With Uber Investor Driving, Cue Raises $7.5M for Personal Dx Device
The VC who placed a $26.5 million bet on Uber in 2011 is now leading a $7.5 million investment round in Cue, a San Diego startup developing a wireless diagnostic device that enables consumers to run clinical lab tests at home to measure their own health.
In a statement from Cue yesterday, Sherpa Ventures managing director Shervin Pishevar said the five-year-old company is taking a unique approach to consumer health, and “is a prime example of the ‘on demand’ economy applied to health and wellness.”
Pishevar, who left Menlo Ventures to found San Francisco-based SherpaVentures in 2013 (with former Goldman Sachs Internet investor Scott Stanford), has gained visibility in recent years as a well-connected Silicon Valley VC with an inside track in consumer and social Web deals. In addition to Uber, the Iranian-born Pishevar put Menlo into Fab.com, Warby Parker, and Tumblr, and was an angel investor in TaskRabbit, Klout, and dozens more. A recent profile in Bloomberg Businessweek describes how Pishevar’s extensive network connects to such tech billionaires as Elon Musk, Hollywood power brokers like Jeffrey Katzenberg, and political strategists in the White House and elsewhere.
Presumably, Pishevar was responsible for getting some angel investors into the deal, which The Wall Street Journal identified as Hollywood star Leonardo DiCaprio, Salesforce.com chief executive Marc Benioff, and former Obama campaign manager Jim Messina.
The company, which has 11 employees, also disclosed that Immortalana, a mini-fund founded by digital media executive Kelly Day and UCLA medical researchers Robin Farias-Eisner and Srinivas Reddy, also participated in the round as an angel investor. (Cue previously raised about $2 million from angel investors.) Farias-Eisner, a specialist in gynecologic cancer who serves as director of UCLA’s Center for Biomarker Discovery and Research, was named to Cue’s board of directors, along with Pishevar.
Yet Pishevar obviously was a key selling point for Cue founder and CEO Ayub Khattak, who told me by phone, “We were really happy to connect with him, because his record speaks for itself. We chose him—and he chose us on this technology that completely transforms how people get information about their health.”
Cue has developed a small diagnostic device that enables people to measure five key health indicators. A consumer puts a blood, saliva, or mucus sample on one of five specialized cartridges and inserts it into the device, which analyzes the sample and uses a Bluetooth connection to send the findings (and related background information) to the user’s smartphone.
The technology within the 3-inch by 3-inch by 3-inch cube is an antibody-based detection system called ELISA that has been used in clinical labs for decades.
“We took a standard lab technique and compressed it, and automated it, and made it a robust platform that enables consumers to measure their own health,” Khattak said. The innovation is in the miniaturization, micro-fluidics, and in automating the assay technology in a way that eliminates the need for a laboratory technician. So anybody can do it.
The technology has not yet passed muster with the FDA. On its website, Cue says it currently has an investigational device exemption from the FDA that enables customers who pre-order the device to participate in a usability study intended to serve “as an important part of Cue’s path to FDA approval.”
Following a razors and razor blades business model, Cue plans to introduce its diagnostic cube next year with single-use cartridges that measure five conditions:
—Inflammation. By tracking C-reactive protein, a biomarker for inflammation, Cue says consumers can optimize their workouts, recovery, and heart health with data that is paired with recommendations for a healthy diet and lifestyle.
—Vitamin D. By monitoring the “sunshine vitamin,” which is actually a hormone produced by the body in response to sunlight, Cue offers smart recommendations for time in the sun to elevate mood, strengthen bones, and improve overall health.
—Fertility. Cue enables users to optimize their chances for getting pregnant by tracking Luteinizing Hormone (LH) levels. Cue also can provide alerts when LH is peaking and related information about appropriate foods to support fertility.
—Influenza. The company emphasizes Cue’s capability for early detection of flu viruses, with accompanying information that prompts users to see their doctor for appropriate treatment.
—Testosterone. By measuring testosterone, a hormone that builds muscle mass, strength, bone health, and fuels sex drive, Cue can show users how certain strength and conditioning exercises can boost natural testosterone levels and provide dietary recommendations to improve performance.
Cue obviously can expand its line of diagnostic cartridges to add new capabilities. One clue to where the company is headed is the new board member Farinas-Eisner, whose work at UCLA is dedicated to identifying biomarkers for the prevention and early detection of women’s cancers. So it seems likely Cue would have plans for a cartridge that could be used periodically to test for certain breast cancers, and perhaps other types of cancers.
The product was designed in the United States with a simplicity that hints of an Apple design aesthetic, and will be manufactured in China, Khattak said. The company plans to use its $7.5 million in Series A funding to begin production, and to help scale production by focusing on automating the manufacturing process.
Cue said in May that its product could be ordered in advance, with pre-order pricing initially set at $149 and increasing to $199 for the first 1,000 units ordered. The retail price will be $300 when the product is officially released next year, Cue says. Additional cartridges and other accessories would be sold through Cue’s online store, at www.cue.me, with shipping scheduled to begin in Spring 2015.