A $500MM+ Funding, A $105MM Purchase, Xenter News, Cannabis Patent, and More (Week-in-Review Highlights, June 19—25, 2021)
Lucid lands a $500 million secondary investment; Health Catalyst is spending over $100 million to acquire a New Mexico company; Xenter finally shares some details on its go-to-market plans; and more.
This past week was relatively quiet within Utah’s business community, news-wise, and then all heck broke loose Thursday morning with the news that South Jordan, Utah-based Lucid has raised over $500 million in a “secondary investment.”
According to the company news release, the investment places a $3 billion valuation on Lucid and makes it a “Unicorn” three-times over.
And if memory serves me correctly, this $500 million round of funding is the largest ever in Utah for a privately held firm.
Leading the investment round were Alkeon Capital, Tiger Global and STEADFAST Capital Ventures, with additional participation from the following prior investors:
Spectrum Equity,
ICONIQ Capital,
Meritech Capital,
Grayhawk Capital, and
Kickstart (headquartered in Cottonwood Heights, Utah).
In April 2020, Lucid announced it had raised $52 million in a Series D round of funding that gave the company a $948 million pre-money valuation, which (if you’re paying attention), means that on a post-money basis Lucid was valued at the time at a cool $1 billion.
Tripling its value in a bit over one year, however, is pretty impressive and was likely driven in large part by the fact that Lucid hit $100 million in Annual Recurring Revenue (ARR) in the first quarter of 2020.
Additionally, the news release explained that Lucid saw
“… record bookings in April 2021, with growth up over 100% from the prior year.”
In total, Crunchbase reports that Lucid has raised just over $670 million since its formation in 2010.
So … what does Lucid do? Lucid provides online design tools to help
“… teams (and individuals) to see and build the future from idea to reality.”
What does that mean? Lucidspark is a virtual whiteboard application, while Lucidchart“is an intelligent diagramming application.”
To me, the YouTube commercial below showcases some of the capabilities of Lucidchart in a humorous way, whether or not you like cats — or kitters. Enjoy!
Health Catalyst is Acquiring Twistle for $104.5 Million with a Possible One-Year Earnout of up to $65 Million
Turns out that the PR gods weren’t done, however, as Salt Lake City-based Health Catalyst announced late yesterday afternoon that it was acquiring Albuquerque, New Mexico-based Twistle.
Although the news release did not put a price tag on the transaction, the Form 8K filing with the U.S. Securities and Trade Commission did share that information.
Bottom line, Twistle shareholders will receive $104.5 million, with roughly $45.5 million paid in Health Catalyst stock and the balance in cash (NasdaqGS:HCAT).
Additionally, Twistle shareholders stand to receive up to $65 million in additional earn-out monies should Twistle achieve certain goals of increased ARR in the coming 12 months.
For 2021, Health Catalyst anticipates Twistle will generate ~$8 million in revenue, which means HCAT is valuing Twistle at over 13X revenue — not counting the potential earn-out payment.
To learn more about the rationale and details behind the acquisition, please check-out this Health Catalyst Investor Presentation.
Xenter Acquires Novel Drug Candidate and Forms New Subsidiary for Targeting Autoimmune and Chronic Inflammation
Well … it’s taken two-and-a-half months and five separate news releases, but we finally have an idea of what Salt Lake City-based Xenter is up to.
Specifically … Xenter announced on Wednesday that it has
Purchased a novel ROR gamma T (RORγT) drug that is in the clinical testing stage,
Formed Xenter Therapeutics as a business unit focused on “the therapeutic drug element of Xenter’s mission,” and
Tapped Xenter Board Member, David Bearss, Ph.D., as the president of Xenter Therapeutics.
According to the news release, RORγT stands for “retinoic acid-related orphan receptor-gamma T.”
In plain English …
The drug compound Xenter acquired, XT-0528, is designed to help people combat chronic- and autoimmune-related inflammation by “flipping the switch” {my language, not Xenter’s} of Th17 helper T-cells to produce and secrete Interleukin17 in the body.
{NOTE: Xenter did not disclose how much it paid to acquire XT-0528, nor the organization that sold Xenter the compound.}
To continue — a Phase I clinical trial in normal healthy volunteers has already been completed using XT-0528, and Xenter plans to launch a new clinical trial with the drug candidate in early 2022 on a new medical condition (aka, a “new indication”).
While nearly all healthcare startups focus initially on one device, drug, disease or medical condition, Xenter was launched out-of-the-gate going after three different, yet interrelated healthcare areas:
Therapeutic Drugs,
Medical Devices, and
Digital Health and Data.
Notwithstanding the importance of the company’s news announcement this week, Digital Health and Data is where Xenter will likely have the greatest impact on the healthcare industry and society as a whole. Why?
Because Xenter plans to build what may become the largest cloud-based database of personal medical data, creating a life sciences knowledge base empowered by data transmitted from within the body by smart medical devices.
According to Xenter’s Founder, Chairman and CEO, Richard J. Linder*, Utah is the fastest growing market in the United States in the life sciences industry.
Not only does Richard plan to keep Xenter in Utah, he also says he’s not focused on a financial exit for the company.
“Utah is a tremendous environment for life sciences. Having built a number of successful life science companies in Utah and had multiple successful exits, we are building Xenter into a large life science company and will keep it based in Utah.
“Our smart medical devices will enable us to build a global healthcare cloud. Our therapeutics drug discovery teams will utilize these data sets to identify new drug targets. Xenter will grow into a large ongoing company and we plan to continue building and we are not focused on an exit.
“This makes Xenter unique … very different from my previous companies. We plan to have a massive impact on Utah’s economy as well as patient care.”
To get a sense of the brilliance driving Xenter, I invite you to watch the YouTube video below where Richard is interviewed on Good Things Orange County.
Besides the over-the-top bubbliness of the main host and the 15-minute length of the video, it’s definitely worth the watch.
Hurricane, Utah Cannabis Company Granted Patent for New Cannabinoid
In case you didn’t know this, Utah is definitely not a cannabis hotbed, either nationally or internationally. And that’s in spite of the fact that Utah has nearly ideal conditions for growing industrial hemp, both elevation-wise and from a low humidity standpoint.
But that perception got tweaked on Wednesday when Hurricane, Utah-based Green Rock Hemp Holdings announced that one of its subsidiaries (GeneticsCubed) has been granted a patent for C2B, a hemp-based trace cannabinoid — Cannabichromene (CBC) — with a high potential for medicinal benefits.
GeneticsCubed reported over a year ago that it screened and selectively bred over one million hemp plants to be able to develop its C2B-branded CBC, a cannabinoid with up to 10 times the amount of Cannabichromene as found in other CBCs.
{NOTE: And in case you don’t know the cannabis space, that’s actually a REALLY BIG DEAL.}
Additionally, GeneticsCubed says that early research suggests that C2B has a high potential for treating acne, pain, and cancer by inhibiting inflammation.
A copy of the latest GeneticsCubed news release can be found here.
Other News Items of Note from This Week
What follows below are four additional Noteworthy News Items taken from the breaking news announcements that hit our radar recently from Utah’s business community, news items we thought you might find worthwhile if not also intriguing.
Case in point —
Phoenix PharmaLabs Takes Crowdfunding Path Again, Raising over $1 Million. Again.
Woods Cross, Utah-based Phoenix PharmaLabs announced this week that it has raised over $1 million, which normally is not a large enough capital raise to be noted within Deseret Business Watch.
Except Phoenix PharmaLabs used a Reg CF crowdfunding approach to raise the money. And … it’s the second time it’s done so within the past two years.
That’s why this announcement is newsworthy enough to be reported by Deseret Business Watch.
Additionally, Phoenix PharmaLabs has also landed $2.7 million in grant funding from the U.S. Army Medical Research and Material Command and close to $300,000 in a grant from the NIH/National Institute for Drug Abuse.
Sounds like a pretty interesting company.
Longview Capital Recapitalizes Traco Manufacturing
Sometimes companies choose to not share all the information surrounding a news announcement they publish, like the Xenter news outlined above.
That’s also the case with news this week that New Orleans, Louisiana-based Longview Capital has “recapitalized” Orem, Utah-based Traco Manufacturing.
How much money Longview spent on this recapitalization, I have no idea. But it sounds like it might be a big deal; I’m just not sure.
So … here’s a link to the news release. What do you think?
Overstock Government is the New Name for Overstock Subsidiary
By the way … readers may recall the news that Deseret Business Watch broke back in early March that Overstock.com had launched a new effort targeting government customers known as Overstock Pro.
Well, the company has formally branded this effort Overstock Government, and my sources tell me that Overstock Government is making great headway in pursuing and landing new government clients, both at the community and state levels.
So … if you work for a government entity of any size and you’re authorized to spend up to $10,000 in purchases using a purchasing card (aka, a P-Card), you should check out Overstock Government if you haven’t done so already — especially if you’re based in Utah.
I think you’ll be pleasantly surprised.
PayPal’s Venmo to Begin Acting like a Credit Card Company and Will Start Charging up to 1.9% for Business Transactions. Ugh!
Last of all, I know that neither PayPal or its subsidiary Venmo are based in Utah.
But the knuckleheads at Venmo announced this week that the company is gonna start charging up to 1.9% per business transaction.
Given the popularity of Venmo, especially among solopreneurs and small business (in Utah and throughout the country), I could not not include this news here.
To get a great summary on the details, I invite you to check-out this great write-up by Marketwatch.
BTW: Don’t be surprised to see a flock of small business owners flee Venmo over this announcement. And if I can find an alternative, that will include me.
* — As noted in prior write-ups about Xenter, although I have previously provided public relations, investor relations, and/or marketing services to Richard Linder and two of his startups, I do not do so today.
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About the Author
David Politis is a Marketing Mercenary, which is a fancy way of saying that organizations and individuals hire him to solve their marketing problems. To learn more, please feel free to visit David’s LinkedIn Profile or the website for his business: The David Politis Company. If you have a story idea for him (or would just like to connect), you can reach him at me@davidpolitis.com.