Who will be the next Medtronic? What will be Minnesota's next breakthrough industry? James Walsh will provide the latest information and commentary on the people, companies and trends driving innovation in Minnesota. From visionary entrepreneurs to game changing technologies, this blog offers a window into the future of Minnesota's economy.
OrthoCor Medical, the Minneapolis-maker of a knee brace that provides relief from arthritis and joint pains, said it has secured $2.4 million in angel investment.
The company said it will use the money to market its products.
“…We are excited to meet the huge demand for our Active Knee System by expanding our sales efforts,” CEO John Dinusson said in a statement.
OrthoCor sells a knee brace that provides heat and electromagnetic therapy to patients. The device is strapped around the knee and two small disposable “pods” snap into docking stations, delivering heat and activating the therapy.
The company has raised a total of $5 million in angel investment since it was founded in 2007.
The firm named Patrick Carroll as its national sales director. Carroll was eastern regional sales manager at medical device business Exos Corp.
Minneapolis-based tech start-up 8thBridge Inc. on Tuesday launched a new Facebook marketing tool that allows consumers to go beyond clicking the “like” button on products.
The new tool, called Graphite, lets customers use new verbs such as “want,” “need,” or “have” to describe their relationships to various brands. For example, if a customer viewing a dress on American Apparel selects the “want” button next to the item, it will post on that customer’s Facebook page that she wanted that dress, which could cause friends to buy it for her.
Already, 8thBridge said more than a dozen retailers will use the new marketing tool, including American Apparel, Hallmark Cards Inc. and Oscar de la Renta. Each brand will be able to customize their own verbs. For example, Hallmark will use buttons that say “Smile,” “Love,” and “LOL.”
“We believe Graphite will usher in a new era of social commerce by making it easy to integrate social shopping capabilities in existing channels,” said Wade Gerten, CEO of 8thBridge.
8thBridge is entering a growing $7.7 billion social media ad revenue market, according to data analytics firm eMarketer Inc. Most of that revenue comes from Facebook.
It’s a challenging environment to raise money for venture funds, but Buzz Benson, managing director for SightLine Partners says he’s up to the task.
Benson is in the process of raising a $100 million fund and he’s already secured an undisclosed portion of that money. He said he expects to compete the fundraising by the end of the calendar year.
“There’s definitely a need for more med tech funds in the marketplace,” Benson said. He declined to elaborate on the details of the fund due to rules under the U.S. Securities and Exchange Commission.
Raising venture funds to finance medical technology start-ups has been difficult because institutional investors are concerned they will not get paid as fast or generously enough for the risk they are taking.
When asked how he will overcome that challenge, Benson said, “Our fund life is seven years, so we’re approaching it a little bit differently in our segment.”
The overall venture industry has been undergoing a lot of consolidation, with fewer new funds and dollars for firms. In the first quarter, 42 U.S. venture firms raised $4.9 billion, a 35 percent decrease in money raised compared to a year ago, according to the National Venture Capital Association and Thomson Reuters.
SightLine Partners considers itself the successor firm to Piper Jaffray Ventures. SightLine acquired the health care venture capital operations in 2004.
The venture firm lists five medical device firms in its current portfolio on its website: Minnetonka-based Anulex Inc., Maple Grove-based CVRx Inc., Mountain View, Calif.-based Broncus Technologies Inc., Raleigh-based LipoScience Inc. and Worchester, Mass.-based Verax Biomedical Inc.
Investments from wealthy individuals into early-stage companies has been picking up, according to a report released this month from University of New Hampshire’s Center for Venture Research.
Angel investments last year were $22.5 billion last year, up 12 percent from 2010, the report said. The number of active investors also increased 20 percent to 318,480.
“It appears that an optimism in angel investing is taking hold,” said Jeffrey Sohl, director of the Center for Venture Research.
Analysts had been concerned that investors were withdrawing from funding start-ups in recent years. Minnesota investors said they were reluctant to invest in new companies because their money was tied up in earlier investments that they couldn’t exit because of the weak economy. They were also concerned about the uncertainty surrounding how long it would take to get federal approval to sell medical devices.
But the new report suggests the situation nationally is improving. Last year, 42 percent of angel investments were going toward companies at the start-up stage. The hottest category for investment was software, representing 23 percent of the deals, the report said. Health care represented 19 percent. The biotech and industry/energy categories each represented 13 percent of the investments.
Edina-based ReconRobotics announced on Wednesday that it acquired St. Paul systems engineering firm Xollai, a move that will expand its portfolio of technologies.
ReconRobotics provides micro-robot systems for the defense and law enforcement industries. Xollai has developed identification software and technology that helps unmanned aircraft land safely.
“This strategic acquisition will give us access to technologies that solve unmet needs in our current markets, as well as entirely new solutions in advanced manufacturing, image processing and unmanned aerial systems,” said Alan Bignall, CEO of ReconRobotics.
Bignall declined to comment on the specific synergies, except to say he looks forward to combining the talented people in both companies. He said in general, a fundamental building block of robots is helping them see better and Xollai’s technology will assist in that.
ReconRobotics did not disclose the financial terms of the deal. All of Xollai’s nine employees will join ReconRobotics, bringing the total number of workers to 54 people. Xollai will remain based in St. Paul and will become part of ReconRobotics’ product engineering and design operations.
ReconRobotics is a fast-growing company. Since its founding in 2006, ReconRobotics says it has grown to be one of the top six robot delivery companies in the world. In February, the company announced its largest contract to date, a $13.9 million agreement to deliver 1,100 robots to the U.S. Army.
“In a short period of time, ReconRobotics has created an entirely new class of police and military robots that has revolutionized tactical operations,” said Robert Malecki, CEO of Xollai. “Our technologies hold similar groundbreaking potential in entirely new sectors and we are delighted to now be working with ReconRobotics to successfully commercialize these solutions for a worldwide market.”
Malecki is now ReconRobotics’ director of engineering.