Rainbow Medical is seeking $50 million to expand its investment in medical device startups, and the Israeli firm has already secured support from Medtronic ($MDT) and Abbott Laboratories ($ABT), Globes reports.
The company didn't disclose the size of the investments from the two giants, but if Rainbow can secure this $50 million round, it will likely be able to operate off of its seed companies' dividends from here on out, CEO Efi Cohen-Arazi told Globes.
Rainbow, founded by entrepreneur Yossi Gross, already has 12 portfolio companies, investing between $3 million and $5 million in each to get devices to the human clinical trial phase. Rainbow is looking to reach 15 seed firms with the financing round. The company's method is a bit different from a traditional venture capital: Rainbow licenses its own intellectual property to the firms it seeds, allowing it to maintain majority holding and steer each company's development.
"We're not exactly a venture capital fund, but an operative-investment company that establishes companies on the basis of our patents, a model that exists nowhere else in the world," Cohen-Arazi told Globes.
And, so far, it has been successful. Since Rainbow's founding in 2007, 8 of its 12 companies have reached the clinical trial phase of development, and one already has a CE mark. Among those companies are Vascular Dynamics, which is developing a hypertension stent; Nano-Retina, at work on an artificial retinal prosthesis; and GluSense, a company developing an implantable continuous glucose sensor.
- read the Globes report