Investing in Innovation with the ieCrowd IPO
Table of contents
The “sharing economy” has captured the attention of investors with companies like Uber commanding the second-highest valuation of any private company in the world next to Xiaomi. The idea that everyone collaborates, information is transparent, and we all work together to create value is a great concept that is extending to all aspects of disruptive innovation. One company wants to use the “collaborative economy” to commercialize innovation and is looking at an IPO to raise the capital needed to do so. Innovation Economy Corporation or ieCrowd has a unique business model which allows you to invest directly in innovation.
About ieCrowd
Founded in 2010, ieCrowd has taken in $13 million in funding so far and is looking to raise about 4X that amount in a planned IPO. At the end of 2014, the Company had incurred $4.9 million in expenses over the year and had 15 employees on the payroll. The business model is one in which ieCrowd identifies and then takes majority ownership of promising intellectual property in the academic world. When ieCrowd licenses or acquires a new innovation, it places it into a separate, newly formed, majority-owned and ieCrowd-operated subsidiary that benefits from the application of the ieCrowd parent company’s commercialization platform. This is how that entire process looks:
That “commercialization platform” is ieCrowd’s value proposition. It’s no secret that the academic community has a difficult time commercializing technologies that while they may be the “sacred cow” of the inventor, just don’t have any viable commercial application that can be monetized. We see this frequently with OTC companies that hang their entire company on that “one key patent” which will eventually allow investors to cash in. This strategy rarely works out. Led by experienced entrepreneurs, ieCrowd plans to actively identify technologies that look promising to commercialize and then use a common platform in which all members benefit from economies of scale, shared expertise, etc. Right now ieCrowd has three of these subsidiaries on their platform; Olfactor Laboratories, Inc. (“OLI”), Nano Engineered Applications, Inc. (“NEA”) and Smart Oxygen Solutions, Inc. (“SOS”).
Olfactor Laboratories, Inc. (“OLI”) seeks to commercialize a range of patent-pending technologies to control the behavior of mosquitoes and other blood-seeking insects with non-insecticidal agents. In August 2013 they raised over $550,000 in a very successful Indiegogo campaign that was only looking to raise $75,000. The Company has been in operation for 4 years and expects to begin selling and licensing their repellent under the brand name “Kite” in 2016. In order to sell their products in the USA, OLI will need EPA approval. They plan to begin the process in the first half 0f 2016 with results expected in 24-36 months. This year saw the team doing field tests in Kenya.
Nano Engineered Applications, Inc. (“NEA”) seeks to commercialize patented and patent-pending sensor technologies based on nanomaterials that can detect airborne gases to the parts-per-billion (PPB) level. They want to build a product platform which produces multiple consumer, commercial, industrial and security-related products. They expect to request regulatory approval for their products in the second half of 2016 which is expected to take 3-4 months and they also expect to begin selling some products themselves in 2016.
Smart Oxygen Solutions, Inc. (“SOS”) is now in its second year of operations and seeks to commercialize add-on oxygen delivery devices that would incorporate a computerized patient-adaptive dosing system, for people who have been prescribed supplemental oxygen delivery equipment by a doctor. The Company needs FDA approval before selling any products and is currently in the “pre-submission process” with no ETA of how long the approval process will take.
In addition to these three ventures, ieCrowd has also entered into agreements with the University of California, Los Angeles (UCLA) to secure licenses for two additional innovations in the area of head pain management and sleep disorders. They have also negotiated 6-month options to potentially license up to 20 different families of patents and patent applications.
Conclusion
The idea of a publicly traded VC firm is not a new one. The first company that comes to mind is Harris and Harris Group (TINY), the nanotechnology venture capital firm which has now changed their focus more towards healthcare applications. While TINY is invested in some very exciting disruptive technologies, the business model has provided returns for investors over time that have been nothing short of dismal. TINY’s business model is also lower risk since they transact at arm’s length as opposed to getting involved in driving their technology investments to commercialization. ieCrowd has a business model that’s fun to look at and sounds good on paper but executing on the plan and showing investors a superior rate of a return in the process is a very difficult task as any VC would attest. If the IPO is successful, ieCrowd will have an additional $18.8 million to fund their portfolio companies. The Company plans to trade on the NASDAQ Capital Market (“NASDAQ”) under the symbol “MYIE”.
Share
