Nicoya's $20 million Series A extension enables continued development of digital proteomics solution

Healthtech startup Nicoya Lifesciences has raised a healthy $20 million CAD Series A extension to assist in the continuing development and commercialization of its digital proteomics solution Alto, which helps scientists accelerate drug discovery.

Whitecap Venture Partners led the round, which included participation from Agilent Technologies, Export Development Canada, BDC Capital, MaRS IAF, Garage Capital, and others.

“Their technology is being used every day by scientists who develop life-saving drugs and make key findings about common diseases that affect our lives.”

The round closed at the end of November. The new financing will go towards the development and commercialization of Nicoya’s main product (Alto), as well as toward increasing the size of the startup’s staff.

Nicoya’s core technology is dubbed Alto (not to be confused with Atlas, the COVID-19 test it’s developing). The startup claims it is the world’s first surface plasmon resonance (SPR) instrument to integrate digital microfluidics (the science of manipulating and controlling fluids), artificial intelligence, and nanotechnology. The instrument can be used in biotechnology, life sciences and healthcare to measure molecular interactions.

Nicoya’s first product, which was launched in 2015, was the first benchtop instrument of its kind for measuring drug candidates at a molecular level. Its other product, OpenSPR-XT, launched in 2016, is a fully automated molecular analysis instrument based on Nicoya’s OpenSPR instrument.

Ryan Denomme, the co-founder and CEO of Nicoya, told BetaKit the startup decided on a Series A extension because Nicoya didn’t want to have to go out and find a new set of investors at this stage. Denomme called fundraising a lengthy process that takes a lot of time and work, and said the extension round would allow Nicoya to remain “hyper-focused” on growing the startup. The Series A and Series A extension added up to $30 million CAD in funding for Nicyoa.

“Being able to get the resources you need to execute on the plan is the object,” he said. “It really sets us up well for the next stage of growth in business after that.”

Whitecap led Nicoya’s Series A round in addition to the extension. Denomme noted he’s worked with the VC firm closely for the last couple of years.

“They have seen the progress we’ve made and the potential that exists for the business,” Denomme said. “They’ve had a lot of opportunities to see what we can do and are really happy with where we’re going. They see a lot of potential so they want to continue to invest and support the company.”

Russell Samuels, a partner at Whitecap, said Nicoya is building “disruptive” tools for disease and drug discovery research. “Their technology is being used every day by scientists who develop life-saving drugs and make key findings about common diseases that affect our lives,” he said.

Nicoya’s products are used in some 50 countries, globally, but Denomme said the United States represents a large market for Nicoya, so having a presence there is important to the startup. Over the next 12 months, Nicoya is looking to add another 30 to 40 positions, ranging from product development to marketing, sales, and customer support.

The lab instruments that Nicoya manufactures measure the interactions between molecules in real-time. The implications of such technology are important when it comes to fighting diseases, such as COVID-19, according to Denomme.

The COVID-19 virus has spike proteins on its surface that binds to a cell receptor known as the ACE2. The interaction of those two molecules is what allows the virus to enter cells and replicate, Denomme said.

“So it’s a really critical tool for scientists to not only understand the most basic fundamentals of how these diseases are progressing, but then allows them to design and test and develop drugs that are effective in treating these diseases,” he said.

Denomme noted that a number of the startup’s customers are using its instruments to study COVID-19, and that their lab instruments have also been cited in several academic publications.

Nicoya began as a spinoff from the University of Waterloo in 2012. In 2015, the startup received $50,000 at Communitech’s Rev Centre Stage pitch event for its Surface Plasmon Resonance solution that does protein testing.

The startup raised $2 million in 2018 to continue development of its protein testing technology followed by another $2.57 million investment from FedDev Ontario, to scale its operations and accelerate its growth into new markets.

It launched its SPR instrument in 2020 after raising the original $10 million in Series A funding. The National Research Council of Canada Industrial Research Assistance Program has also provided funding to Nicoya to allow the startup to work on its Atlas test for COVID-19. As well, in May the federal government announced $2 million in funding for Nicoya for its Atlas product.

The startup claims that over 500 of the world’s leading researchers use its solutions, and it plans continued expansion in the academic, government, biotechnology, and pharmaceutical sectors.