Can’t Buy Me Love: Michigan Life Science Startups Best Cleantech In Cash, Not Attention
Given Michigan’s expertise in batteries and automobiles, the state’s top high tech sectors should be clean technology and advanced manufacturing, right?
Of the $215 million venture capitalists poured into Michigan last year, about 73 percent, or $156 million, went to medical device, biotech, and drug startups.
In fact, life sciences companies account for 45 percent of the $2.6 billion of capital under management in Michigan, the report says.
Meanwhile, cleantech and advanced manufacturing startups captured a combined 18 percent, or $50 million, of Michigan’s venture capital pie in 2010. Those sectors make up just five percent of all capital managed in the state.
Fifteen life sciences startups, including Accord Biomaterials, Lycera, and Metabolic Solutions Development, won funding in 2010 versus just three advanced manufacturing/materials companies and one cleantech startup.
The numbers are striking for a couple of reasons: one, it’s not even close. For a state that prides itself of on its automotive prowess, cleantech and advanced manufacturing, outside the R&D labs of the Big Three automakers, occupies a shockingly small place in Michigan’s high tech universe.
Second, and perhaps most importantly, the numbers reflect a significant discrepancy between perception and reality. Very few people tell me they think Michigan is a life sciences state, despite evidence to the contrary.
In addition to life science startups attracting the lion’s share of venture capital, look at the state’s most notable exits in recent years: Accuri Cytometers, HandyLab, Health Media, Esperion Therapeutics, Incept Biosystems, all medical-related companies.
Meanwhile, investors and politicians continue play up Michigan’s cleantech credentials.
And not without good reason: the state’s history and talent base strongly suggests Michigan should be a cleantech power.
“There’s no question the state’s innovation ecosystem lies with automobiles and advanced materials,” says Ryan Waddington, co-founder and managing director of Huron River Ventures, a new cleantech fund.
But should be and is are two completely different things.
One can argue, given the data, that Michigan should hit the gas on developing life science clusters.
“We have no good, strategic plan,” Stephen Rapundalo, CEO of MichBIO Institute in Ann Arbor, recently told Xconomy. “We don’t even know what we have.”
Speaking at Xconomy’s recent Michigan 2031 forum, Esperion Therapeutics CEO Roger Newton said the Michigan Economic Development Corp. was not doing enough to promote medical device and biotech companies.
Michigan life science startups may get all of the cash but the state’s nascent cleantech/advanced manufacturing sectors get all of the love.