Austin's Babson Diagnostics moves closer to commercialization with $31M funding round

Austin-based medical technology company Babson Diagnostics has raised $31 million in its latest round of funding as it moves closer to commercialization of its products.

The funding round was led by Emerald Development Managers and included investment from existing investors Siemens Healthineers, Prism Ventures, and Lago Consulting Group.

Babson Diagnostics was founded in 2017 and is developing diagnostic blood testing technology that can be used in a retail setting with the goal of making routine blood testing easier, more accessible and less invasive, according to the company.

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Currently, testing options are limited outside of traditional settings such as labs and doctors' offices, the company said. Babson said it wants to expand the range of tests that can be taken outside of traditional points of care, with its primary focus on creating routine tests that can be taken at pharmacies.

The new funding will be used to expand its laboratory and ecosystem infrastructure, finalize its blood testing solution and grow its sales and marketing teams, the company said. 

David Stein, Babson’s chief executive officer, said the funding shows confidence in Babson's technology and partners. He said the money will allow the company to grow and prepare for its commercial product launch.  

“Babson’s unique diagnostics ecosystem will enable mainstream adoption of diagnostic blood testing using micro samples easily collected at highly accessible and convenient locations," Stein said in a written statement. "The additional capital will enable us to further scale the company and our disruptive solutions for regulatory approval, commercial launch and nationwide rollout.”

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Babson Diagnostics was born as part of an incubator program at Siemens Healthineers.  Its technology also uses a collection device developed in collaboration with medical technology giant Becton, Dickinson and Company.  Babson said the resulting technology ecosystem reimagines the way blood testing processes work. 

Babson founder Eric Olson, who is now chairman and chief operating officer, said that the complex world of blood testing has historically been resistant to disruption. 

“We have developed novel technologies across sample collection, sample handling, sample analysis, software, and AI to build a scalable and sustainable value chain for the next generation of blood testing," he said. 

The company’s technology uses small capillary samples, and collects only about one-tenth of the volume of blood normally collected through traditional techniques. Babson’s methods are able to be used in a full range of diagnostic tests that are still accurate, and cost-effective, the company says.

The funding round also follows several milestones for the company, including a clinical study in a retail pharmacy setting that showed the accuracy of the technology compared to conventional blood testing methods. The company said a preference study also had "compelling data" that customers prefer the Babson technology at a pharmacy over traditional methods at a patient service center. 

As part of the round funding round, Neil Cohen, founder and chairman of Emerald Development Managers, is joining Babson Diagnostics' board of directors. Cohen said the firm is confident about Babson’s future and business model based on its science, technology, and progress in the last year. 

“Babson has strong support from two of the most innovative medical technology companies in the world and is led by a team with a proven track record of driving healthcare efficiency and bringing new care models and disruptive solutions to market,” Cohen said in a written statement.

The latest funding builds on a $13.7 million round the company raised last year. At the time, the company also announced that Stein would take over as CEO. He formerly served as head of global strategy and innovation at Siemens Healthineers. At the time, Babson said Stein would focus on commercialization, business development and fundraising. 

Then-CEO Olson moved to become Babson's chief operating officer to focus on technology and operations. The pair previously worked together at Siemens, one of the  largest medical technology companies in the world.

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The company is also among a number of Austin-area companies that helped developed medical technology solutions related to COVID-19. 

In March 2020, the company began to develop a COVID-19 antibody blood serology test, which looks for the type of antibodies that stay around for a long time and might be able to provide immunity from the disease. The company received FDA emergency use authorization last June.

The investment in Babson Diagnostics continues a trend of VC dollars flowing to Austin companies. Austin-based Outdoorsy, which operates an online platform for renting RVs, last week announced it has raised $120 million to fuel its growth. 

Last month, Workrise, which operates a platform for skilled trades, raised $300 million.  In April, Arrive Logistics announced a $300 million infusion to expand its freight brokerage business.

Other sizeable investments in Austin companies this year include software maker Quali, which received $54 million and tech-enabled mortgage platform UpEquity, which raised $25 million.