GenomeQuest has raised $4 million in a Series B round of venture funding that it will use to retool its existing software platform. The move comes in response to shifting markets and increased demand for its genomic search services amid plummeting costs for genome sequencing.
The funding round was led by Chicago’s Mosaix Ventures and follows the company’s $4.1 million Series A round in November 2005, when it called itself Gene-IT [BioInform 12-02-05]. Ranjan Lal, general partner of Mosaix, told BioInform that he believes GenomeQuest is responding well to what he sees as a burgeoning market for its services.
“The size of these … gene sets are exploding exponentially. More and more people are doing it. … Instrumentation is becoming more sophisticated, and with that, comes increased complexity,” Lal said.
The company plans to use the funding to broaden its software platform, which is also called GenomeQuest. CEO Ronald Ranauro told BioInform that the company will “absolutely develop new software,” but declined to provide further details.
“The market for GenomeQuest is expanding enormously. We have huge growth potential in traditional large pharmaceutical and biotechnology drug discovery as well as with new applications in new markets,” Ranauro said in a company statement.
To date, GenomeQuest has marketed its software to intellectual property professionals in pharma and biotech. “We focused our technology on a specific application and use-case in regard to the discovery and interrogation of intellectual property associated with genetic sequencing … [to] develop a clear ROI,” Renauro told BioInform.
This strategy, he said, increased confidence in the product, and what he called the company’s “intellectual property view,” which he said is a “proving ground for the technology.”
It was this strong presence that attracted Mosaix, which joined other Series B investors Cross Atlantic Partners and Milestone Venture Partners of New York, and Paris-based Société Générale Asset Management Alternative Investments.
“[The size of the data set today is] an existing problem that is only getting more difficult … and I think they are well organized to [address the problem],” Lal said. “They have a proven platform on the IP side which extends to the research side; and they have — not a lock — but a very strong position in an emerging segment.”
He said “traditional methods” just haven’t worked.
Apparently, GenomeQuest’s non-traditional approach has served the company well. Ranauro said it has seen a decided uptick in demand for its services over the past two years. As of this summer, the company has 100 customers, and Ranauro said figures are almost doubling year over year.
“Making a platform that can be leveraged across an enterprise, not just biotech and pharma, but other industries looking to use genomic information … is a big task and requires substantial R&D, sales, marketing, and general corporate infrastructure. So we are investing [in these areas] with this new round of financing,” Ranauro said.
“The data set and the size of these … gene sets are exploding exponentially. More and more people are doing it… .Instrumentation is becoming more sophisticated… and with that, comes increased complexity.”
Specifically, this means accelerating the rate at which the company attracts new customers, while working to keep present customers happy.
“Part of how we are doing that is building on our strength in rendering and aggregating public sequencing data and combining it with genetic sequence patents … We can make it available to any scientist right on his or her desktop,” said Ranauro.
He stressed that as high-speed and high-throughput instruments enter the market – be they DNA chips or high-throughput PCR instruments – the need for high-throughput public sequencing analysis on the desktop becomes key.
In addition to broadening its market, developing new software, and making product enhancements, the company also plans to add staff, Ranauro said.
Right now, the company has 25 staffers, a number that will grow — but by how much and when, Ranauro is not sure. He said it’s a “complicated answer” as to the timeline.
Ranauro said that one area GenomeQuest will definitely invest in will be the hiring of “application scientists” to work in tandem with the sales force. “The application scientist is more of a practicing scientist who helps customers adopt the technology,” such as other tools that may need to be integrated with GenomeQuest’s technology, he said.
The presence of onsite support staff would not only help the customer, but benefit GenomeQuest’s bottom line.
“We can help our customers use our technology to solve those problems and they get more productivity. When they scale up, our business grows faster,” Ranauro said.