The portfolio companies of The Innovation Space recently eclipsed $1 billion in funding as the not-for-profit organization prepares for new tenants. | PHOTO COURTESY OF DISI
WILMINGTON – When The Innovation Space launched at the DuPont Experimental Station back in 2017, bringing together the University of Delaware, the state of Delaware and DuPont to help incubate a new generation of companies, Bill Provine tried to remain cautious about his expectations.
“I think I would have been ecstatic to clear $100 million in private investment [of portfolio companies] in this many years,” the founder and CEO of the not-for-profit organization told Delaware Business Times.
He was perhaps too cautious in his optimism though, as The Innovation Space celebrated clearing $1 billion in funding of portfolio companies this month. The success of The Innovation Space has drawn attention to Delaware as a place to grow research and development, typically at a cheaper cost than many major metro areas.
“Innovation is critical to creating jobs, opportunity, and prosperity for our state,” Gov. John Carney said in a statement. “In 2017, we partnered with DuPont and the University of Delaware to create the Innovation Space, to offer what many startups cannot afford on their own: state-of-the-art laboratories, premium lab equipment, and quality office space. This partnership has yielded strong results, assisting over 100 startups, including Prelude Therapeutics. The Innovation Space will continue to lead the way for entrepreneurs and changemakers for years to come.”
Of that $1 billion in funding, two biopharmaceutical firms – Prelude Therapeutics and NiKang Therapeutics – have accounted for nearly 75% of the total.
CEO Bill Provine | PHOTO COURTESY OF DISI
Prelude, led by former Incyte executive Kris Vaddi, went public in September 2020 and has since raised $480 million in three separate rounds of public share sales. Meanwhile, NiKang, led by another former Incyte researcher Zhenhai Gao, has raised $250 million in two rounds of private equity fundraising since 2020.
But Provine emphasized that funding alone is not a sign of the importance of a company’s work.
“Therapeutics do require tens or hundreds of millions of dollars to commercialize a drug, but other industries like material science and cleantech may only need millions of dollars,” he said.
Companies like Versogen, working on clean hydrogen electrolysis; Napigen, which is using gene-editing to help improve agricultural productivity; and Hartlon, which is developing a resorbable vascular stent that is designed to salvage limbs that are at risk of amputation by restoring blood flow below the knee, were among those that Provine said were ones to watch out of its portfolio too.
“Things are coming together here and companies are progressing through the pipeline admirably,” Provine said, crediting the ecosystem and the entrepreneurs equally for the success.
A successful startup needs more than just a great idea, he explained. It needs the right workspace, it needs to hire the right people, it needs to find funders who can give it a financial runway and it needs connections to potential board members who can help visualize the path forward. That’s the piece of the puzzle that the Innovation Space has been able to fill for Delaware.
In the physical assets of the organization, The Innovation Space is continuing to upgrade its offerings, investing a $2.5 million federal earmark obtained late last year in equipment upgrades at the site.
The growth of Prelude as it has advanced trials of new small-molecule cancer drug candidates has enabled it to build a new headquarter office and lab at the nearby Chestnut Run Innovation and Science Park, scheduled to open near the end of this year. That will also free up 30,000 square feet of labs at The Innovation Space for a new tenant, and brokerage JLL is helping to market the space.
“I think there’s a variety of options on the table right now. We’re just positioning ourselves to kind of ride that next wave of growth,” Provine said, noting that ideally half of the Prelude space would be taken by a scaling company. “We’re not Labs R’ Us. You’ve got to have a great idea, a great team, and an interesting market opportunity. Then we want to go all in with you to grow and scale that company as quickly as possible.”
While many of the portfolio companies to date have had some origin in Delaware, Provine said the billion-dollar threshold will help the Innovation Space continue to seek new tenants from outside of the First State.
“We can’t just be an island to ourselves. We have to share our capability with others and have them see the value of Delaware,” he added.
That goal is why The Innovation Space also announced a new partnership with Silicon Catalyst, the world’s only incubator and accelerator focused on semiconductor solutions, to co-incubate early-stage companies focused on advanced materials and other enabling technologies critical for the semiconductor industry.
Participants will have access to labs, mentorship, and programming from The Innovation Space alongside Silicon Catalyst’s startup development expertise and its comprehensive ecosystem of strategic partners and advisors.
