The holy grail of validation that ultimately leads to funding
MultiplAI Health is a techbio startup developing highly accurate, low-cost technology that screens for cardiovascular disease (CVD) via a simple blood test. Combining artificial intelligence with the latest advances in RNA genomics, MultiplAI’s technology can detect CVD risk in a standard blood sample before physical symptoms start to appear, and – eventually – for a fraction of the cost of today’s screening tools.
Here, MultiplAI co-founder, COO and CFO Mark Ramondt shares the lessons learnt from the company’s recent investment raise.
By Mark Ramondt, COO/CFO and Co-Founder, MultilplAI:
In September 2022, we successfully raised US$2.7 million in seed investment. The investment, led by SF500, Zentynel and Time Partners, is being directed towards data generation to achieve technical validation of our proprietary products, building the MultiplAI team and expanding our operations and partnerships to the attractive US market. It was not an easy road to navigate but, as one investor put it, being “charmingly persistent” ended up bearing fruit.
On reflection, there was, of course, more to us achieving our investment goal. I believe it is fair to say that our investors based their decision to invest on three key factors: 1) the team, 2) traction/validation, and 3) an ever more convincing vision of an enormous opportunity to help change healthcare as we know it. Along with our early experience as founders, this funding round taught us a few valuable lessons.
Raising funds should be a team effort
Founders have two key responsibilities in my view: fundraising and hiring/retaining a great team. I believe very firmly that investors invest in the combined talents of the entire founding team. And once you have initial investors, it helps to realize that they too now have skin in the game and become part of your team aiming to raise the next round.
I am very lucky to have two co-founders who, three years ago, were very accomplished scientists but realised they needed help to build a business (instead of an amazing scientific paper) out of their inspiring idea.
From the very beginning, my scientific co-founders have accepted fundraising as part of their roles. They do not look to me, formally our COO and CFO, to take full and sole responsibility for fundraising. They put in the hours, sweat and tears needed to pitch, attend conferences, network and generally do things that many scientists have no interest in doing. And they have been amazing at it. It helps that all three founders have a very similar “why?” for being here. We want to save lives on a massive scale.
The process can take longer than expected
We were thrilled when the first of our investors committed to investing. That all important ‘lead investor’ moment would allow us to go to others that were considering similar investments, close the deal and catalyze the closing of the round. However, the whole process, from start to finish, took around 18 months. This was longer than we expected and illustrates the importance of not counting your chickens before they hatch. Stay in camel mode (stretch existing resources to the max) until the money is safely in the bank and available for use.
Progress is key
A massive factor in our success was the fact that we were able to show continuous traction and ‘movement’. Without continuous evidence of validation in one form or another, you lose momentum. Fortunately, in the past three years, every quarter we look back and are quite pleasantly surprised by the progress we’ve made. It almost never feels like it’s enough, but it is almost always faster than we expected.
Being part of a ‘hub’ matters
While being a team originally based in Argentina, we were intent on – and successful in – moving to the UK to launch our company.
Argentina offers many things, including a thriving, world class scientific community, a well-established clinical environment where studies can be run efficiently to the highest international standards, and amazing talent in the areas of bioinformatics and machine learning that are difficult and very expensive to access in ‘the north’ for the average startup. But it is also a small country, far from the centre of the genomics revolution that is the golden triangle in the UK and hubs like San Francisco and Boston/New York. It was clear from the start that building universal genomic screening would take more than what Argentina could offer in terms of sources of investment, access to an ecosystem of partners and talent, and eventually markets to sell our future products.
Over the two years we have been operating out of the UK, we have become visible to the Cambridge and London-based scientific and investment communities. And this has made all the difference to gain momentum.
There is power in partnership
Following on from two of my earlier points, partnerships within the ecosystem we are now a part of have been key to us achieving traction and validation of the scientific basis for our business. It started with MedCity’s early support to find partners and connections in the UK, which helped build our reputation here. MedCity also served as our endorsement body for immigration visas needed to participate in the Illumina Accelerator program in Cambridge. Illumina is the global leader in next generation sequencing (NGS), one of the core technologies we leverage and depend on. With their support, we were able to secure pre-seed investment from external investors at a solid valuation. The six-month program led to the generation of huge amounts of data and an accumulation of invaluable expertise in the technical aspects of leveraging NGS to power our RNA data pipelines.
Conveniently, soon after the Illumina program, we were invited to join the KQ Labs program based in the heart of global genomics, The Francis Crick Institute in London. What better place to develop our network in order to deal with the challenge of analyzing and understanding the massive amounts of data collected with Illumina’s help? We have since partnered with people and world class institutions like Queen Mary University of London (QMUL) and The Barts to run clinical studies, which, in turn, produces new data to validate our ideas.
Today, thanks to all this work, it feels like people are starting to believe in what we are proposing to do and the reasons for which we are doing it.
Invest in relationships
In fundraising, relationships are absolutely key. We have built relationships from scratch in two years that are proving fundamental to our ability to reach the next level. Investors have limited resources, and they will look to references and validation from trusted investing partners to do the hard work around due diligence. This is especially relevant in the techbio field, where deep scientific knowledge and expertise is often required to separate the truly promising from fantasy. For this reason, many would argue that cold-calling investors is simply no longer a viable way in. I would wholeheartedly agree. As a very smart investor once told a large gathering of investors and startups I attended: “Business travels at the speed of trust.”
Be positive in the face of challenges
Finally, I believe that a fundamental part of our success has been that we have stayed optimistic despite all the ups and downs of recent years. Investors sense everything. Especially fear or desperation related to running out of money.
Optimism can be bolstered by taking action to increase your odds. Yes, things can take longer than you expect. And in the coming months and quarters, it may take even longer, given the current market sentiment. We are taking steps like many others to stretch runways and to find creative ways to do more with less. By no means does this mean going into hibernation mode. Camels don’t hibernate, they survive.
In my humble view, what is non-negotiable is to show real movement towards the goal. Without this, the next step will be unattainable. And only the next step will make the following one possible on this marathon of a journey to achieve our optimistic vision of the future.