. 

“Our payroll and HR admin fees are the lowest around, and that’s because our focus is on making good health insurance actually affordable and accessible to small businesses,” explained Soman.

Meet the Monsters

• Red Tape Worm: This Small Business Monster uses its long and winding body to confuse small business owners, forcing them to jump through hoops until they’ve exhausted themselves.
• Paperwork Pest: This snowballing whirlwind of paperwork will do whatever it can to get between small business owners and anything productive.
• Nickel & Demon: Did you ever notice how EVERYTHING comes back costing you more out of pocket than was quoted? This little demon is behind all the nickel and diming that adds up to some very big bills.
• Time Fritter Critter: Every small business owner knows how seemingly small payroll or HR tasks can spiral to take out a whole afternoon. That’s the work of the Time Fritter Critter.
• Bigfoot*Note: Think you know what you bought? Guess again, because the Bigfoot*Note has some fine print they’re hiding that’s going to change that entirely (and not in a good way).
• BOOGYMANager: This middle manager might be great at their specific job, but, yikes, do they have no idea what they’re doing when it comes to HR (and you’re the one liable).

Check out Decent’s small business monsters by visiting www.decent.com/smallbusinessmonsters.

EyeVI Technologies, which is in the geospatial AI-powered digital data production industry in Europe, announced it has opened its U.S. headquarters at Capital Factory. The company’s development hub remains in Estonia.

Capital Factory hosted an event on Sept. 23^rd to welcome the company with Estonian President Alar Karis, Congressman Lloyd Doggett, and several local city officials and business leaders.

“EyeVI has specialized in a unique area, to analyze roads with artificial intelligence with very high precision and predict the areas which need the most urgent maintenance. By doing so, maintenance companies can minimize the costs of road maintenance,”  The President of Estonia Karis said in a news statement. “This is a good example of the ways technology can lower our ecological footprint and lead us towards a more sustainable future.”

The company plans to focus on road maintenance issues in the U.S. and Texas.  The U.S. congress recently passed the $1 trillion infrastructure bill and the White House estimates Texas will receive about $35.4 billion over five years to upgrade roads, bridges, pipes, ports, and more.

“I am very impressed by EyeVi and what the company might offer at a time when we’ve put over $30 billion into transportation in Texas through the infrastructure bill we passed a year ago, and we want to see that money go as far as possible. In a state this big, our roadway system and identifying maintenance defects before they occur is really important to us,” Texas Congressman Lloyd Doggett said in a news statement.

EyeVi uses artificial intelligence to streamline and automate mapping and geospatial data processing, EyeVi’s technology helps road surveying companies and government organizations unlock better insights to solve road maintenance issues. EyeVi cuts cost by 50% on average over conventional road surveying systems used today, according to the company.

EyeVi also recently raised $2 million in a seed round of funding led by ff Venture Capital, with the participation of RKKVC, Decacorn Capital, Iron Wolf Capital, Super angel, Spring Capital, Kaamos Group, and several Estonian business angels including Väino Kaldoja, the founder of AuveTech, and Taavi Rõivas, the former prime minister of Estonia. 

“Expanding EyeVi’s presence to North America is another important step in accelerating our growth and will allow us to bring our platform to scale. We are very excited to start offering US companies our road network intelligence solutions,” Gaspar Anton, CEO of EyeVi, said in a news statement.

EyeVI also participated in the DOT studio focused on electric vehicle charging and pavement marking analysis in New York City.

Austin’s Firefly Aerospace had a successful launch of its rocket.

The company announced that it’s Alpha FLTA002 mission successfully reached orbit and deployed customer payloads, lifting off on Oct. 1^st at 12:01 a.m. Pacific Standard Time from Vandenberg Space Force Base in California.

It reached orbit on its second attempt. Firefly’s rocket exploded on its first attempt in September of 2021.

Firefly also now has a rocket ready to take customers to space in the highly desired 1300kg payload lift class.  

“With the success of this flight, Firefly has announced to the world there is a new orbital launch vehicle, available today, with a capacity that is pivotal to our commercial and government customers,” Bill Weber, Firefly CEO, said in a news release. “Proving our flight and deployment capabilities on only our second attempt is a testament to the maturity of our technology and the expertise of our team. This is an exciting day at Firefly, and we have many, many more ahead. I could not be more excited for the Firefly team.”

During the mission, Alpha successfully completed all major technical milestones, including a two-burn maneuver, relighting the second stage during its first orbital flight.

“I am so proud of everyone in the company, both past, and present, who have shared my dream of starting a launch company that would further revolutionize the space economy,” Tom Markusic, Firefly Founder and Chief Technology Advisor said in a news release. “The Firefly team set out to develop the best small launch vehicle in the world. Mission accomplished!”

Firefly is completing the Acceptance Testing Protocol for its Alpha 3 vehicle in preparation for its upcoming NASA VCLS Demo 2-FB ELaNa 43 launch.

In addition, Firefly continues the production of multiple rockets at its Texas manufacturing facilities. Firefly is scheduled for six Alpha launches to take customer payloads to space in 2023, and 12 more in 2024.

Firefly is a portfolio company of AE Industrial Partners, a private equity firm.

The 390,000-square-foot facility is located in Parmer Austin Business Park. BAE Systems plans to use half of the facility for manufacturing. The company has 700 employees in Austin and plans to double its workforce.

“The new campus also includes engineering, design, laboratory, and office space,” according to a news release. The campus is located near Capital Factory, where BAE Systems is a member of Capital Factory’s Innovation Council. It collaborates with startups and small businesses to accelerate the development of new defense technology.

“We are growing our business, our talent, and our brand in Central Texas,” Dave Harrold, vice president and general manager of Countermeasure & Electromagnetic Attack Solutions at BAE Systems Electronic Systems, said in a news release. “Our goal is to double our workforce in Austin over the next several years.”

BAE Systems operations focus on autonomy, cyber, and sensor development. Its work will also focus on new and existing programs including the design, development, and manufacturing of radio frequency and electro-optical/infrared countermeasure systems, as well as aircraft electrification technology.

“BAE Systems and its legacy companies have been in the Austin area for more than 65 years,” Scott Hatch, director of the Austin Business Center, said in a news release. “Our company has been a global leader in technology for generations. Now we’re excited to have innovative Texas talent continue to take us to the next level.”

The new Austin site is part of BAE Systems Electronic Systems sector. The company is hiring.

LIFT Aircraft in Austin has developed HEXA, one of the world’s first production electric vertical take-off and landing aircraft, known as eVTOLs.

At the MOVE America conference last week in Austin, Matt Chasen, the Founder of Lift Aircraft spoke with Martin Salinas, the Chief Operating Officer of AFWERX about the development of dual-use aerial mobility vehicles for the commercial market and the military.

At Capital Factory in downtown Austin, Chasen got introduced to AFWERX and a new initiative that the Air Force had on eVTOLs.

“We didn’t design the aircraft for initial military use,” Chasen said. But the vehicle fit into the Air Force’s plans to leverage commercially viable technology for military purposes, he said. It’s part of the U.S. Air Force’s plan to be a leader in the market, he said.

The small drone market has been dominated by DJI, based in China and that has also made it difficult with supply chain disruptions to provide products in the U.S., Chasen said. The military didn’t want the same thing to happen with larger drones, he said. So, they reached out to startups to partner with on eVTOLs, he said.

AFWERX is different than the average military branch in that it is specifically focused on dual-use, said Salinas, COO of AFWERX.

“We are not forcing the company to create a Frankenstein,” he said. It is looking for adaptable technologies that the military can use, he said.

When Chasen founded LIFT Aircraft he made sure it fit into a very specific Federal Aviation Administration classification for Ultra-Light airplanes. That class does not require FAA certification or a pilot’s license to fly, he said.

“Which means that anyone here today can sit down and learn how to fly HEXA after about 30 minutes in a simulator and you can fly legally,” Chasen said.

LIFT Aircraft’s business plan is to open up locations to provide training and to progressively allow people to increase the distances that they fly, Chasen said. LIFT is focused on the commercial market.

It’s great to have AFWERX come in and be a first customer, Chase said.

In April of 2020, the Air Force launched Agility Prime to work with the eVTOL aircraft industry on testing and experimentation, and to help accelerate the development of eVTOLs, Salinas said.

The program works through the Air Force’s Small Business Technology Transition programs, run by AFWERX AFVentures.

Agility Prime is a Department of the Air Force program and also includes collaboration with the Army for developing eVTOLs.

The partnership with AFWERX has helped LIFT get to where it is today, Chasen said. The company is close to launching its first customer flights in Austin and hopes to have its first location open by the end of the year, he said.

LIFT Aircraft has only been in business for five years and the trajectory of its growth and accomplishments has been pretty amazing, Chasen said.

“The first year we went from a blank sheet of paper to me flying HEXA in a remarkable amount of time,” Chasen said.

LIFT Aircraft has spent the last four years getting to a full production grade aircraft that is fully tested, Chasen said. The Air Force has helped tremendously in the flight test area, he said.

“We’re not just building an aircraft,” Chasen said. “We’re building a vertically integrated service that lets you come to train, and fly the aircraft.”

LIFT Aircraft kicked off its partnership with AFWERX and Agility Prime in April of 2020 and it delivered the first production eVTOL to the Air Force in February of 2021, Chasen said.

“We are in low-rate production now,” Chase said. LIFT Aircraft makes about one HEXA per month, with each one costing between $400,000 to $500,000 to make, he said. LIFT Aircraft partners with Qarbon Aerospace in Red Oak, Texas, to manufacture HEXA.

The range of HEXA is short, but LIFT and AFWERX proved it could be deployed in the field by transporting a folded-up HEXA via a C-130 aircraft, Chasen said.

LIFT Aircraft has raised about $15 million in venture funding to date, Chase said. The company doesn’t plan to sell HEXA to individuals. It plans to sell training and flights to individuals. The flights would cost $250 each. The company was featured on 60 Minutes earlier this year.

Anderson Cooper tests out Lift Aircraft’s Hexa

Electric vertical takeoff and landing vehicles, or eVTOLs, could be the solution to rush hour traffic. But jumping in one to get across town is still a long way off. Anderson Cooper tested out Lift Aircraft’s Hexa to see what this future could look like.

Kaizen is the Japanese business philosophy of continuous improvement as practiced by the Toyota manufacturing system.

John Winner first learned about kaizen in 2009 while a student at the University of Texas at Austin. The idea resonated with him and in 2018, Winner named his company Kizen, a domain name one “a” short of kaizen. He bought the domain name from a self-proclaimed Prince in the Philippines.

Kizen has created the Kizen Operations Cloud, which contains a company’s data and makes it available to operations teams to build applications without coding.

Typically, companies have data about customers stored in 50 different places, Winner said. And 68 percent of all data in organizations is lost or used, he said. Kizen can help them harness that data for actionable insights and customer service and to drive sales and revenue, he said.

“We believe firmly the companies that can properly leverage data in the future will drive the highest customer satisfaction and greatest revenues and success,” Winner said.

Kizen also offers the Kizen Sales CRM that helps accelerate sales as it automates up to 10 hours worth of non-selling activities a week, giving salespeople more time to focus on high-value tasks. 

Since Kizen launched in September 2021, the company has sold more than 400,000 user licenses. Its customers include one of the world’s largest banks and dozens of mid-market customers in over a dozen different industries including healthcare, manufacturing, fintech, and real estate.

And recently, Kizen announced the closing of a $12 million seed round. Kizen plans to use the funds raised on sales and marketing and business intelligence tools. The capital raise was funded by private investors, including several former C-level executives from Dell, Whole Foods, AT&T, Accenture, and Citibank.

Kizen has 38 employees around the United States, South America and Ukraine, Winner said. It has an office in the Arboretum with a dozen employees and the company is hiring sales, marketing and developers.

Over the past decade, Winner saw a lot of disparate and disconnected tools that companies use to try to solve problems. If those tools are connected together, they work better, and solve problems faster and more effectively, he said. That’s what Kizen does.

Winner is from South Florida where he started a few companies before going to college. He decided to base Kizen in Austin because he thinks it’s one of the best ecosystems to start a business.

“You need to have the ability to have team members that have experience building enterprise technology that can scale to millions of users,” he said. Austin also has a lot of entrepreneurial resources and mentors. Kizen has several mentors from Dell, Winner said.

“Austin has been a truly special place to incubate,” he said.

Colossal Biosciences, the company bringing the wooly mammoth and thylacine back to life, Tuesday announced it is spinning out a new venture: Form Bio.

The new company will develop and sell a computational life sciences software platform. Form Bio has raised $30 million in Series A funding led by JAZZ Venture Partners with participation from Thomas Tull, Colossal lead investor.

Form Bio plans to use the funds to further develop its software platform that allows scientists to manage large datasets, process data, visualize results and collaborate with peers. It also plans to hire staff across all business functions, said Kent Wakeford, Form Bio’s Co-CEO and Co-Founder.

“An important area of focus for Form Bio are machine learning models created for cell and gene therapy companies that are proven to optimize the safety, efficacy, and manufacturability of constructs for the next generation of drugs for human health,” Wakeford said. “This new product feature has the potential to radically reduce costs while enhancing speed and safety of cell and gene therapies that come to market in the future.”   

Colossal Biosciences was co-founded with Professor George Church of Harvard University to apply cutting-edge advancements in synthetic biology to address issues of loss of biodiversity, species preservation, and restoration, Wakeford said.

“To advance these objectives, Colossal developed a software platform to expedite the discovery process for CRISPR gene editing and genome assembly,” Wakeford said. “We quickly realized that the platform and machine learning models we created not only advance Colossal’s mission of engine extinction but are also directly beneficial to the entire field of synthetic, biology innovation including bio-manufacturing of medicines, biomaterials, biofuels, recyclable plastics, and food alternatives.”

Form Bio has the potential to play a central role in helping companies working on life-enhancing innovations to reach their greatest breakthroughs faster, Wakeford said.

“By spinning out Form Bio, the company is able to raise capital, build out dedicated teams, and make the platform available to the broader synthetic biology ecosystem, all while creating shareholder value for the Colossal investors,” he said.

Form Bio was co-founded by Ben Lamm, Andrew Busey, and Wakeford.

With the launch of Form Bio, Wakeford will transition from  Colossal’s Chief Operating Officer to Form Bio Co-CEO,  where he will work alongside Co-CEO Busey and support Colossal’s CEO and Board of Directors in an Executive Special Advisor role. Former Biolabs Chief Operating Officer, Adam Milne, has also joined Colossal as its new Chief Operating Officer.

Form Bio’s primary offices are in Austin and Dallas. The company has 40 employees with plans to expand to 75 by the end of 2023 with the majority of those in Austin, Wakeford said.

“Form Bio is the missing piece in scientific discovery,”  Lamm, Colossal Co-Founder and CEO, said in a statement. “When you have a big scientific endeavor like de-extincting a species, you not only need the smartest scientists in the world, you need powerful software, much of which simply hasn’t existed until now. After reviewing everything available on the market, we chose to create our own software solution. Now, we want to share this modern, comprehensive platform with the broader community to impact other areas of scientific innovation, including human health.”

Form Bio’s customers are cell and gene therapy companies, as well as other biotech companies that use advanced molecular biology to develop advanced biologics such as mRNA-based drugs and CRISPR therapeutics and that includes Colossal, Wakeford said.

 “Other synthetic biology companies and the research community will also benefit from using the Form Bio platform,” he said.

“Computer-aided design, fabrication, testing analyses, and machine learning are key to the future of bioengineering in general and specifically the restoration of endangered and extinct genetic diversity for keystone species in vital ecosystems. Form Bio is the software critical to paving the way. As scientist-engineers we need these pipelines and look forward to faster breakthroughs in scientific discoveries and applications, now that software has caught up with science,” said Colossal Co-Founder Church, Professor at Harvard Medical School and MIT and director of Synthetic Biology at the Wyss Institute in Boston.

This is the first spin-out from Colossal, but the company expects to spin out other ventures in the future, Lamm said.

Earlier this month, the White House announced an Executive Order creating the National Biotechnology and Biomanufacturing Initiative, along with multi-billion dollars of funds to support the initiative, said Wakeford.

“The U.S. bioeconomy is currently valued around $1 trillion dollars and expected to grow to over $30 trillion dollars over the next two decades,” Wakeford said. “Form Bio’s platform and machine learning technology will help propel this rapidly growing industry and advance scientific innovation throughout Texas and the rest of the country.”