Brian Gormley's article for The Wall Street Journal:
ParaGen Technologies is getting investors behind an unusual business model designed to enable widespread use of a nanofiber technology for several medical markets.
ParaGen is the parent of four startups applying the technology to areas from wound care to orthopedics. Because these markets are distinct, the company decided to create individual startups to target these fields. One ParaGen company, RenovoDerm, aims to secure regulatory approval to market this technology for wound healing next year.
Columbus, Ohio-based ParaGen has secured $4.1 million in seed financing and expects to close a $5 million Series A round early next year. Seed investors include Ikove Capital, a Columbus-based firm that co-founded ParaGen along with Nanofiber Solutions, a technology company that designs and manufactures nanofiber scaffolds, according to Ikove Managing Partner Flavio Lobato.
Ikove calls itself a “startup nursery” because it identifies technologies, vets their market opportunity, and builds teams to advance them. In so doing it looks to nurse technologies across the “Valley of Death,” the period in which ideas are promising but still too raw to attract substantial investment. Other Ikove companies include eLum Technologies, a developer of neurovascular devices.
By capitalizing on government and non-dilutive funding that supports early technology development, and the relatively low cost of doing business in the Midwest, Ikove can advance companies with relatively little equity funding, according to Managing Partner John D’Orazio.
RenovoDerm nanofiber scaffolds promote healing by mimicking structures in the body. The scaffolds provide a temporary framework for wound repair that helps healing occur more quickly and with less scarring, according to Chief Technology Officer Jed Johnson.
Potential wound-healing applications include diabetic ulcers, pressure ulcers, mole removal and plastic surgery. After securing regulatory clearance next year, the company plans to conduct additional research to decide which uses to pursue first. After narrowing it down, it would then work with third-party institutional researchers to gain more data to support marketing, according to ParaGen Chief Executive Ross Kayuha.