The Palo Alto, CA-based nonprofit tech accelerator StartX has already grown a biomedical arm, called StartX Med. Now it’s adding laboratory space to its new headquarters in a joint effort with Bay Area incubator network and seed funder QB3.
The new wet lab, dubbed StartX-QB3 Labs, is officially open this week and adds to the growing swath of Bay Area biomedical real estate that caters to tiny startups in need of cheap, flexible research space.
The new facility is relatively small at just 2,000 square feet. (Compare that to QB3′s “953″ incubator in San Francisco, with 23,700 square feet.) But it’s got standard equipment, including ventilator hoods, PCR machines, a light microscope, an autoclave to sterilize tools, and refrigeration for biological samples, plus a hardware prototype room with a 3-D printer.
The 20 bench spaces are theoretically enough to house 20 one-person startups. More likely, a few StartX Med participants will occupy the lab at any one time, with the rest of the benches filled by rent-paying scientist-entrepreneurs not affiliated with the StartX accelerator program.
“In all cases, we hope to accelerate the development of medical, engineering, chemistry, and hardware companies so that they can demonstrate proof of concept and reach their Series A,” says StartX Med founder Andrew Lee, a Stanford University MD/PhD candidate whose academic career is on hiatus as he runs the accelerator offshoot as well as his own biotech startup, Stem Cell Theranostics.
Another highly touted Bay Area accelerator, Y Combinator, has also embraced biotech, showcasing its first class at last week’s Demo Day. But Y Combinator doesn’t have physical lab space to offer its life science participants. (Another difference: StartX, unlike Y Combinator, does not take an equity stake in its participant companies.)
To get a leg up on the lab front, StartX has joined forces with San Francisco-based QB3 (officially the California Institute for Quantitative Biosciences). Originally a product of the University of California’s three Bay Area campuses, the group has become a local life science innovation promoter, renting lab space, offering classes and mentorship, and overseeing a small venture fund.
QB3 will operate the new lab, a small irony in the lore of Bay Area rivalries, with the University of California and Stanford at odds, athletically and culturally, for more than a century.
The StartX program was founded in 2009 by Stanford students and offers tech participants three-month sessions that culminate in a showcase. StartX Med sessions run for six months. (Here’s our slide show from last year’s StartX Demo Day; the next one is September 16 to showcase its 33 summer session companies, 15 of which are StartX Med.)
But StartX didn’t have formal ties to Stanford until last year, when the school and affiliated hospital pledged $3.6 million over three years to the nonprofit, bringing its total funding to $5 million. Stanford also dug into its ample coffers to cofound a small investment fund with StartX. Dubbed the Stanford-StartX Fund, it has spread $18 million across 58 investments so far. About one third of the deals and dollars have gone to StartX Med companies.
When I toured StartX-QB3 Labs last week, the new facility had one occupant: Nirmidas Biotech, which is based on work by Stanford professor Hongjie Dai. The company has created a gold nanofilm that coats run-of-the-mill research equipment, like microarray slides, and amplifies signals. The idea is to give researchers much more sensitive readouts that potentially detect the presence of pathogens or biological molecules that would otherwise go unnoticed.
Nirmidas, which already has a CEO, a director of R&D, and $2 million in seed funding from the Stanford-StartX Fund and other sources, will be at the “biggest end of the spectrum” of lab occupants, said Lee.
Lee is adamant that StartX Med is an accelerator, not an incubator. While typical QB3 residents might stay for years, he sees StartX-QB3 Lab as more of a “launching pad.” But every company moving in, whether StartX Med participants or not, gets one year guaranteed with the potential to renew for six months at a time after that.
Ideally, lab occupants would be working with seed funding to do a specific experiment or project that will give funders a clearer sense of their technology’s viability. “That’s the demographic we’re shooting for,” says Lee.
It’s a stepwise research model that traditional early-stage biotech venture firms are turning to as they search for ways to invest more efficiently, even when they are funding seasoned entrepreneurs. And incubators (or accelerators) in urban biotech clusters are increasingly providing that temporary space. In May, the Janssen Labs arm of Johnson & Johnson (NYSE: JNJ) announced plans to open a 30,000 square foot incubator in South San Francisco.
It wouldn’t be a surprise if more biomedical incubators spring up in Silicon Valley in the coming months. Bay Area real estate prices are out of reach for cash-strapped startups, while a new generation of life science researchers are more comfortable with an open-source and sharing-economy ethos.
There are other advantages to building facilities closer to the scientists who might use them, too. Nirmidas moved from QB3@953 in San Francisco, and now it’s a ten-minute bike ride from its scientific founder’s lab.
Alex Lash is Xconomy's National Biotech Editor. He is based in San Francisco.