By Julia Karow
A Danish startup is setting out to match researchers who require next-gen sequencing services with providers who have spare sequencing capacity.
In early May, BlueSeq, based in Aarhus, plans to launch an online exchange to link next-gen sequencing customers with providers. The company also offers online project-design tools as well as information about next-gen sequencing platforms and applications. Services are offered at no cost to users, while providers pay a fee for successful bids.
Michael Heltzen, BlueSeq's CEO, said he first thought of the idea for the company about two and a half years ago while working for bioinformatics software provider CLC Bio. At the time, he came across many owners of next-gen sequencing machines who did not use them to full capacity, as well as researchers interested in the technology but lacking access and detailed knowledge about its capabilities.
"It was difficult for me as an entrepreneur to see how there was a lot of capacity wasted around the world, when at the same time, there were a lot of people who had a big need for the same capacity," he said. "That was a driving factor of why we started BlueSeq."
"It was clear that the most optimal way both for providers and users of sequencing services would be an exchange, if we could find a way to decode the next-generation sequencing needs of people and a good way to communicate them," Heltzen said.
About six months ago, he and a group of programmers and sequencing experts started to build a project-design software tool based on a decision tree that outlines the different ways a next-gen sequencer can be used, including all types of projects, applications, and protocols. The software, which guides users through a series of questions about their projects, helps them not only to describe their studies precisely and uniformly, but also to come up with the best sequencing approaches. Depending on the particular study, it could suggest one platform and protocol or provide several alternatives.
Heltzen is quick to point out that BluSeq has no preference for one technology over another. "We are a neutral player in this game," he said. "All our decisions will be fact-based and we are not under the influence of any specific company."
After a user submits a project, BlueSeq's team — currently a staff of 10 — looks at the information to make sure it is clear and optimized.
Sequencing providers then receive information about those projects that fit their criteria, for example their sequencing platforms and the applications they run, and the capacity they currently have available. "Providers are as much hunting as the project owners are in some cases," Heltzen said, and "they can pick the projects around the world that fit their free capacity."
Based on the bids they receive from providers, users can then decide who to go with. Their decision might not necessarily be based on cost alone but also on wait time, or the experience a provider has with a certain protocol. In a future version of the exchange that is already under development, users will be able to specify additional parameters, such as low price, bioinformatics services, or phone-based customer service.
So far, BlueSeq has signed up 10 sequencing providers, about half of them commercial and half academic, which have several types of sequencing systems among them. Any provider worldwide with any platform is welcome to join, Heltzen said.
St. Louis-based Cofactor Genomics is one of the providers, but BlueSeq is not disclosing the others at this time. Another 20 providers are in the process of signing up, according to Heltzen.
In addition to the project-design tool and project exchange, BlueSeq also provides an online "knowledge bank" with basic information about sequencing platforms, applications, accessory tools, and relevant conferences.
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BlueSeq's services are free for users, or "project owners." Sequencing service providers pay an exchange fee each time they make a successful bid, ranging from 5 to 10 percent of the total project fee. The company is betting that the fee will be worth it for service shops, "especially for providers selling capacity that they would otherwise throw in the bin because they would just run the machines at half capacity," Heltzen said.
BlueSeq "provides an opportunity for us to work with clients that may not be aware of our expertise," said Jon Armstrong, chief operating officer of Cofactor Genomics. The service "has the potential for reaching clients that our normal marketing channels may not cover."
Cofactor, which operates Illumina, SOLiD, and 454 sequencing systems, currently runs at 75 percent to 80 percent capacity and might add additional capacity if BlueSeq succeeds in bringing in more customers, Armstrong said.
In the future, BlueSeq, which is currently funded with private equity from founders and investors, might add new software tools and services — for example, quoting tools that would help providers calculate their internal costs as well as suggest a possible sales price. "That is a big problem for a lot of providers right now, that they actually have a hard time understanding their own cost structures," according to Heltzen. Those additional services might require the firm to raise more funding, he added.
BlueSeq is not the only firm seeking to match customers and providers of sequencing services, though. Findini, a German online service operated by Berlin-based Moosbaum, offers similar services. According to the firm's website, researchers can submit descriptions for microarray as well as next-generation sequencing projects and will receive quotes from participating service providers.
Heltzen said that BlueSeq will be different because of its project design software and because its staff helps find the best matches on the provider side.
German sequencing service provider GATC Biotech said that it has used Findini before and that its experience with the service has been "very positive so far" because "all inquiries we received were real and serious ones," according to a company spokesperson. "We feel that it is an additional and quite interesting lead channel. Obviously, it seems to be an interesting business model, too, and now we have to wait and see which platform will succeed in the long run."
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