GenoLogics attracts rare round of U.S. funding

Emerald City interest in Victoria technology firm fires hopes of further investment dollars flowing north into B.C.

Glenn Drexhage

Boosters are hoping that a Seattle venture firm's hand in the financing of a Victoria company underlines increasing interest from the Emerald City in B.C.'s tech sector.

At the beginning of February, GenoLogics Life Sciences Software Inc. announced it had landed a debut venture round worth US$5 million.

The deal was co-led by local firm Yaletown Venture Partners; GrowthWorks Capital Ltd. was involved as well.

Also acting as co-lead was Seattle-based OVP Venture Partners, a notable development given the 21-year-old firm's track record.

"It's the first time we've actively invested our principal money in a Canadian project," said OVP general partner Chad Waite.

Michael Ball, GenoLogics's CEO, said OVP's involvement "absolutely" provided a vote of confidence. "Getting the attention of a premier VC in Seattle certainly is a feather in our cap."

And more deals may lie ahead.

"Several of the major funds in Seattle have unquestionably been investing the time to get to know this market," said Yaletown partner Steven Hnatiuk.

He added that there are about a dozen Seattle VCs with funds under management ranging between about US$100 million and US$750 million, along with a similar number of smaller boutique players.

Certainly, B.C. has attracted some American VC activity in recent years.

In 2003, for example, California's Draper Fisher Jurvetson led a US$7.1 million investment in Vancouver's D-Wave Systems Inc.

Last year, Victoria's Aspreva Pharmaceuticals Corp. landed a massive US$57 million financing led by the Sprout Group, which has offices in New York and Menlo Park, California.

Players closer to home are now also keen on B.C.

"We've seen a number of opportunities both in Vancouver and Victoria," said Chuck Hirsch, managing director at Seattle's Madrona Venture Group, adding that his firm is keen to build relationships with the University of B.C. and Simon Fraser University.

Could there be a Madrona investment in a local company this year?

"We certainly hope so," Hirsch said.

Waite said OVP is investigating two other B.C. companies, one in the life sciences space and the other in data communications.

"You have a great entrepreneurial spirit in Vancouver," he said. "Lots of people willing to take a risk and start a business."

In the meantime, the GenoLogics deal should keep him busy because he's also on the company's board.

GenoLogics grew out of the work of James DeGreef and Jonathan Kerr when they were computer science students at the University of Victoria.

Kerr is no longer with the company. DeGreef, in his late 20s, is its vice-president of product management.

The company, founded in 2002, has developed a software platform that helps life sciences and pharmaceutical labs manage vast amounts of research data.

"At present the large lab facilities find it extremely challenging to just be able to collect and manage the data," Hnatiuk said.

Another complication is that the information comes from disparate, proprietary sources. GenoLogics's offering aims to simplify this process.

"It allows you to compare apples to apples," Waite said.

GenoLogics is initially focusing on the burgeoning field of proteomics - the study of proteins - which is being applied to such areas as cancer research.

Hnatiuk highlighted the company's success thus far.

"[It has an] impressive product, impressive customer list - particularly for a company at this early stage of development."

GenoLogics aims to eventually broaden its approach into spaces such as "systems biology," which would involve handling data across a number of disciplines, such as proteomics and genomics.

The company has 15 employees - 14 in Victoria, and one at its new U.K. office. Ball, 43, said he'd like to add sales offices in Boston and San Francisco.

The GenoLogics roster could also expand considerably. Ball said the company will likely triple its employee base in the next 12 months.

Ball, who joined the company last August and held previous roles at Creo Inc. and Carmanah Technologies Inc., said GenoLogics plans to break even in about three and a half years.