U-M Launches Record Number of Startups That Raised $237M

Ann Arbor’s University of Michigan launched 31 startups in fiscal year 2020, a 40 percent increase from last year despite the COVID-19 pandemic and temporarily shuttered labs.
Refraction AI's REV-1 delivery robot
U-M launched 31 startups in fiscal year 2020, including Refraction AI, a robot food delivery service. The launches reflect an increase from 2019 despite the COVID-19 pandemic. // Photo courtesy of Corey Turner

Ann Arbor’s University of Michigan launched 31 startups in fiscal year 2020, a 40 percent increase from last year despite the COVID-19 pandemic and temporarily shuttered labs.

The startups raised $237 million during the fiscal year, which ended June 30, and marked four “exits” via mergers, acquisitions, or initial public offerings. The startups also brought in $14.5 million in revenue from licensing, which was primarily invested in university innovation and research.

“The launch of 31 new startup companies last fiscal year is a testament to the strength and resiliency of the university’s growing innovation ecosystem,” says Kelly Sexton, associate vice president for research-technology transfer and innovation partnerships. “This record-breaking growth in startup formation is important in 2020 because these new companies will be meaningful contributors to the growth and diversification of our state’s economy as we work to rebound from the challenges presented by the COVID-19 pandemic.”

U-M researchers also reported a rise in new inventions, with a record of 522 inventions compared to last year’s 502, and a slight decrease in U.S. patents. U-M Tech Transfer reported 163 issued U.S. patents in fiscal year 2020, which was down from 171 in fiscal year 2019. It also signed a record of 268 license and option agreements, compared to 232 last year, with companies seeking to commercialize the discoveries of university researchers in the past fiscal year.

“As the nation’s leading public research university, we have an obligation to ensure that our research discoveries are translated from the lab to the marketplace in ways that positively benefit society,” says Rebecca Cunningham, vice president for research and professor of emergency medicine. “The challenges presented by COVID-19 have elevated our sense of urgency and responsibility to ensure that our research leads to improved health care outcomes, enhanced quality of life, and new opportunities for economic growth.”

One notable success from this year includes Ascentage Pharma, a biotech company that develops therapies for cancers, chronic hepatitis B, and age-related diseases, that was listed on the Hong Kong Stock Exchange. During fiscal year 2020, U-M also partnered with Deerfield Management Co., a health care investment firm, to create a company called Great Lakes Discoveries that commercializes therapeutic projects in an effort to solve unmet medical needs. In May, Deerfield committed up to $130 million over the next decade to invest in U-M biomedical research.

BlueConduit, one of the startups, is a water infrastructure analytics company that uses data and machine learning to help cities complete service line inventories and replacement. It has pioneered its services to help the city of Flint save tens of millions of dollars and accelerate the removal of dangerous infrastructure. It is working in more than 30 cities.

LynxDx launched a promising prostate cancer test before pivoting to COVID-19 testing. In the past 14 weeks, it has grown from four employees to more than 30 and has performed more than 30,000 COVID-19 tests across the state.

Refraction AI began delivering food late last year in Ann Arbor with autonomous REV-1 delivery robots, which are battery powered and have a top speed of about 15 miles per hour. They use camera-based navigation and mostly stay in bike lanes.

U-M Tech Transfer will hold its 20th annual Celebrate Invention event from Sept. 21-24. The virtual event is free and open to the public and recognizes entrepreneurship and innovation from university researchers.