Nearly 15 years after its formation, Kanata-based research software firm Evidence Partners has secured its first round of venture capital.
Evidence Partners, which has established a strong presence in the pharmaceutical and medical device spaces, has raised $20 million CAD in growth financing. With the round, the company aims to build on the “uptick” in demand it has seen for its artificial intelligence (AI)-enabled platform during the pandemic. The startup said customers turned to Evidence Partners to navigate the flood of new COVID-19 research emerging on a daily basis as quickly as possible.
“After what’s happened in the last nine months in the market, a company that’s been bootstrapped and cashflow positive … that’s an attractive opportunity for any investor.”
The Canadian tech firm helps organizations streamline the medical research process with its literature review automation platform, DistillerSR. Evidence Partners currently serves over 300 research organizations, and claims to cater to more than 60 percent of the world’s largest pharma and medical device companies.
When the pandemic hit, academics, health agencies, and other organizations turned to Evidence Partners’ software to automate the traditionally manual labour-intensive literature review process amid a developing global health crisis.
But according to Evidence Partners co-founder and CEO Peter O’Blenis, the firm’s software has applications in “ just about any literature processing capacity,” within both its current customer base and new markets.
“We still see tremendous opportunity out there and we need scale to be able to address that market,” O’Blenis told BetaKit in an interview. “There’s a lot of greenfield out there in our existing markets … We’re barely scratching the surface, I would say, with some of those businesses.”
Evidence Partners’ all-equity round, which closed in mid-July, was led by San Francisco’s Thomvest Ventures with participation from Vancouver-based Pender Ventures and Export Development Canada.
The funding consisted of a combination of primary and secondary capital—the latter of which went solely to Evidence Partners founders. O’Blenis and Thomvest partner Andrew Pinkerton declined to disclose the exact breakdown of primary and secondary capital.
RELATED: Isaac Souweine leaves Real Ventures, joins Pender Ventures to support Vancouver firm’s expansion across Canada
Evidence Partners was founded in 2008 by O’Blenis, former CTO Ian Stefanison, and ex-chairman Jonathan Barker, who O’Blenis said both left the company last month of their own accord—Barker to retire and Stefanison to pursue other interests.
Back then, the trio was working at TrialStat, building software to manage clinical patient data during drug trials, when they discovered some of the company’s customers were struggling with the “complex and challenging” literature review process.
O’Blenis claims that Evidence Partners—which had been bootstrapped up to this point and benefitted from some federal government support—became profitable early on in 2009, and has grown every year since then, but declined to disclose further financial details.
Pinkerton, who is joining Evidence Partners’ board of directors as part of this round, noted that part of what attracted Thomvest to Evidence Partners was the company’s scrappiness and capital efficiency.
RELATED: Wisedocs closes $4.1 million to bring medical document analysis to “entire” insurance ecosystem
“Particularly after what’s happened in the last nine months in the market, a company that’s been bootstrapped and cashflow positive its entire existence but managed to grow fairly quickly every year—that’s an attractive opportunity for any investor,” said Pinkerton.
This “conservative” approach to spending capital has prevented Evidence Partners from needing to freeze hiring or make any layoffs during the market downturn, said O’Blenis, who added that he does not anticipate that any job cuts will be in the cards in the near future.
“It’s a little bit of a contrast to what you’re hearing with other companies [right now], and because of the history of running the company very efficiently, they haven’t gotten ahead of themselves like maybe some other companies, unfortunately, have,” Pinkerton added.
Initially, Evidence Partners was a small, self-funded business run by Barker and Stefanison while O’Blenis worked other jobs full-time. But in the 2010s, the market for the company’s software “grew exponentially.” O’Blenis attributed this growth to “the widespread adoption of literature review as a methodology, not just in academia and in research but as a regulatory process for getting drugs and medical devices approved and validated, and then to maintain that validation over time.” Following this growth, O’Blenis joined Evidence Partners as president in 2016, and became CEO in 2019.
RELATED: With the spotlight shining on Canadian tech, Kanata Ventures wants international startups to become part of the story
COVID-19 was also “an accelerant” for Evidence Partners. “The pandemic was interesting for us because we sell a tool that allows epidemiologists and medical research to happen faster and safer,” said O’Blenis.
The company’s offering automatically sorts through vast amounts of medical research files and aggregates the most relevant studies in a fraction of the time that it would take a person to do so manually.
Pender Ventures managing partner Maria Pacella, who is joining Evidence Partners’ board alongside Pinkerton, sees an over $1.2 billion serviceable market opportunity for Evidence Partners in the medical device, pharma, government agency, contract research organization (CRO), and academic spaces.
Pender Ventures was attracted to Evidence Partners’ “diversified, global, blue-chip” customer base.
“With the explosion of data from [the] increased amount of scientific papers being produced, the acceptance and broader adoption by the scientific community of new methods to do literature reviews [such as using AI], and the increased regulatory complexity and scrutiny – the market is primed for Evidence Partners’ product,” Pacella told BetaKit.
Pender Ventures was also attracted to Evidence Partners’ “diversified, global, blue-chip” customer base, which ranges from top medical device and pharma companies to CROs and government agencies across North America and Europe.
Evidence Partners plans to use the capital to support its global expansion efforts and grow its 80-person team by hiring for product, engineering, sales, marketing, and customer success roles.
From a sector standpoint, Evidence Partners’ “number one focus” for the time being is the medical device space. But O’Blenis described the firm’s software as “extremely configurable,” adding that he sees room to grow both inside its existing customer base and across new markets.
O’Blenis claims that there “isn’t a comparable product in the market,” acknowledging that while there are other solutions available, they typically serve only one vertical.
“We’re the market creator [and] we are currently the market leader,” said O’Blenis. “We want to emerge as the market leader at the end of this curve.”
Feature image from Evidence Partners.