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Groupon co-founder Eric Lefkofsky just raised another $200 million for his newest company, Tempus

Posted by on May 31, 2019 in Baillie Gifford, Biotech, drug development, eric lefkofsky, Groupon, Recent Funding, Revolution Growth, Science, Startups, TC, Tempus | 0 comments

When serial entrepreneur Eric Lefkofsky grows a company, he puts the pedal to the metal. When in 2011 his last company, the Chicago-based coupons site Groupon, raised $950 million from investors, it was the largest amount raised by a startup ever. It was just over three years old at the time, and it went public later that same year.

Lefkofsky seems to be stealing a page from the same playbook for his newest company, Tempus. The Chicago-based genomic testing and data analysis company was founded a little more than three years ago, yet it has already hired nearly 700 employees and raised more than $500 million — including through a new $200 million round that values the company at $3.1 billion.

According to the Chicago Tribune, that new valuation makes it — as Groupon once was — one of Chicago’s most highly valued privately held companies.

So why all the fuss? As the Tribune explains it, Tempus has built a platform to collect, structure and analyze the clinical data that’s often unorganized in electronic medical record systems. The company also generates genomic data by sequencing patient DNA and other information in its lab.

The goal is to help doctors create customized treatments for each individual patient, Lefkofsky tells the paper.

So far, it has partnered with numerous cancer treatment centers that are apparently giving Tempus human data from which to learn. Tempus is also seemingly generating data “in vitro,” as is another company we featured recently called Insitro, a drug development startup founded by famed AI researcher Daphne Koller. With Insitro, it is working on a liver disease treatment owing to a tie-up with Gilead, which has amassed related human data over the years from which Insitro can use to learn. As a complementary data source, Insitro is trying to learn what the disease does in a “dish,” then determine if it can use what it observes using machine learning to predict what it sees in people.

While’s Tempus genomic testing is centered on cancers for now, Lefkofsky already says that Tempus wants to expand into diabetes and depression, too.

In the meantime, he tells Crain’s Chicago Business that Tempus is already generating “significant” revenue. “Our oldest partners, have, in most cases, now expanded to different subgroups (of cancer). What we’re doing is working.”

Investors in the latest round include Baillie Gifford; Revolution Growth; New Enterprise Associates; funds and accounts managed by T. Rowe Price; Novo Holdings; and the investment management company Franklin Templeton.


Source: The Tech Crunch

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After burning through $1 billion, Jawbone’s Hosain Rahman has raised $65 million more

Posted by on May 11, 2019 in Hosain Rahman, Jawbone, jawbone health, Refactor Capital, signalfire, TC, wearable devices, Wearables | 0 comments

Not everyone gets a second chance in Silicon Valley. Entrepreneur Hosain Rahman has been given many more than that. Though his last company, Jawbone, which produced wireless speakers and Bluetooth earpieces, went kaput in 2017 after burning up $1 billion in venture funding over the course of ten years, Rahman has managed to raise $65.4 million for his new company. So shows a new SEC filing that, coincidentally or otherwise, was processed late yesterday while most of the world’s attention was focused on Uber’s IPO.

The company, Jawbone Health, isn’t brand new. According to reports of two years ago and Rahman’s LinkedIn bio, he began working in earnest on his newest endeavor when the original Jawbone was running on fumes in the summer of 2017.

In fact, according to LinkedIn, Jawbone Health now employs 51 people, including some who worked with Rahman previously. Among these is the new outfit’s VP of engineering, Jonathan Hummel, who’d been a senior engineering manager at Jawbone during the last two years of its life. Others are new to the organization because of its focus on healthcare. These include Yaniv Kerem, Jawbone Health’s VP of Informatics, whose last job was as an emergency medical physician with Kaiser Permanente.

Certainly, the company has a very different mission than even the wearable fitness trackers that Jawbone began making as a kind of Hail Mary pass, and whose failure signaled to some the end of the wearables industry — though it was really just the end of Jawbone.

As Rahman told reporter Kara Swisher last fall, what Jawbone Health is selling is a “personalized subscription service where we take all of this continuous health data about you and we combine that with a lot of machine intelligence . . .”

The idea is to prevent the avoidable diseases that wind up killing two-thirds of us owing to bad-decision making and plain-old inattention. “If you catch that stuff early and you change your behavior or whatnot, you can push out half of those deaths and save 70 percent of the cost,” he told her, adding that Jawbone Health is making its own devices, which will will come free with the service.

Still, one obvious concern for the new company is competition. Where Jawbone made attractive, wireless speakers ahead of many other companies whose products now litter our homes, Rahman is seemingly late to the party with Jawbone Health. There are already rings that track sleep activity and heart rate; bracelets that come with built-in accelerometers, heart rate sensors, and temperature sensors; and even textiles that unlock biometric insights.

That’s saying nothing of the Apple Watch, which has already put plenty of startups out of business.

Rahman says one of Jawbone Health’s biggest differentiators is that the product and service are “clinical grade.” That may be a selling point for some consumers, though we’d imagine most won’t really care. After all, humans don’t have the best track record when it comes to taking care of themselves.

Either way, the new funding, atop so much lost capital already, is sure to frustrate some founders who’ve been given fewer opportunities. It may also confuse others who’ve either worked with or funded Rahman in the past.

Then again, Rahman wouldn’t be the first founder to bounce back from failure, and he has plenty to prove. His new backers may well be counting on it.

According to the filing, Jawbone Health is backed by SignalFire and Refactor Capital in the Bay Area, and Polymath Ventures in Dubai. In his sit-down with Swisher, Rahman had also said that Meraas in Dubai is an investor. Indeed, he described it as the company’s “primary” investor.

We’ll have more on the company soon.


Source: The Tech Crunch

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These companies may smooth startups’ path to the public market — if they don’t kill each other first

Posted by on May 11, 2019 in Andreessen Horowitz, Carta, Eric Ries, Marc Andreessen, TC | 0 comments

This morning, the SEC approved as the U.S.’s 14th stock exchange Long Term Stock Exchange (LTSE), an outfit that was conceived in 2012 by “Lean Startup” author Eric Ries as a place where public market shareholders who hold onto their shares through thick and thin would be rewarded for their loyalty.

Ries thinks such rewards are important because he believes in public markets. Among other things, by establishing a common currency, being publicly traded enables companies to more easily acquire other companies. It enables employees to more freely sell their shares. It also allows retail investors to participate in the growth of tech companies — growth from which they’ve largely been shut out in recent years as the average time a company remains private has stretched to roughly 12 years.

Indeed, Ries’s biggest issue with public market shareholders is their focus on short-term results, citing it as the primary reason that startups remain privately held for so long. After all, it’s hard to innovate when you’re being sued over disappointing earnings.

Whether LTSE can usher in rules that encourage both companies and shareholders to focus on the longer term remains to be seen. LTSE has not received approval over any kind of listings standards. It hasn’t even submitted these yet.

While ideally, the exchange wants to welcome “values-based” companies that limit executive bonuses and grant more voting power to shareholders who hang on for the ride, Ries seems to recognize that he may have to settle for less owing to some pushback, including from the Council of Institutional Investors, a group of institutions that fear long-term voting could empower company insiders at the expense of other shareholders. During a call today, he told us that LTSE won’t necessarily give more voting power to shareholders. “These rewards could be voting or other things,” he said.

Certainly, Ries will benefit if LTSE takes off. While numerous reports today note that famed VC Marc Andreessen is one of LTSE’s financial backers, the biggest shareholder right now is Ries himself, who owns 30 percent of the for-profit company, according to government filings.

Other major shareholders include John Bautista, a cofounder of Long Term Stock Exchange who is also an attorney with the law firm Orrick; Founders Fund, which owns 14 percent of the company; Collaborative Fund, which owns 7.8 percent; and Obvious Ventures, which owns 6.7 percent. The company has raised roughly $19 million altogether to date.

Ries is hardly alone wanting companies to be able to go public sooner without worrying about activist investors. We’d written about the case for tenured voting in late 2017, noting then that concept has been around for decades.

But while it resonates with founders, few others have embraced the idea. Back in the 1980s, for example, U.S. stock exchanges determined that tenured voting was unnecessarily complicated and too hard to track. Bankers don’t like the idea because anything that looks different to the market is harder to sell.

Meanwhile, another Andreessen-backed startup to make headlines this week — Carta — seems like a bet that LTSE won’t realize its vision completely. The seven-year-old, San Francisco-based startup largely helps private company investors, founders, and employees manage their equity and ownership. But it just raised $300 million in Series E funding at a $1.7 billion valuation led by Andreessen Horowitz largely to become what Carta CEO Henry Ward describes as the world’s largest marketplace for private company shares.

Carta paints the evolution as a natural one given the needs of aging private companies, as well as the fact that so many startups and institutional investors use its platform already.

In fact, Ward, like Ries, talks about democratizing access to more of today’s up-and-coming companies on Carta’s platform. Still, Ries seems more interesting in getting shares into the hands of people who haven’t been able to access them in recent years; Carta seems more interested in more efficiently allowing startups and already wealthy institutional investors to trade shares amongst themselves, using Carta as a hub. (Carta also has exponentially more funding than LSTE, having raised $447 million altogether from VCs.)

Whether either company realizes its bold ambitions will take time to know. Much depends on external factors, like the macroeconomy, and whether outfits like SoftBank keeps showering privately held companies with funding.

In the meantime, it will be interesting to understand whether LTSE and Carta can together create a safer, smoother path for startups that are looking to go public. It’s certainly one plausible scenario.

Another is that the two wind up locked in a kind of battle for founders’ souls, with Carta enticing companies to stay private, while LTSE pushes for them to get onto its exchange — and out into the broader world.

We’d be curious to know what Andreessen Horowitz imagines will happen. We asked the firm earlier today; we’re still waiting on a response.


Source: The Tech Crunch

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Kids on 45th just raised millions in seed funding to sell lightly used kids clothes — sight unseen

Posted by on Apr 17, 2019 in eCommerce, maveron ventures, Yes VC | 0 comments

A seemingly endless number of startups has attracted funding in recent years to make life easier for people with money to spend. They’re sold sell nice clothes, chic shoes, cool office space, on-demand car services, on-demand laundry services, on-demand cleaning services, anti-aging therapies. It goes on and on.

Overlooked in the process is the overwhelmingly majority of Americans. In 2015, the top 1 percent of U.S. made more than 25 times what families in the bottom 99 percent did, a gap that has been growing. Most families aren’t spending money on making life easier or more glamorous for themselves because they can’t afford it. More, they’re often too busy to think much about it.

There are rare exceptions to startups that cater to more affluent populations. One company that comes to mind is Propel, a New York-based startup whose app helps food stamp recipients improve their financial health. Another is Yenko, a for-profit outfit committed to improving graduation outcomes.

Now, an even newer player has entered onto the scene whose proposition makes all the sense in the world for the many harried, overworked, and budget-conscious families out there. Called Kids on 45th, the nearly two-year-old, Seattle-based startup bundles up what it describes as nearly new clothing that suits the current season, and it sends it to customers sight unseen for far less than they would pay elsewhere, and requiring a lot less of their time.

The company ties back to a Seattle consignment store of the same name that’s been up and running since 1989. Entrepreneur Elise Worthy describes it as a “cornerstone” of the local parenting community, and she would know. She decided to buy the business two year ago, not only to save it when it teetered on the brink of closure, but to better understand how she might turn it to a scalable enterprise.  She learned plenty, too, including that when moms came into the store because their children had outgrown their clothes, they weren’t looking for anything specific. “They were just trying to solve a problem. They didn’t care if it was this pair or that pair; they just needed pants.”

The observation led to a revelation that Worthy could build an online business without creating an elaborate website with photos and clothing descriptions. In fact, she decided to build an anti-browsing experience that allows a shopper to say what sizes are needed, and what types of items (coats, pants, shirts), one sentence about his her kid’s style, and that’s it. It’s highly counterintuitive for today’s e-commerce landscape. But a customer mostly clicks a few boxes, then waits for however many items were ordered to arrive. Because each item is priced at between $3 and $4, what that shopper doesn’t like, he or she can just donate.

Indeed, part of what makes Kids on 45th work as a business is that it’s saving on a lot of fronts. Aside from not creating and maintaining a sophisticated, content-rich website, the company doesn’t accept returns, which can prove a crushing expense for other e-commerce concerns. According to the National Retail Federation, return rates on clothing are close to 40 percent when the merchandise is bought online.

The startup, which is bundling clothes for newborns to kids up to age 16, also has systems in place that should enable it to scale, including an exclusive fulfillment relationship with one of the country’s few aggregators of thrift clothing. After paying for clothes that this partner deems to be in high-quality condition — it has plenty of options, thanks to the more than 20 billion pounds of clothing that Americans donate each year — Kids on 45th puts its staff of 15 stylists to work. “We optimize for the mom who is holding both her cell phone and her kid,” explains Worthy. “We want her to be able to check out in less than two minutes, then hand over that hunting experience to us.”

Kids on 45th has a few other things going for it, as well. First, it doesn’t charge on a subscription basis, unlike some other startups boxing up kids’ clothing, like Rockets of Awesome and Kidbox, and it insists that it doesn’t need to. “We don’t want to trap moms,” says Worthy. “We’ll send them reminder emails,” she says, and they come right back. “Our retention is on a par with companies that charge subscriptions. Moms return at the same rate on their own.”

The idea of ordering bundles of kids clothing is also catching on fast. Just yesterday, Walmart announced that it’s partnering with Kidbox to enable shoppers to purchase up to six different boxes from Walmart each year. Each will include four to five items and cost $48, said the company. That’s roughly the same average order size at Kids on 45th, says Worthy — though the startup sends off between 12 to 15 items for the same amount.

Not last, while Kids on 45th is decidedly unflashy, it’s capitalizing on one of of the biggest trends in the world right now: growing awareness about landfills throughout the U.S. that are teeming with textiles that could easily be recycled, if only there were more places for it to go.

Certainly, the young company has momentum. It says has already shipped more than half a million items just a year after launching its online business. It also just raised $3.3 million in seed funding. Its backers include Yes VC, Maveron, SoGal Ventures, Sesame Street Ventures & Collaborative Fund, Liquid 2 VC, and Brand Foundry Ventures. No doubt they’re looking for returns, as VCs do. But it’s also an investment about which they can feel good. After all, if Kids on 45th can intercept more of the lightly used goods in the world and put them to smart use, more power to it.


Source: The Tech Crunch

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A new lawsuit involving Stanford and Sequoia Capital highlights fights to come over cell-free DNA testing

Posted by on Mar 26, 2019 in CareDx, guardant health, Health, Illumina, Lawsuit, Natera, sequoia capital, Stanford University, TC | 0 comments

This morning, a publicly traded transplant diagnostics company called CareDx, along with Stanford University, sued another publicly traded genetic testing company, Natera, for patent infringement.

Much appears to be at stake, and it all centers on cell-free DNA testing, a type of technology that has already been at the crux of numerous lawsuits and looks poised to play center stage again in future corporate battles.

Loosely defined, cell-free DNA (or cfDNA) technology involves blood tests that enable physicians to understand what’s happening in someone’s body. They’re not looking at red or white blood cells (thus the “cell free” part) but at plasma, which carries pieces of broken-up DNA, among other things.

Companies like newly public Guardant Health are using it to try to ensure that cancer patients receive the right drugs. Prenatal cfDNA screening has meanwhile become a common way to screen for specific chromosomal problems in a developing baby — including Down syndrome, trisomy 13 and trisomy 18. The latter has become particularly popular as an alternative to amniocentesis, a more intrusive, and sometimes high-risk, procedure in which a small amount of amniotic fluid is sampled from the amniotic sac surrounding a developing fetus.

Yet another way that cfDNA testing can monitor clinical conditions and make a major impact on healthcare is by distinguishing the relative proportion of DNA molecules in a patient’s blood after that person has had an organ transplant. Though traditionally, recipients have had to undergo biopsies to gauge whether or not their new organ was being accepted or rejected, it’s now possible to measure through the far-less traumatic process of providing blood samples. (Broadly speaking, if, over time, the amount of donor DNA increases in the patient’s blood, things aren’t going well.)

It’s an important, if relatively new, development, and CareDx, a 19-year-old, Brisbane, Calif.-based company that went public in 2014, claims in its newly filed lawsuit that two patents it controls give it the exclusive right to non-invasively diagnose graft rejection in a great many organ transplant patients via cfDNA testing. What we mean: one of the patents covers “kidney transplant, a heart transplant, a liver transplant, a pancreas transplant, a lung transplant, a skin transplant, and any combination thereof.” The second patent covers 16 different methods, devices, compositions and kits for diagnosing or predicting transplant status or patient outcome.

The patents were awarded to Stanford academics in recent years, including Stephen Quake, a renowned professor of bioengineering and applied physics. Though Stanford owns the patents, however, it licenses them to CareDx, and they’ve dramatically enhanced the company’s prospects. Indeed, while its shares were priced at $10 apiece at the time of its IPO, they’ve been trading at $40 each more recently, thanks largely to its AlloSure test, which is designed specifically for kidney transplant patients and, critically, is now covered by Medicare.

Indeed, CareDx’s lawsuit against 15-year-old Natera, which went public in 2015, accuses it of “preparing to develop and commercialize” a too-similar kidney transplant rejection test beginning in the middle of last year. It’s seeking cash compensation and a court order that blocks the sale of Natera’s offering. It’s an offensive move, too, seemingly, given all those other organs at stake and the markets they could unlock.

Natera, which counts Sequoia Capital’s Roelof Botha as a board member, did not provide management for comment on the suit. Botha also declined through a Sequoia spokesperson to comment. But Natera sent us the following statement about it: “We are confident that we will prevail in this suit should it proceed and do not expect this suit to impact our commercialization plans or disrupt our operations in any way. We are not surprised that CareDx would attempt to disrupt the imminent commercialization of Natera’s innovative organ transplant rejection test, which does not require donor genotyping, and will compete with CareDx’s older test. In recently published studies, Natera demonstrated superior analytical and clinical test performance.”

What happens next remains to be seen, but it’s not the first imbroglio in which Natera finds itself.  A year ago, the gene-testing company Illumina filed a lawsuit against Natera, alleging that the company’s non-invasive prenatal testing infringes a patent that Illumina controls and that relies on analysis of cell-free DNA present in maternal blood. That case is still moving toward a trial. In the meantime, Illumina last year separately won a $26.7 million jury verdict in a lawsuit accusing a subsidiary of Roche Holdings of using patented prenatal testing technology without authorization.

Last year, Natera also agreed to pay $11.4 million to settle a lawsuit with the U.S. government, after it alleged that Natera submitted false claims to several government health programs based on tips by two former Natera employees who filed an earlier whistleblower lawsuit against the company.

Natera — whose founding CEO, Matthew Rabinowitz, stepped down from his position in January of this year, replaced by longtime Natera employee and COO Steve Chapman — denied the allegations and, as part of the settlement terms, did not admit any wrongdoing.

Either way, Natera, CareDx and Illumina aren’t the only ones duking it out over cell-free DNA testing.

In 2017, for example, Guardant filed a lawsuit against rival Foundation Medicine, alleging that Foundation’s advertising for its own liquid and tissue tests harmed both Guardant and cancer patients by misleading oncologists about the relative accuracy and sensitivity of the competing genomic tests. Foundation later sued Guardant, alleging infringement of a patent that covers methods for analyzing a cancer patient’s tissue or blood sample to detect multiple classes of genomic alterations.

The two companies have since settled both without disclosing the terms of their agreement.


Source: The Tech Crunch

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