Lateral Capital Management, llc

Acme Blood Analytics

Acme Blood Analytics (AAY) makes an automated blood analysis device about the size of a briefcase. Based on 10 years of development work, in-licensed from a large company, this technology can serve a huge potential market. Key fact: Only about 10% of the world’s population lives within 100 miles of an analytical laboratory with the capability to do the analyses for which this portable device is capable. We did not invest.

  • Assessment: We were concerned about the length of time and investment required to get FDA approval for a new cartridge-based system. Moreover, we feared that big blood analytics companies like Quest and LabCorp would align against a device which could replace many of the tests they now do offsite. In other words, we were concerned that a disruptive technology of this scale – replacing the need for a whole industry – was not the place for Early Stage capital.
  • Outcome: There have been many ups and downs for this company. For example, Chinese government officials saw a sheet describing the device on the desk of a well-known physician and quickly placed orders for the first machines – which the company could not deliver because they didn’t work consistently. Then, the “buyer” disappeared. There have also been multiple conflicts between management, investors, the licensor, etc. Most important: Like Theranos, they are still struggling to make the technology work.
  • Learning: We clearly dodged a bullet here. If it seems too good to be true, well, sometimes it is.