FORT COLLINS — Innosphere announced a three-tiered program Thursday afternoon to scale up its abilities, including building a $15 million Denver facility and $3 million Fort Collins expansion.
The incubator, which focuses on early-stage science and technology startups, held presentations in Denver and Fort Collins sharing its plans.
The Denver facility will be similar to the headquarters Innosphere has in Northern Colorado today, Innosphere CEO Mike Freeman told BizWest. Paid for with new market tax credits, the $15 million facility should be ready in about two years.
Innosphere has a presence in Denver, but Freeman said the group saw a need to grow in Colorado’s largest city.
“We’re focused on the science and tech area, and there is not a lot of support for those companies there,” Freeman said. “The city of Denver and other Denver partners have strongly encouraging us to do a project there.”
Freeman added that the project is still in its early stages and a location in Denver has not yet been selected.
In Fort Collins, an 8,000 square-foot wet lab building will be built adjacent to Innosphere’s 320 E. Vine Drive headquarters, on property it owns. As Innosphere doubles down on science and tech, that has included growing its life-sciences vertical, Freeman said. But in Fort Collins, there isn’t enough wet lab space — space where life-science companies can operate — at either Colorado State University or Innosphere for startups to lease. Hence, the $3 million expansion, with the funds from fundraising.
The scaleup program, as Innosphere is calling it, not only includes scaling up its presence on the Front Range, but also focusing on growing startups, companies that have $1 million in revenue, into scale-up companies, those with $10 million in revenue. Historically, Innosphere has focused on developing business plans for early-stage companies, and after about two years those companies graduate the program. Now, some companies will remain in the Innosphere program and continue to grow their revenue.
Of the 28 million businesses in America, only about 4 percent, or 1.2 million, make it to the startup phase, considered $1 million in revenue. That number pares down even more the 121,000 companies that make the scaleup phase, or $10 million in revenue. And only 17,000 companies in the United States are growth companies with revenue of $50 million or more.
Innosphere hopes to grow its share of startup and scaleup companies —and in turn, hopefully, growth companies — through its program. In 10 years, the incubator plans to add 351 companies to its portfolio, 66 of which will be scaleup companies. So far, 71 companies have graduated from Innosphere in its 19 years.
In addition to expanding its presence and the types of companies it has in its portfolio, the third part of Innosphere’s program is increasing access to capital. In addition to launching the Innosphere Fund and Israel-Colorado Innovation Network, Freeman said he wants to grow Colorado’s angel investor network.
Innosphere’s focus on growing science and technology startups in Colorado, especially along the Front Range, stems from research by Ross DeVol, of the Walton Family Foundation and the MIlken Institute, DeVol, who was a keynote speaker at Thursday’s events, shared that Colorado is in the top 10 for indices regarding research and development inputs, entrepreneurship infrastructure, human capital, tech and science workforce, tech concentration, and overall tech and science abilities.
But for Colorado’s large metros, technology sector growth is slowing. Boulder, for example, is No. 34 in the country in DeVol’s rankings, and is brought down because of its low tech-sector growth, even though it is ranked No. 4 for tech GDP concentration. Fort Collins is ranked No. 8 overall, but No. 123 for tech growth.
Freeman said that by expanding Innosphere’s capabilities — Innosphere is also expanding its presence in Denver South, Castle Rock and Estes Park, as well as helping to entice startup companies from out-of-state to relocate to Colorado — it will accelerate Colorado’s tech-sector growth.
“The big issue for Colorado is new companies create all net-new jobs, and science and technology jobs are the most coveted,” Freeman said. “We need to move the needle to help a bigger number of companies create new jobs. Innosphere helps companies more from launch to startup, and the net big barrier to a startup is to scale up. So what can we do collectively to move more startups to scale up?”
Freeman said it’s answer to that question, the scaleup program, consisting of its new facilities, increased capital and additional programming, will take place over the next two years.