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.