Pittsburgh-based Innovation Works living up to its name
Passing by an Oakland restaurant recently where a local tech CEO was engaged in an intense business lunch with an executive from a major out-of-state venture capital firm, Innovation Works CEO Rich Lunak said he saw the future of the city's tech sector.
And he believes the signs indicate that future is much closer than many, both in and out of the city, realize.
"The region's been showing great momentum in this area. People are taking notice, not only locally, but nationally," he said.
Last year, 72 percent of all venture deals in the region went to companies in the portfolio of Innovation Works, a South Oakland-based tech incubator in its 12th year of providing funding, business resources, office space and the aid of seasoned entrepreneurs to promising startups. The Southwestern Pennsylvania Ben Franklin Technology Partner is an initiative of the state Department of Community and Economic Development.
The organization's seed-fund companies raised $218 million in follow-on funding last year and all of its supported companies raised a total of more than $1 billion in annual revenue.
Mr. Lunak said local startups should only expect the flow of funding coming to the region to increase.
"The news is remarkable in terms of revenues alone, but these companies are making international news while driving the engine of growth in the region," he said.
Coasting off that wave of momentum, Innovation Works kicks off its annual Investor Day and Annual Meeting today at the South Side's Circuit Center with a fresh lineup of startups and updates from proven portfolio companies. Investors, inventors, developers and those interested in developments out of Pittsburgh's tech sector are welcome to attend.
For the organization's companies, Investor Day is a golden moment to capitalize on the increased attention to show off technologies that have been hidden in university labs or launched online to little fanfare.
The eight companies participating in this year's i6 Agile Innovation and University Technology Preview -- an initiative started by Innovation Works and Carnegie Mellon University in 2010 to help commercialize innovations out of local universities -- cover a range of issues from Aquionx's goal of removing organic pollutants from drinking water to Aurochs Brewing Co.'s plan to market gluten-free beer.
According to Greg Coticchia, entrepreneur in residence with the University of Pittsburgh company eButton, one commonality between all companies is a need to introduce the high-tech concepts in a forum that helps investors understand what's actually being marketed.
When showing off eButton, a computer-badge that videotapes a wearer's day for 16 hours, Mr. Coticchia can supplement his oral presentation with video demonstrations of how it can be used to replace photos at amusement parks or as a video diary for dieting. The product was created with $2.6 million in grants from the National Institute of Health.
Mr. Coticchia said Investor Day will give his company the spotlight it needs to earn the additional $500,000 to $1 million needed to bring the product to market.
"This is a great opportunity to get exposure, to help build management teams, to meet someone who may be an entrepreneur or a leader in the community who could help commercialize [the technology]," he said.
For companies in Innovation Works' AlphaLab program unveiling technologies that were just in the idea stage at the beginning of January, the event is a chance to show off how much teams can accomplish through the 20-week program.
The highly competitive startup accelerator program chooses six companies twice a year to receive investment capital, office space and other supportive resources. Two of this year's graduating class of six companies explored medical solutions while others focused on computer games and programs.
Adam Lyons, founder of comparative car insurance site InsuranceZebra.com, said he and a single designer came to AlphaLab the first week of January with an idea and ended up with a five-man "dream team" that put everything together by May 1 when the site launched.
The site, which compares Pennsylvania's auto insurance rates for multiple companies, has seen more than 10,000 users since the launch, with more than one third completing the extended quote process.
After getting off the ground with about $25,000, the company is seeking an additional $500,000 investment to expand the platform across 30 states and to attract 100,000 monthly visitors.
Mr. Lyons, who came up with the idea after working in the insurance industry for several years, said he would have pursued the idea whether he was chosen for AlphaLab or not, but said he doubts things would have come together so soon without the program.
"I think the project would be going along a lot slower; we might not have had the opportunity to meet some key people," he said.
As the pace of tech investments continues to rise at Innovation Works and throughout the region, the odds of meeting individuals key to taking startups to the next level rise with every Investor Day, said Mr. Lunak.
Conversely, as Innovation Works continues to take chances on a diverse array of ideas, the odds of investors finding the right company for their portfolios also increases.
"With more than 150 portfolio companies and 40-plus AlphaLab alumni companies, there's likely to be some deals in your sweet spot," he said in a statement in the Investors Day program booklet.
Peca Labs -- Medical devices, out of Carnegie Mellon University
Aquiox -- Organic pollutant water treatment, CMU
PNA Innovations -- Synthetic nucleic acid platform, CMU
LeanFM Technologies -- 3D building information systems, CMU
The College People -- Social media for the college search process, CMU
Aurochs Brewing -- Gluten-free beer, CMU
NanoVision Diagnostics -- Cancer detection technology, University of Pittsburgh
eButton -- Wearable computer recording device, Pitt
HeadRight Games -- Game development studio marketing hidden object puzzle game
Insurance Zebra -- Comparative auto insurance website
Accel Diagnostics -- Medical technology company marketing finger-prick blood test for congestive heart failure
Bracketz -- Offers tournament-style promotions for online marketing
RoommateFit -- Website that uses personality-based matching to pair roommates
ActivAided Orthotics -- Medical device company marketing rehabilitative body suit for back pain
Pittsburgh Post-Gazette
Deborah M. Todd: dtodd@post-gazette.com or 412-263-1652
First Published May 23, 2012 12:00 am
