Rahul Chaturvedi worked for 16 years as a life sciences company executive, but he was also an avid consumer tech fan who chafed at the clunky enterprise apps used in his industry. Spoiled by speedy, user-friendly consumer apps, he also wondered why finding a biotech consultant to hire was so much harder than, say, lining up a vacation rental on Airbnb.
In 2015, Chaturvedi conceived his mission to “spoil” health product development managers a bit by creating an online marketplace where they could quickly hunt for outside experts needed to shepherd a new treatment to its next stage.
Clora, the Boston startup he founded in September of 2016, just scored $3.3 million in a seed financing round led by Spark Capital, which has backed a roster of consumer tech and B2B companies. They include online marketplaces such as Rover, a dog sitter network, and Crowdrise, which matches charities with willing donors.
In the drug and medical device industries, where Chaturvedi had worked for Boston-area companies Kaleido Biosciences, GI Dynamics, and Avedro, he thought he had found another case of people struggling to find each other by antiquated means.
Companies developing new treatments typically need experts in a growing range of specialties to pop in at various stages of a project to do things like uncover toxicities in an experimental drug, or design clinical trials that will satisfy the FDA. Hundreds of distinct skills are involved, Chaturvedi says.
“No one company has all of those skill sets in-house,” Chaturvedi says.
Those specialists, meanwhile, have formed a growing, global cadre of willing consultants over the past five years—in part because some of them want the flexibility of freelancing, and in part because big life sciences companies have been cost-cutting, merging, and reducing staff levels, he says.
In his years as a clinical development executive, Chaturvedi had hired close to 75 consultants over a six- or seven-year period, using traditional methods relied on by most life sciences companies. He put the word out through his personal contacts, posted jobs on social media networks such as LinkedIn, and went through agencies whose fees can amount to double what the consultants earn themselves, he says.
The process can take months, and often, companies never find the right person, Chaturvedi says. So they assign the work to staff professionals who may not only lack the skills needed, but also have to sacrifice time that would have been spent on tasks they’re good at, he says. Chaturvedi quit his job at the end of 2016 to work full-time on his digital marketplace, with the aim of speeding up the consultant recruitment process from months to days, and expanding the options for companies beyond local talent pools.
Chaturvedi bootstrapped the initial development of Clora through his savings, assembling the first group of consultant candidates from his own contacts, while seeking interest from life sciences companies willing to consider hiring through his app.
“The pain points were resonating on both sides, from both the consultant side and the employer side,” Chaturvedi says. His marketplace was operational by the first quarter of this year. Clora, which currently has seven full-time employees, isn’t disclosing the number of its paying customers at this point. (Clora team is pictured, with Chaturvedi in back row, second from the left.)
On the Clora website, hiring managers enter the parameters of their consultant search, including the type of product under development and the area of expertise they need, such as biostatistics, engineering, manufacturing, pharmacology, regulatory strategy, and health insurance reimbursement policy. Companies can specify the hourly rate they’re willing to pay. On the other side, consultants describe their skills, set their own rates, and specify their availability for full- or part-time work. The service is free to these experts, who also go through a Clora vetting step.
Clora gets paid by the hiring company when it makes a successful match. The company filters likely candidates through its algorithm, and sends three proposed candidates to the client within about seven days. Clora’s fee averages 20 percent of what the consultant earns during the project, Chaturvedi says.
Speed matters in the competitive fields of drug and medical device development, Chaturvedi says. A few days’ delay in marketing a new product can mean opportunity costs and millions of dollars in lost revenue, he says.
Clora is not the first company to use software to try to optimize the process of evaluating medical product ideas, winnowing out those that have significant downsides as early as possible, and advancing the most promising ones quickly through testing stages. In 2002, Eli Lilly created an independent unit, Chorus, with a lean in-house staff that relied on a network of outside experts and service providers such as drug manufacturing and testing outfits. Lilly used a software suite called Voice to coordinate the work of all those participants, according to a 2008 report by Harvard Business Review.
Tech startups have since begun opening up such networks to all comers.
In 2011, former academic researcher Elizabeth Iorns co-founded the Bay Area digital marketplace Science Exchange, which allows any company or scientific investigator to find outside vendors to carry out experiments, clinical trials, and other work on life sciences projects. Scientist.com, a similar online exchange founded in San Diego in 2006 by scientist-entrepreneur Kevin Lustig, raised $24 million earlier this year.
Chaturvedi was a customer of Palo Alto, CA-based Science Exchange when he was still a company executive. He applauds the rapid adoption that Iorns’s company has seen within the life sciences industry. But he says its mission can be distinguished from that of Clora, which focuses more on the human capital needed by medical product developers rather than the labs, equipment, and physical research services offered through Science Exchange.
Chaturvedi is interested in having Clora develop new features, such as customer reviews of consultants and bill-payment mechanisms, which Science Exchange has already incorporated into its platform.
The Clora team was attracted to Spark as its first lead venture investor because Spark was experienced at advancing a new trend—-making enterprise and B2B applications more “consumeresque,” Chaturvedi says.
That’s a conscious practice at the VC firm, says John Melas-Kyriazi, a Spark Capital senior associate who will be taking a seat on Clora’s board.
A theme you’ll hear over and over again in every industry, Melas-Kyriazi says, is that people lead two lives these days. The first is a streamlined consumer life due to fast, easy-to-use tech apps. But “then they get to work, sit down at a desk and work on a crappy program,” he says. Spark is actively looking for new opportunities to apply consumer design principles to business challenges, he says.
Spark has made a few forays into life sciences-related investing, but it’s best known for backing e-commerce companies such as Warby Parker and Wayfair; consumer-oriented products such as Tumblr and Oculus; and work collaboration services like Slack and Trello. Spark has offices in San Francisco, Boston and New York.
Melas-Kyriazi says the VC firm’s leadership was already generally aware of the hiring difficulties for life sciences companies when they met Chaturvedi.
“The story resonated,” Melas-Kyriazi says.
With its new capital, Clora will be working to build up its team, expand its customer base, and advance its product and technology development, says Melas-Kyriazi, who will become a company board member for the first time at Clora. Before joining Spark in 2014, he earned undergraduate and master’s degrees in engineering at Stanford University, served as CFO at Stanford-funded accelerator StartX, and co-founded the Stanford-StartX Fund, an investing entity funded by Stanford University and Stanford Hospital.
Spark was joined in Clora’s seed financing round by investors including Social Capital, Ludlow Ventures, Notation Capital, and iSeed Ventures.
The overall network of venture capital firms might become an important catalyst for the growth of Clora, Melas-Kyriazi says. He plans to encourage VC firms to spread the word about Clora to their life sciences portfolio companies that might be in need of a consultant or team member. Venture firms that incubate life sciences companies themselves might also want to use Clora to find founders or expert advisors, he says.
“We see VC firms both as channels and potential end customers,’’ Melas-Kyriazi says.
Photo courtesy of Rahul Chaturvedi