News Article

From Antibiotics To Food Safety: Sample6 Finds A Niche, And $12.7M, After A Sharp Turn
Date: Aug 22, 2016
Author: Luke Timmerman
Source: Forbes ( click here to go to the source)

Featured firm in this article: Sample6 Technologies Inc of Woburn, MA

A growth of of salmonella in a petri dish at IEH Laboratories Monday, May 17, 2010, in Lake Forest Park, Wash. (AP Photo/Elaine Thompson)

Say the words "synthetic biology," and venture capitalists think instantly about money in pharmaceuticals. Synlogic, an MIT spinout working to program microbes into drugs that I've covered here, is one example.

Most VCs don't think about food, unless they're eating it. But the scientific entrepreneurs that cooked up Synlogic, James Collins and Tim Lu, have other ideas with potential applications. One of them, a Cambridge, Mass.-based startup called Sample6, scoped out antibiotic discovery, found it couldn't raise money during the grim market of 2009, and hopscotched into food safety.

Now after slogging for a few years in a market that's not known for early adoption of new technology, Sample6 is announcing today it has raised $12.7 million in a Series C venture financing to see how far it can go to help protect global food supplies. The company, with about 20 employees now, has raised about $32 million since its beginning.

"I was a total newbie coming to the food space from engineering," says co-founder and CEO Michael Koeris. "But you learn quickly that everybody who makes food cares extremely deeply about making it safe, clean, affordable, nutritious. It's hard to keep food cheap. You've got to keep it safe. The volumes are huge."

The total addressable market for a better/faster/cheaper mode of detecting bacteria in food is vast, at least theoretically. As Koeris notes, there are about 330 million people in the U.S., and if they eat three meals a day, that's about a billion meals just in this country. That includes a lot of perishable fruits and vegetables and dairy products and meats--most of it moving through supply chains without a lot of surveillance. When food gets contaminated with bad bugs like Salmonella or E. coli 0157, it tends to make headline news, scare people and force food suppliers to do a lot of detective work and careful cleaning to get back on track.
Recommended by Forbes

Big as the market may be, Sample6 has had to start somewhere. The company has developed a technology that can target specific bioparticles, light them up and do it without enriching the sample, like the common polymerase chain reaction (PCR) technique. Food suppliers need to install an illumination box on site that costs about $5,000, and then buy disposable bags at about $16 apiece that contain the company's special enzymes that bind with the desired bacteria.

Much work has gone into making the technology simple and easy enough for someone with a high school education to use, Koeris said. A food processor can swab use on-site to determine if a food sample is contaminated or not within six hours. That's the big idea--that food processors don't need to ship questionable samples to a lab somewhere, which can take three days to deliver a reliable result, Koeris said. Since so much food is perishable in a matter of days, waiting for answers can be costly.

The company's product has been on the market since late 2014, and it has since signed up about 40 customers, including a couple big ones, like Unilever. But Sample6 isn't yet profitable, and its technology is limited. It can only detect one specific pathogen--Listeria monocytogenes. Plans are being put in place to flesh out the technology so it can detect not just Listeria, but also Salmonella and E. coli 0157--a trio of worrisome bacteria for anyone in the food business. The Salmonella detection feature should be ready by January 2017, and the E. coli addition should be about a year later, Koeris said.Continued from page 2

Sample6 has raised a little more than $32 million in venture funding in total. Hopes are that the new shot of cash will help it expand the technology offerings, extend the company's reach to overseas markets with the help of partners and tip over into cash-flow positive territory, Koeris said. Longer-term, there may be an opportunity to pivot again into another market, clinical diagnostics, where physicians sometimes want a fast, specific answer about the presence of certain bacteria in samples.

The investor roster in Sample6 reflects an interest in food safety as a market, which isn't for everybody. The round was led by Acre Venture Partners, new investor Valley Oak Investments and existing investors Canaan Partners and Cultivian Sandbox Ventures. Sam Kass, a former senior advisor on nutrition policy to President Obama and now a partner at Acre Venture Partners, is joining the Sample6 board of directors as part of its investment.

Kass said the investment thesis is pretty simple. "Food safety shockingly lacks modern technology," he wrote. "If food safety technology was compared to the evolution of word processing, I would put us in the age of the typewriter. It typically takes 72 hours to get results on routine safety tests. By that time, products are already heading all over the country. The value of a company being able to complete all essential safety tests within a shift is enormous. We think Sample6 will bring much-needed innovation and disruption to the market, which will benefit food businesses and consumers alike."

The hard part? "Adoption," Kass wrote. "This is a new approach and while first-mover companies are incredibly happy with the technology, it remains to be seen how fast food companies will adopt Sample6. That being said, we very are optimistic."

Luke Timmerman is the founder of Timmerman Report and the author of "Hood: Trailblazer of the Genomics Age."