Foundry incubates 11th company

The Foundry raised $5 million from Split Rock Partners and Morgenthaler Ventures to incubate its 11th medical device company, CEO Hanson Gifford tells PE Week.

The Menlo Park, Calif.-based incubator works exclusively with medical technology startups to move them from research to development and commercialization. It was founded in 1988 as a partnership of Split Rock and Morgenthaler.

The 11th company The Foundry has incubated has yet to fully coalesce, Gifford says. As is typical with The Foundry, a startup receives money before it has defined exactly what product it will make or even what name it will use. But the latest company is called Newco XI, per Foundry tradition.

The incubator’s previously launched startup, in 2006, was Miramar Labs, a company developing tools for aesthetic procedures. It was formerly known as Newco X and received more than $20 million in subsequent financing in February.

The Foundry has backed at least one company that later went public. It helped to incubate drug-eluting stent company Xtent (Nasdaq: XTNT) in 2002. The company overall raise $76 million from VCs, including Advanced Technology Ventures, before it launched a $75 million IPO in February 2007. Last week, shares of the company were off more than 75% from their offering price.

Another Foundry-incubated company, Concentric Medical, filed to go public in November 2007, but subsequently pulled its offering a few months ago, citing unfavorable market conditions. The company raised more than $50 million from New Enterprise Associates and other investors for a device that helps remove blood clots from the brain. —Alexander Haislip