The University of Pittsburgh has teamed up with venture capital firm Redleaf Group to create Oak Leaf Networks, a regional business accelerator that will provide coaching, services, capital, and infrastructure support for startup companies developing bioinformatics and drug discovery software as well as other information technology.
Redleaf was an investor in protein biochip maker LumiCyte. Mike Nelson, managing director of Redleaf’s Pittsburgh office, said the University of Pittsburgh, which recently spawned TissueInformatics, Cellomics, and a number of other bioinformatics companies, was a logical location for an acceleration service to drive more business ideas and intellectual property “ out of the labs and into the business world.”
Nelson said that around half of the University of Pittsburgh’s approximately $400 million in funded annual research is in the biomedical area. In addition, nearby Carnegie Mellon University provides plenty of software engineering talent. “There’s an awful lot of raw research going on around the area and I think that really drives business innovation in this space,” Nelson said.
Bioinformatics incubator LaunchCyte also set up shop in Pittsburgh recently, citing proximity to Pitt, Carnegie Mellon, and the Pittsburgh Supercomputing Center among its reasons for choosing that city over Boston, San Francisco, or Washington — seemingly more logical choices for biotech startups.
Pitt’s Office of Technology Management will work with Oak Leaf Networks to facilitate the formation of new ventures based on university technology. Nelson said Oak Leaf would not limit itself to Pitt technology, however, and plans to support entrepreneurs throughout southwestern Pennsylvania and West Virginia.
Permanent space for Oak Leaf Networks will be located in the Oakland neighborhood of Pittsburgh, near the Pitt campus. Redleaf will manage the accelerator and provide pre-seed capital of between $50,000 and $500,000 through a new early-stage venture fund. Oak Leaf would then provide on-site coaching, mentoring, and other assistance to prepare startups for traditional venture capital financing from other sources.
Nelson said Oak Leaf is looking at several companies already and expects to have its office space ready by September. He said the accelerator could possibly fund up to seven or eight opportunities in the first year, increasing that to 15 in year two and 20 or so the following year.