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With $25M, Science Exchange’s Marketplace Is No Longer An Experiment

Xconomy San Francisco — 

Internet companies like Airbnb, Uber, and TaskRabbit have helped people turn the extra capacity in their homes, cars, and personal downtime into a revenue stream, then taken their cut of it. Palo Alto, CA-based Science Exchange has brought the sharing economy to biomedical labs, letting scientists in academia, government, and all sizes of companies shop for outside help with an experiment or service.

Science Exchange now has cash to expand. It said today it has raised a $25 million Series B round from an eclectic mix of tech and biotech investment funds and individuals.

Founded in 2011 by Elizabeth Iorns, a cancer researcher at the University of Miami, and Dan Knox, a tech and media veteran, the website is trying to shake the misperception that it’s a place to sell off used equipment. A U.K. site of the same name does exactly that, sowing no small amount of confusion. It also didn’t help that upon launch, CEO Iorns described her company’s site as “an eBay, but for scientific knowledge.”

The eBay part was easier to remember, but Knox says the seller’s knowledge of how to run an experiment makes Science Exchange orders often more bespoke. “Some things like high throughput sequencing are on the verge of becoming commodities, but generally there’s some wrinkle, like the way a lab has to receive or prepare a sample,” says Knox, the chief operating officer and a New Zealand native who met Iorns, an Australian, when she was studying in his home country. Knox remembers how, as their careers progressed, Iorns’s research could be held up by one project that required expertise or equipment she didn’t have on hand.

“I was making fun of science,” Knox says. “If I need someone to run a Python script”—a kind of software programming language—“or do a design, there are places online to tap into talented individuals. And Elizabeth would say, ‘Why doesn’t that exist for me?'”

“That’s why we’re a collaboration platform [for the two sides] to have discussions” about the work, he says. The services offered on Science Exchange run from the mundane, such as equipment repair, to the arcane, like the extraction and sequencing of DNA from preserved remains at the University of California, Santa Cruz’s Paleogenomics Lab.

When Ethan Perlstein was bootstrapping his biotech startup Perlstein Lab in San Francisco two years ago, he used Science Exchange to order fruit flies modified with the gene editing system CRISPR-Cas9 from the University of Utah. The flies were part of his idea to use several organisms to discover drugs to treat rare diseases. He was the only full-time employee; he’s now up to six. “Science Exchange let us hit the ground running,” Perlstein says.

Science Exchange starts with a 10 percent cut of every transaction but gives discounts for big deals and big spenders, which are representing an ever-larger portion of buyers on the site. About two thirds of all orders are from biopharma companies, one third from government and academic scientists. But the average deal value has jumped from about $2,000 per project two years ago to now 10 times that. The rise is driven by big drug companies placing orders worth tens of thousands of dollars, Knox says. He declines to discuss revenues, except to say that they grew 500 percent from 2014 to 2015.

The new cash brings the company’s total fundraising to $31 million since inception. The lead investor in the latest round is David Singer of the hedge fund Maverick Capital, who has several biotech companies to his credit, including Affymetrix, the pioneering maker of genomic tests that fit on a microchip. Singer is taking a Science Exchange board seat. Others in the round include Union Square Ventures, Index Ventures, José Suarez, CEO of the TEDMED conferences, and former AOL chief Steve Case.

With its bounty, Knox says the company wants to expand its pool of providers and its own support staff in Europe to make life easier for its customers there. Currently, about 80 percent of providers on the site are based in the U.S. The company also wants to branch out beyond biomedical research to be a marketplace for other science-focused businesses, like cosmetics or food, Knox says.

Although the underlying technology of online marketplaces “has largely been solved,” Knox would like to make the site easier to use for Science Exchange’s customers and to use machine learning to add the kind of intuitive features that customers at StubHub, Amazon, and Pandora have come to expect: recommendations of other services, for example, or guidance when a supplier isn’t sure how to price an offering.

When asked if he’s prepared to have people tweeting out screenshots of the occasional recommendation-gone-wrong from his site—the science equivalent of “You bought a Hillary Clinton yoga mat, so you might also like this Donald Trump mug”—Knox laughs and says, “If we actually get to that point, I think we’ll be in good shape.”

Photo “Laboratory” by Ryan Somma via a Creative Commons license.