Can Venture Capital Help Unlock 'Underdeveloped' Caltech?

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

Can Venture Capital Help Unlock 'Underdeveloped' Caltech?

The California Institute of Technology ranks as one of the top universities in the world when it comes to receiving patents. But more of those inventions should successfully be making it to market, at least according to the investment thesis of Freeflow, a new pre-seed and seed stage venture firm that exclusively backs Caltech startups focused on human and planetary health.

"The people there are amazing scientists who are not afraid to tackle the hard problems," said Freeflow founder and managing partner David Fleck, who was an early Google employee who has spent the last 20 years tackling big data. "But as I started to spend more time there I realized the ecosystem was somewhat underdeveloped. They needed investors that could help them with capital and help them develop a company."


Fleck wants to be that investor. "We're the only one that we know of having this approach," he added.

David Fleck, who started Freeflow after he sold his online commenting service, Disqus, for a reported $90 million in 2017, hopes to broaden the perception of Los Angeles from a consumer tech hub to a place with the sorts of deep tech companies more commonly associated with where he spent most of his career, Silicon Valley.

Fleck, who started Freeflow after he sold his online commenting service, Disqus, for a reported $90 million in 2017, hopes to broaden the perception of Los Angeles from a consumer tech hub to a place with the sorts of deep tech companies more commonly associated with where he spent most of his career, Silicon Valley. He believes most L.A. VC firms, clustered in Santa Monica, neglect what they view as the hinterlands of Pasadena, where Caltech is based.

"It's very hard to go from west to east," Fleck said. "We made a conscious decision to say we are a Pasadena firm."

Freeflow has raised $8 million of capital so far and is aiming to close a $30 million fund by the end of the year with the help of the heavy hitters on its advisory board who are also serving as limited partners; Fred Wilson, founder of Union Square Ventures, Chris Farmer founder of SignalFire, and Chris Douvos, founder of Ahoy Capital.

Wilson, an early investor in Twitter, Tumblr and Etsy, is based in New York but spends several months every winter in L.A. "He became a good friend and mentor and encouraged us to go after the thesis," Fleck said.

Freeflow is fully independent of Caltech. That differs from the approach of the Massachusetts Institute of Technology, which launched its own venture fund as a public benefit corporation in 2016, The Engine, focusing on "tough tech." Stanford University backed an accelerator starting in 2013, StartX, though the university ended funding last year.

Caltech has had some notable success. Earlier this year, a federal jury in Los Angeles ruled Apple owed Caltech $837 million for selling WiFi chips that infringed on the school's patents and Broadcom, which sold the chips to Apple, owed Caltech another $270 million. (The companies are planning to appeal.)

Freeflow is aiming to back 20 startups over the next 18 months with check sizes averaging around half a million dollars and recently announced its first four investments:

  • Appia Bio: Developing a stem cell therapy platform for the development of new drugs to treat cancer, which was initially developed in the Caltech lab of professor and Nobel laureate Dr. David Baltimore.
  • Entos: Making physics-based machine learning software that maps chemical space to discover promising new molecules for therapeutics, vaccines and diagnostics through a SaaS model.
  • Molecular Instruments: Designs and synthesizes kits for quantitative bio-imaging in drug development, clinical pathology and diagnostics and academic research.
    • Toofon: Developing an autonomous, heavy lift drone for last-mile delivery and emergency response, which came out of Caltech's Center for Autonomous Systems and Technologies (CAST).
    https://twitter.com/thebenbergman
    ben@dot.la

    Subscribe to our newsletter to catch every headline.

    Cadence

    How Real-Time Data Is Helping Physicians Track Their Patients, One Heartbeat at a Time

    S.C. Stuart
    S.C. Stuart is a foreign correspondent (ELLE China, Esquire Latin America), Contributing Writer at Ziff Davis PCMag, and consults as a futurist for Hollywood Studios. Previously, S.C. was the head of digital at Hearst Magazines International while serving as a Non-Executive Director, UK Trade & Investment (US) and Digital Advisor at The Smithsonian.
    How Real-Time Data Is Helping Physicians Track Their Patients, One Heartbeat at a Time

    Are you a human node on a health-based digital network?

    According to research from Insider Intelligence, the U.S. smart wearable user market is poised to grow 25.5% in 2023. Which is to say, there are an increasing number of Angelenos walking around this city whose vital signs can be tracked day and night via their doctor's digital device. If you've signed up to a health-based portal via a workplace insurance scheme, or through a primary care provider's portal which utilizes Google Fit, you’re one of them.

    Do you know your baseline health status and resting heartbeat? Can you track your pulse, and take your own blood pressure? Have you received genetic counseling based on the sequencing of your genome? Do you avoid dairy because it bloats, or because you know you possess the variant that indicates lactose intolerance?

    Read moreShow less

    Who Will Win LA's E-scooter Wars?

    Maylin Tu
    Maylin Tu is a freelance writer who lives in L.A. She writes about scooters, bikes and micro-mobility. Find her hovering by the cheese at your next local tech mixer.
    Who Will Win LA's E-scooter Wars?
    Evan Xie

    Los Angeles — it’s not just beautiful weather, traffic and the Hollywood Walk of Fame — it’s also the largest shared micromobility market in the U.S. with six operators permitted to deploy up to 6,000 vehicles each.

    And despite the open market policy, the competition shows no signs of slowing down.

    Read moreShow less

    March Capital Raises $650 Million Fund to Invest in AI Startups

    Samson Amore

    Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

    March Capital Raises $650 Million Fund to Invest in AI Startups
    March Capital founder Jamie Montgomery. Illustration by Dilara Mundy.

    Santa Monica-based venture outfit March Capital announced Feb. 3 that it raised its largest fund to date, a $650 million investment vehicle that will be used to back up to 15 startups focused on delivering new uses of artificial intelligence.

    Read moreShow less
    https://twitter.com/samsonamore
    samsonamore@dot.la
    RELATEDEDITOR'S PICKS
    LA TECH JOBS
    interchangeLA
    Trending