NZ-based VC invests in Cleveland Biosensors

Brisbane start-up Cleveland Biosensors has attracted investment capital from New Zealand-based VC BioPacific Ventures.

Neither party would disclose the amount of funding involved, but Cleveland CEO Brett Kettle described it as "a nice injection of funds" that would probably keep the company going until mid-2006.

"Our cash burn will continue to be high until April when we launch our first product," Kettle said.

Cleveland has developed BioFiniti, a hand-held testing device which will allow tests to be performed in the field for pathogens, algal toxins and will also be developed for herbicides and pesticides.

"Our primary focus is the water market," Kettle said. "We will also look at a number of partners to establish markets in other areas including food, vet and human diagnostics.

"Our technology cuts days of turnaround time down to 15 minutes. For users in time-critical situations, like water treatment plants, this can mean thousands of dollars in savings by being able to process water more efficiently and accurately. On-the-spot results also mean safer food and water." According to Kettle, Cleveland will select customers from a number of sites for the initial product launch in April.

"We will closely monitor the performance of BioFiniti and will fine-tune things like the software package," he said. "This will be a larger device, double the size of the PDA mobile phone sized hand-held product, which we plan to release in October, incorporating feedback from the first version.

"It is almost certain that we will have revenues from the middle of 2006. The company also has a plan to raise further capital but it is not yet signed and sealed," said Kettle.

BioPacific's second deal

BioPacific Ventures' investment in Cleveland is its second in two months, following its participation in the buy-out of New Zealand Pharmaceuticals.

The $100 million BioPacific Ventures Fund is a partnership between life science VC Inventages venture capital, New Zealand based VC Direct Capital, and NZ government research organisation AgResearch. It was set up earlier this year to invest exclusively in life sciences, with a focus on agbiotech prevention and nutrition.

Its largest investor is food giant Nestle, which has contributed an undisclosed sum. NZ agribusiness company Wrightson is the biggest local investor with NZ$14 million. Another major investor is the government-backed New Zealand Venture Investment fund, established with NZ$100 million in 2001 to invest in innovative Kiwi businesses.

"The investment is the first part only of a larger and longer-term investment we hope to make," said BioPacific Ventures' executive director Dr Andrew Kelly in a statement. "We are delighted to be backing yet another new technology from this part of the world to take it onto the global stage."

Cleveland Biosensors has also received capital from the federal government's Building IT Strengths, Biotechnology Innovation Fund and R&D Start programs, and from Queensland's ISUS and teQstart programs.