BioForce Raises $2.5M, Nears Close

In many people’s minds, the list of the country’s top technology universities and entrepreneurial seed mills is heavily weighted with schools on each coast. Iowa State University may not make any of those lists. But, school historians and marketers are quick to claim that ISU researchers created the world’s first digital computer – the machine that preceded and influenced the ENIAC.

This month, another company in little Ames, Iowa, took a step towards inclusion in the university’s technology annals when it announced that it had received $2 million in funding from the private equity team at Paris’ Societe Generale Asset Management (SGAM).

Founded by ISU Molecular Biologist Eric Henderson, BioForce Nanosciences Inc. has developed a system to measure and analyze molecular interactions. SGAM invested $2 million in an open Series A round that, with individual investors, has reached $2.5 million.

“We’re probably going to close it soon,” BioForce President and CEO Gary Alianell says. “The original plan was to raise $3 million in this round, but we may cut it off and go immediately into the next round.” If the round closes at $3 million, Alianell places the round’s pre-money valuation at $6.1 million and the post-money at $9 million.

He says he expects the next round to close at a substantially higher valuation, which coincides with the progress the company is making at signing on partners and preparing to ship a finished product by the third quarter of 2003.

BioForce’s primary product is the NanoPro system, which consists of three parts: an arrayer, nanoarrays and a detection device. The arrayer is a machine that puts samples in place on a nanoarray that can be read by a detection device, which in this case is a fourescent microscope or an atomic force microscope.

A complete system will probably cost between $50,000 and $150,000, depending on the bells and whistles involved. For example, some laboratories will already have a suitable detection device on hand, eliminating that part of the cost. Or, others may want to purchase custom nanoarrays, increasing the cost. Alianell says the company also plans to provide some parts of the process as a fee-based service for labs that don’t buy all the equipment.

BioForce already makes other devices and probes related to this type of analysis and expects to bring in revenue of $1.1 million on those lines this year. Alianell was in the process of hiring his 21st employee last week and expects to have 45 to 50 people on board by June 2003. He says the company’s burn rate is $110,000 per month.

However, even before beefing up to that level, BioForce has already outgrown Ames. The company has established a small force in Philadelphia, and it’s looking to move part of the company to Southern California.

Contact Charles Fellers