The first batch of Y Combinator-backed life science companies made their pitches at the incubator's Demo Day this week. And with one of the startups already bagging $4.5 million from angel investors, Y Combinator is optimistic it can continue to expand into healthcare.
Microbiome testing company uBiome--a sort of 23andMe for microbes--grabbed the headlines even before making its pitch, with Andreessen Horowitz and angel investors coming together to commit $4.5 million. As well as a consumer-focused business that analyzes an individual's bacterial populations, uBiome has around 100 contracts with research groups interested in the microbiome. Biopharma companies are among the businesses to tap uBiome for its microbiome tests, surveys and reference data.
With a $351,000 Indiegogo crowdfunding campaign behind it, uBiome was known outside of biotech even before it joined Y Combinator. The incubator has certainly opened doors for some of its life science companies, though. "Y Combinator is one of the best places to learn fundraising," Jason Kelly, co-founder of Ginkgo Bioworks, told Xconomy. "We're getting interest from venture firms you would never think of as biotech investors."
|Jason Kelly, co-founder of Ginkgo Bioworks|
Ginkgo Bioworks produces custom microbes to order for industrial clients, an activity that puts it well outside Y Combinator's traditional areas of focus. The Boston, MA-based company and the rest of the life science startups share some characteristics with their tech peers, with many of them applying IT to solving biotech-related problems. And unlike startup drug developers, members of the Y Combinator class all have near-term revenue potential, something they share with traditional tech companies.
Having persuaded one batch of life science startups to join Y Combinator, the incubator is confident it can become more active in biotech. "In a new area, it may not be obvious that YC can add a lot of value. But now we'll have biotech companies tell future biotech companies that they should join," Y Combinator President Sam Altman told TechCrunch.