The Top 10 U.S. University Spin-offs


Some of the most successful startups originate from University research, so we sat down with our data partner Startup.Directory to pick out the 10 most exciting recent spin-offs from U.S. Universities, choosing from more than 500 that have been formed in 2014 or 2015.

The startups span a range of sectors including green technology, IT, materials, biotech, medical devices, and electronics. You can find out more about the startups in the profiles below.

NextPotential / Green Technology

Spin-off from: Arizona State University

Founded 2014

NextPotential converts CO2 emissions from power utility companies into clean- burning natural gas, which substantially decreases greenhouse gas emissions and provides a constant source of renewable energy. The technology provides companies with a way to continue to burn fossil fuels and save billions of dollars in excess costs while reducing the harmful effects associated with the industry.

SioTeX / Green Technology

Spin-off from: Texas State University

Founded 2014

SioTeX™, a specialty chemical and performance materials manufacturer, has developed a drop-in replacement for fumed silica called Eco-Sil™. The production cost of Eco-Sil is 70% lower than that of conventional fumed silica. Their technology uses rice hulls, an abundant biowaste, as the raw material. The process is much simpler than the conventional method, consumes substantially less energy, and involves few toxic reactants.

SmartUQ / IT

Spin-off from: University of Wisconsin-Madison

Founded 2014

SmartUQ is dedicated to developing cutting-edge analytics technologies to accelerate simulation-based decisions and successfully meet data challenges of simulation. Whether using Computational Fluid Dynamics, Finite Element Analysis, Agent-based Models, Coupled and complicated physics, Multiscale, Multiphysics, Electromagnetic simulation or other types of complex simulation, SmartUQ software can dramatically reduce the simulation and product development time, greatly improving decision-making and saving costs.

A-76 Technologies / Materials

Spin-off from: Rice University

Founded 2014

A-76 Technologies develops a multi-purpose product that acts as a preservation coating and lubricant and prevents corrosion in aggressive high salinity, high humidity environments. It works on a wide range of metal surfaces including noble metals, nickel, copper, aluminum, magnesium, and all grades of oil field steel, across a wide range of industries, including oil and gas, maritime, transportation, and household applications.

Alkahest / Biotechnology

Spin-off from: Stanford University

Founded 2014

Alkahest’s mission is to extend people’s health and activity into the advancing years of life. Resolving the challenges for individuals, families and society with aging is one of the most important challenges of our generation. Alkahest is founded on breakthrough science, which has opened new insights and created new opportunities to improve brain function against the negative processes of aging. The company is working to translate these opportunities and discoveries into transformative human therapies.

Emulate / Biotechnology

Spin-off from: Harvard University

Founded 2014

Emulate is focused on commercializing Organs-on-Chips as an automated human bioemulation platform that achieves a new standard for mimicking true human physiology so that responses to medicines, chemicals and diseases can be accurately predicted. Through co-innovation with collaborators and internal programs, Emulate is advancing product innovation, design and safety across a range of applications in drug development, personalized medicine, agriculture and chemical-based consumer products.

ExoVita Biosciences / Biotechnology

Spin-off from: University of New Mexico

Founded 2014

Exovita Biosciences is developing potentially transformative, exosome-based cancer therapeutics that harness the body’s natural defenses to fight cancer. Their initial focus is breast cancer, with the idea of leveraging the technology and resulting therapeutics to other forms of cancer such as pancreatic, colon and prostate.

Synlogic / Biotechnology

Spin-off from: Boston University and MIT

Founded 2014

Synlogic is focused on delivering the potential of next generation synthetic biology to patients. Synlogic leverages the most advanced technology platform available for the creation of therapeutic microbes with the goal to make significant advancements in the treatment of disease.

InvisionHeart / Medical Devices

Spin-off from: Vanderbilt University

Founded 2014

InvisionHeart is developing a cardiac data solution that serves clinicians who care for patients with potential heart conditions. The hardware technology enables physicians, nurses, and care providers to capture, communicate, and utilize patient ECGs in a manner that is both more efficient and cost effective than the current standard of care. At the center of the technology is a cloud-based healthcare IT platform that allows a network of care providers to collaborate, review and annotate patient 12-lead ECG tracings.

Accion Systems / Electronics

Spin-off from: MIT

Founded 2014

Accion Systems is printing propulsion systems for satellites based on a proprietary ion beam technology. The revolutionary new approach to in-space electric propulsion uses simple, modular thruster chips that can go anywhere on a satellite, in any number.

All of these companies are commercializing exciting new technologies that could impact all of our lives. We’re looking forward to watching how they progress.

You can also check out thousands of other global University spin-offs in the VentureRadar database.

A Unicorn or a Double?

One of the hot words in the startup press today is “Unicorns”. Unicorns are private companies with a value of more than $1 billion such as Uber, Snapchat and Dropbox. Many recent news articles are somewhat critical of the growing list of unicorns, many of which are unprofitable. Some articles raise concerns with the potential of a bubble in the valuation of these unicorns. Regardless if there is in fact a bubble, the existence of so many unicorns can lead to institutional investors getting overly focused on investing in baby unicorns.

A friend of mine recently gave me an update on a startup that he has been mentoring. It’s a neat little startup with a young management team, a cool consumer product a nice track record of initial sales. But for the moment it is a one product company, and that product has some unique features but it is not highly protectable, despite one or two patent filings. I could see the company hitting $5 million in sales, and maybe generating $2 million a year in profits without needing a large investment. If the founders ran it for 5 years with continued growth in sales and then sold it for 3 or 4 times EBITA, they would be in a great position to pursue their next idea. I would call that a solid “double”, as in a moderate but not huge success.

But, that’s not the path they are on. They got involved with a Silicon Valley incubator type program. Kudos to them for getting accepted (although there are some strings attached). But now my friend tells me that they have been introduced to VCs out there who are telling them that they have to show how this can become a $1 billion company – a unicorn. That worries me. These young guys are getting caught up in the legitimately exciting atmosphere of the Valley. And I really don’t think they have a baby unicorn. But with enough prompting they may come up with the billion dollar story, start believing it themselves and get an investment from a VC who has cash to burn and is desperate to find a unicorn.

Then maybe they prove me wrong. But if they do become a billion dollar private company, I hope they are profitable, unlike so many unicorns. But what I’m afraid will happen is they will get $20 million or $30 million in investment and then in a few years fail to show adequate growth and the investors won’t allow a modest exit. Rather, they will force them to keep burning through cash until they finally go bankrupt. Now these young entrepreneurs will have received a hard education and come good contacts, but have little else to show for the years of stress. I makes me wonder. Wouldn’t a good clean double be better than chasing a unicorn?

Stemina Biomarker Discovery Launches Autism Clinical Study with $5 Million Funding

Recent funding has launched Stemina Biomarker Discovery into what will be their largest autism spectrum disorder clinical study. In September of 2015, the company was awarded a $2.7 million grant from the National Institute of Mental Health. The Nancy Lurie Marks Family Foundation contributed an additional $2.3 million investment. The study will be known as the Children’s Autism Metabolome Project, or “CAMP” that will involve 1,500 children from age 18 months to 4 years administered at six sites within the U.S. One third of the participants have been diagnosed with autism, another third with other neurodevelopment disorders and the final third who appear to have normal development.

In current autism research, most involve blood tests that study gene expression; however, Stemina’s technology measures metabolites in the blood. The company foresees that their technology can conclusively identify two subgroups within the autism spectrum and discover additional biomarkers. These subgroups are found through changes in the gastrointestinal tract and another in the urea cycle. Currently Stemina has an accuracy rate of 80%. This autism test would be Stemina’s first diagnostic product. By diagnosing autism earlier, it will allow treatments to be tailored the each patient sooner. The company will follow with testing for neurological disorders such as schizophrenia and depression at a later date.

This same technology is being used by the company as a revenue-generating avenue. Using the stem cell technology to screen for possible harmful compounds to developing human embryos. Testing is performed on household cleaning products, pesticides, and consumer products. This product, devTOX, was launched in March 2009.

Stemina Biomarker Discovery began from the work of Gabriela Cezar, DVM, PhD at the University of Wisconsin in 2006. The company was founded by Elizabeth Donley, JD, MBA, MS who is the CEO. The company is currently looking to raise an additional $3 million to allow the CAMP study to expand to additional facilities. The company is making a presence in the Boston area by expanding to the Cambridge Innovation Center in Cambridge, MA in hopes of connecting to new investors. Since the company’s founding they have raised over $15 million.

Xagenic, University of Toronto

Xagenic is a Toronto, Canada based privately held molecular diagnostics company that has developed the Xagenic X1™ platform which allows users to carry out molecular testing in clinics within a short time span of 20 minutes, thus allowing faster diagnosis and treatment.

Xagenic began as a University of Toronto startup and has made rapid strides from there, receiving $15 million (CAD) Series B funding in July 2015 from a diverse array of investors including Domain Associates, BDC Capital, CTI Life Sciences, and Ontario Capital Growth Corporation. Qiagen N.V. is also one of the primary investors in Xagenic.

This interest in Xagenic among investors has been piqued by the following unique characteristics possessed by the Xagenic X1™ platform:

  • Being fully-automated, it is especially very easy and intuitive to use.
  • The actual hands-on time on the device is a mere 1 to 2 minutes.
  • It has a simplistic, portable, desktop-like form factor which makes it easy to train personnel on its usage.
  • It can easily be used in physician offices and clinics alike without the need to depend on labs.
  • The platform is highly scalable implying that it can easily be used for carrying out a wide variety of molecular tests. This factor also heightens the widespread global appeal of the platform beyond immediate surroundings.

Of course, one of the biggest draws for the Xagenic X1™ platform remains the fact that in 20 minutes, one can have test results right up front, thus paving the way for easy diagnosis and commensurate treatment.

At the same time, it must be asserted that Xagenic X1™ platform meets rigorous worldwide IVD and medical device regulations. Thus wide scale implementation of the platform not only within Canada but beyond is not seen as a concern but rather as an opportunity, especially by investors in Xagenic who foresee its rapid global deployment in ensuing times.

Xagenic was founded by Shana Kelley who also serves as the Chief Technology Officer (CTO). The management team at Xagenic is led by Timothy I. Still who serves as the President and Chief Executive Officer (CEO). Both Kelley and Still also serve on the Board of Directors at Xagenic as well.

With regard to utilization of funding as received by Xagenic, President and CEO Timothy I. Still has stressed on accelerating efforts towards bringing the Xagenic X1™ platform to market.

In conclusion, it must be said that Xagenic has an excellent product offering with a potential target group that spans right across the globe, going way beyond its native Canada. Given the immense fervor that has already been witnessed for the Xagenic X1™ platform, Xagenic is clearly poised for prolific growth in ensuing times.

How to Tell a Ten from a Two

Making a quick judgement about the potential of a startup company is often very challenging. Regardless of if you are considering investing in, partnering with or acquiring a startup it is important to quickly make an assessment of how likely the company is to succeed in the long run. University startups can be more challenging than others because the technology is often very complex and the management teams mixed.

We simplify the process at Startup.Directory by rating each startup on a scale from one to ten, based on the experience of the management team, amount of funding the company has raised and other factors. The ratings are shown on the top right of each detail page. Those factors can be a good guide, but you may certainly see a startup that has not raised capital and is in stealth mode (therefore receiving a low rating on our site) that is really a promising startup. In this month’s blog I wanted to discuss two factors that you should consider with any tech startup, university based or not, when making that quick assessment.

The first and most obvious factor is the management team. It can be pretty easy to make an assessment if you meet the entire management team in a private meeting, but more difficult if you are just watching one member pitch or you meet just one member in a casual setting. Obviously we all want to see leadership on the management team that has significant startup experience. When someone with those apparent credentials is on the team it is important to evaluate the true depth of their experience.

I’ve seen CEOs who state they have decades of business experience, but when you dig deeper it is clear that they have had success in large corporations but not yet in a startups. There is a big difference. You also need to discern who is really making the day to day business decisions. Some startups will engage an experienced entrepreneur with a title of Chairman or co-founder when in fact they are just serving as an advisor and have limited say in the daily operations.

A second question I ask myself is “is this a problem looking for a solution or a solution to a problem”. University startups can be particularly guilty of taking a “cool” technical solution, starting a company and then trying to find someone who actually has a problem that needs that solution. Maybe they will find that market, but life is too short to risk capital or time on that approach.

To make this assessment I like to simply ask a startup “who will use your product”. A promising startup will have a focused answer that states the value. For example “Cardiologist love this product because it reduces post-operative infections by 43% in Atherectomy procedures increasing hospital reimbursement rates”. After that response I’ll ask them how big that market is and if there are other applications.

The response I don’t like to hear is a rambling list of unrelated markets with no real prioritization. That suggests that they have developed a solution and want to shotgun it to lots of markets and then hope for success.

Most investors probably have a series of other factors and questions that they use but the ones I described here can be particularly useful in evaluating university based startups. I’ll discuss some additional ideas in future blogs.