Riding a growth wave that began about four years ago and has accelerated during the pandemic, Lakewood company Within3, which enables life sciences companies to collaborate and communicate in a secure virtual environment, has closed a financing round at an eye-popping figure: more than $100 million.
The round was led by Insight Partners, a global venture capital and private equity firm headquartered in New York, with participation from Silversmith Capital Partners, a Boston-based growth equity firm with $1.1 billion of capital under management. Specific terms of the investment were not disclosed. Both firms are new investors in Within3, which is based in the INA Building in Lakewood, though most of its 130 employees work remotely, a strategy it has followed since before the pandemic. About 25 people work in the Lakewood office.
Within3 said in a news release that the funding "will be used to accelerate product innovation, build infrastructure to outpace growing demand, and fuel international expansion."
In a phone interview with Crain's, Lance Hill, the CEO of Within3, said demand for the company's products has soared as the life sciences industry has moved increasingly toward remote work — a trend that only has increased as a result of the COVID-19 pandemic. Hill wouldn't disclose specific revenue figures for Within3, but he said they were up 50% in 2019 from 2018, and are expected to be up 130% in 2020 from last year. He said Within3 is profitable but, again, did not disclose specific figures.
The company says all 20 of the world's largest pharmaceutical companies use Within3's platform for global collaboration in a variety of functions — publishing clinical studies, hosting advisory boards, facilitating communication on business and clinical initiatives that involve multiple stakeholders across different timezones and using different languages — that help bring drugs to market more quickly. Within3 has users in more than 150 countries.
"Our clients are global and we need to be global, too — and needed partners to help us scale," Hill said.
He said the new funding will enable Within3 to expand and make improvements to its product pipeline to meet growing market demand. The demand comes from life sciences companies taking part in research and collaborations in a variety of areas, including drugs aimed at COVID-19. Hill said there are about 80 COVID programs being worked on now by Within3 clients using the company's platform.
Hill also said the company will be able to add people to meet its growth needs. The 130-person workforce "is adding people every week," Hill said, with a particular focus on product design and sales and marketing.
The Within3 board decided in March — just as the pandemic was hitting hard in the United States — that the company should explore options in the capital markets, Hill said. (It had done so in 2012 when Within3 secured a round of equity financing, led by New York venture fund Easton Capital, that at the time brought its aggregate financing to $20 million.) With the board's direction in hand, Within3 then retained advisory firm Aeris Partners LLC to run a process that Hill described as having two goals: finding a partner or partners "with proven ability to help companies scale" and that had what he called "a good-guy factor" of being "collaborative and open and transparent" with portfolio companies. Ultimately, that led to Insight Partners as the lead investor, with additional backing from Silversmith. (Big law firm Willkie Farr & Gallagher served as legal advisers to Insight, and another giant, Kirkland & Ellis, represented Silversmith.)
Insight Partners, which has invested in more than 400 companies worldwide and has raised through a series of funds more than $30 billion in capital commitments, did not respond to a request for an interview.
In a statement, though, Deven Parekh, managing director of Insight Partners, said, "Investment opportunities in companies like Within3 don't come around very often. The company has seen explosive growth over the last 12 quarters and continues to break new records each month. Their unparalleled ability to enable companies to achieve the results they desire faster and cheaper, and scale across the enterprise solving complex problems in all divisions of an organization sets them apart from other virtual engagement solutions. At a time when collaboration, communication and cooperation is more critical than ever across the global life sciences ecosystem, we are excited to bring our strategic operations expertise to help Within3 scale."
Parekh and two other Insight Partners managing directors, Adam Berger and Ross Devor, will join the Within3 board.
The $100 million fundraise stands out as one of the largest investments into an Ohio tech company in recent years, according to data that JumpStart Inc., the Cleveland-based venture development organization, reviewed at Crain's request.
JumpStart said that according to Pitchbook, a financial database, there were more than 800 deals/fundraising rounds closed in the state of Ohio since January 2016. Of those, only eight were over $50 million.
"It's very unusual to raise $100 million in a single round in Ohio or even in the Midwest, but it's great news for our region and evidence that the Ohio innovation ecosystem is working," said Hardik Desai, JumpStart's senior partner, investing.
Hill said the investment means Within3 is "going to be a lot larger, that's for sure," within a year or two.
"We think there's an opportunity to be a truly vital company for the industry," he said.
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September 24, 2020 at 06:00PM
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Lakewood tech company Within3 raises more than $100 million in latest financing round - Crain's Cleveland Business
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