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Web and app developer Ryan Abbott. Armed only with an idea, they applied to Y Combinator, the famed Mountain View incubator program that accelerates the development of tech startups through advice, seed funding, and introductions to other investors.
Their acceptance into the three-month program in the summer of 2011 forced a choice: Iorns, an outstanding post-doc, had become an assistant professor at the University of Miami Miller School of Medicine in 2010. She would have to interrupt a career she’d been building for years.
“It was still a little bit scary,’’ Iorns says.
Her lab mentor, Marc Lippman, arranged a sabbatical and encouraged her to pursue her vision.
“I’m an old person and endlessly impressed with how rapidly things can get taken up on the Web,’’ says Lippman, a professor of medicine.
Funding followed quickly at Y Combinator, which invested $20,000 in Science Exchange. Investors Ron Conway and Yuri Milner added $150,000 in uncapped convertible notes (an offer extended to all of the startups in Iorns’ group). In September 2011, that was augmented by $1.5 million from venture firms including Andreessen Horowitz and Crosslink Capital.
Iorns and her team focused early on the supply side of the Science Exchange—assembling an extensive directory of research services with transparent price listings for comparison shopping. As Iorns sees it, the exchange is as much a boon to university core facilities as it is to the outside researchers who want to send them work to do.
The core facilities often run at a loss because they purchase expensive instruments that often are used only part-time, Iorns says. Contracts from outside researchers help core facilities recover the money spent on equipment that can cost hundreds of thousands of dollars. Their customers can now order the tests they want through the Science Exchange website.
Science Exchange also expedites transactions between researchers and providers by acting as a payment intermediary. It handles the bureaucratic thickets of university purchase orders, accepts institutional credit cards, and issues payment checks to providers. To help get core facilities on board, the startup gives them free management software that keeps track of their collaborators’ projects and generates reports and billings.
The Palo Alto startup charges a fee of 3 to 9 percent of the total research expenditure for each transaction. Iorns declined to disclose the revenues earned, or the number of deals completed, since the site went public in May. But the growth rate has been more than 100 percent month-to-month since then, she says.
Science Exchange’s most direct competitor is Assay Depot of San Diego, which bills itself as “the world’s largest online marketplace for pharmaceutical research services.” Assay Depot, founded in 2007, launched its marketplace in September 2008, and now counts 1,158 research service providers as members. However, the global community of contract research organizations is much larger—Assay Depot has compiled global listings that include more than … Next Page »