A medical device for patients with swallowing disorders gets new life. A music streaming app gets an influx of cash. The state’s economic development agency faces more criticism for its practices. Startups in recruiting tech, medtech, and civic tech strike merger and acquisition deals. Read on for more details about these stories and other recent Wisconsin innovation news.
—In an unusually structured deal, the Idea Fund of La Crosse, an early-stage investment firm located in western Wisconsin, said it paid $500,000 to acquire the rights to the SwallowStrong device developed by Madison-based Swallow Solutions. The device, designed to help patients with dysphagia strengthen their mouth and throat muscles, will now be marketed by La Crosse-based Swallow Therapeutics, a new portfolio company created by Idea Fund, according to a press release. Idea Fund is searching for a CEO to run the venture.
Swallow Solutions stopped making the device in 2017 because it was struggling to win insurance reimbursement from the Centers for Medicare & Medicaid Services, former CEO Eric Horler told BizTimes Media. That year, the company began selling a thickened beverage designed for people with swallowing disorders. But that business apparently didn’t take off: Horler told BizTimes that Swallow Solutions has no employees, and a third party is trying to also sell the beverage assets. Horler left the company last year and is now CEO of AIQ Solutions, according to his LinkedIn profile.
—LÜM, a Madison-based developer of a music discovery and streaming platform, said it closed a seed funding round and struck a strategic partnership with Frank Productions, a locally based company that promotes concerts nationwide. LÜM raised $750,000 in equity financing in the seed round, and it has also raised nearly $500,000 in convertible debt funding, a spokesperson told Xconomy. Frank Productions is one of its investors, he said.
Read more about LÜM in this Xconomy profile from January.
—Montage, a Delafield-based provider of video interviewing software and other technologies for recruiters and hiring managers, merged with Shaker International, an Ohio-based developer of technologies for assessing job candidates. The merger was facilitated and financed by The Riverside Company, a private equity firm that invested in Shaker in 2017.
The combined company will have dual headquarters in Cleveland and Delafield, and all employees and offices are being retained, according to a press release. Montage chief executive Kurt Heikkinen will lead the merged firm, and Shaker CEO Brian Stern will serve as president.
—Medical device giant Medtronic (NYSE: MDT) inked an agreement to acquire Titan Spine, a Mequon-based company that develops and sells implants for spinal fusion surgeries that feature a nanotextured surface intended to facilitate more effective fusion with bones. The purchase price wasn’t disclosed.
—Polco, a Middleton-based startup developing software to help local governments and other organizations solicit public input on policies and other issues, acquired Colorado-based survey research firm National Research Center (NRC) for an undisclosed price. Polco recently raised $2 million in equity funding and received a $2 million loan, the Wisconsin State Journal reported.
—The Wisconsin Economic Development Corporation (WEDC) faced renewed criticisms of its accounting practices after a review by the Legislative Audit Bureau. Among the issues raised: WEDC gave $462,000 in tax credits to Walgreens through a deal designed to reward job creation—but Walgreens actually lost 17 jobs, the Associated Press reported. WEDC also awarded Madison-based medical diagnostics firm Exact Sciences (NASDAQ: EXAS) $61,000 in tax credits for 261 jobs created outside of Wisconsin, according to the AP.
After the report came out, Exact said it would return the $61,000, which represented 6 percent of its $1 million in state tax credits awarded in 2017, the AP reported. Exact also created 795 jobs in the state.
WEDC chief executive Mark Hogan told the Milwaukee Journal Sentinel he supports continuing the policy that allows companies to receive credits even for certain jobs created outside the Badger State. He also said his agency will try to recover the credits awarded to Walgreens.
—Speaking of jobs, a new report from an Atlanta-based consulting firm found strong growth in high-tech and other skilled employment in the Madison region between 2006 and 2017. During that time, local healthcare jobs increased 18 percent to 68,545 workers; tech jobs jumped 105 percent to 25,060; and bioscience jobs rose 25 percent to 12,245, according to a Wisconsin State Journal article. The region lost jobs in advanced manufacturing and agriculture.