Startups move UC discoveries to market

By Andy Evangelista

When UC Davis computer science professor Raju Pandey and his graduate students brainstormed six years ago about developing wireless sensor networks, he never imagined riding the green technology wave.

Today, Pandey is co-founder and chief technology officer of a promising UC Davis startup company that helps electricity-gobbling data centers slash their energy usage. This is a hot issue for companies that house servers and computer equipment that must constantly be cooled.

Energy consumption of U.S. servers and data centers has doubled in the past five years, increasing greenhouse gas emissions and raising concerns about power grid reliability. And their electricity bill could soar to $7.4 billion a year by 2011, according to the Environmental Protection Agency, which urges new practices and technologies to make these centers more energy efficient.

SynapSense has helped some of its customers, which include Fortune 500 companies and public agencies, cut their energy use by up to 30 percent, save hundreds of thousands of dollars a year and shrink their carbon footprint significantly.

The company, based in the Sacramento suburb of Folsom, is one of nearly 180 startups founded on UC inventions and technologies in the past four years. According to the 2009 UC Technology Transfer Annual Report, UC inventions last year spurred 47 new startup companies — a notable number considering the economic recession and reluctance of investors to back technologies or products that are only in their infant development. UCLA accounted for 22 of the 47 UC startups launched last year. 

Innovation leader

UC campuses, year after year, increase their portfolio of inventions and patents and start dozens of companies that move discoveries from the laboratory to the marketplace. This technology transfer is a measure of the quality and impact of UC research, said Steven Beckwith, UC vice president for research and graduate studies, when he presented the Accountability Sub-Report on the UC Research Enterprise to the regents in January.

Spinoff or startup companies are indeed a UC tradition. Since 1976, 461 startup companies have been formed with UC inventions, and they have played an important role in California’s economy. The companies range from the UCSF-rooted biotechnology giant Genentech and UC Berkeley-born Amyris, which first engineered microbes to produce anti-malarial drugs and now is creating renewable fuels to energy startups like Pandey’s SynapSense.

“Over the past three decades, startups based on UC innovations have helped create and grow California into a global biotech leader,” said William Tucker, executive director on Innovation Alliances and Services at the UC Office of the President. “In the future, startup companies founded on UC inventions may create and grow industry-leading clusters in fields such as clean energy and nanotechnology.”

Technology transfer offices at the UC campuses work to make it easier for companies to license inventions and for their own researchers to form spinoffs based on their ideas.

On June 11, the UC Office of the President’s innovations group has planned a workshop in Oakland to focus on startup funding. Technology transfer leaders from UC, other universities and private industry will discuss the challenges of obtaining funding for new technologies and of creating incubator space to nurture UC-based startups.

“Most researchers like to see the benefit that comes from their work,” said Tucker. “And some end up guiding the research past its birth stage and playing and active role in getting a product out to the public.”

That was the case with UC Davis’ Pandey. “We were basically looking to build a robust wireless sensor system,” he said. “We were conducting the science and building knowledge — that’s what academia is about — and not really looking at a specific application.”

Real-world application

Pandey and his graduate students developed a system architecture in 2005 that was promising enough for UC Davis to apply for a patent. He forgot about the patent until InnovationAccess, the UC Davis program that helps bring campus research discoveries to the market, contacted him. InnovationAccess eventually connected him with a venture capital firm, which hooked him up with Peter Van Deventer, who recently had left Intel Corp. in Folsom and was looking to start his own company.

Together, they formed SynapSense in 2006. Pandey and his research staff, including three of his graduate students, continued to develop their wireless sensor system, which the company eventually targeted for data centers. The company’s sensors monitor temperatures at data centers, allowing cooling systems to be turned down when they are not needed.

The rest is a short history of success. SynapSense recently was honored as part of the Global Clean Tech 100 and BusinessWeek named it a leading startup that readers should follow. The U.S. Department of Energy recognized the company for its innovative approach to saving energy in data centers.

“When we started all of this, we never thought we’d be in the energy efficiency field,” said Pandey, who is on leave from UC Davis but will trade back his entrepreneur hat for the academic one and eventually return to university research and teaching. 

Some two-dozen UC Davis startups have formed in the past five years, more than in all previous years combined, said David McGee, executive director of UC Davis InnovationAccess. These startups range from companies developing medical diagnostics and drugs to treat disease to those making microelectronics and alternative energy products. 

Hatching companies

Some UC campuses are housing fledgling firms so that they may mature into viable companies. The California Institute of Quantitative Biosciences, a consortium of UC Berkeley, UC Santa Cruz and UCSF labs known as QB3, launched an incubator network last summer with five startup companies.

The network, in partnership with the city of San Francisco and FibroGen Inc., builds on efforts at QB3 to support life science entrepreneurs. It complements the institute’s other technology incubator, the QB3 Garage, which rents small amounts of space to up to six startups. Members of the startups use the research facilities, the UCSF library system and weekly seminars. The companies also use the QB3 Innovation Toolkit, which provides legal, management and investment expertise that is critical to startups. The Garage, created in 2003, has helped launch more than 20 startup bioscience companies on the UCSF Mission Bay campus and the surrounding neighborhood.

Hoping to duplicate that success, UC Berkeley opened a QB3 Garage in early May. Its first tenant is recent Ph.D. graduate Wesley Chang whose company, Aperys, is developing specialized cell culture platforms that allow researchers to grow nerve cells in patterns to simplify experiments.

UCLA opened its on-campus incubator last year at the California NanoSystems Institute, which houses 10 startups that use UCLA research.

“Our incubator provides a platform and resources for new startups to move the UCLA technology through the key proof of concept that will attract outside venture capital funding and company interest,” said Kathryn Atchison, vice provost of Intellectual Property and Industry Relations.

The facility also brings together faculty and graduate students from the schools of engineering, physical and life sciences, management, medicine and law so that they may share their expertise. Inventive engineers, for example, can be matched with business and management experts who can market a promising product.

“Graduate students and postdocs are particularly interested in learning about commercialization and getting involved in taking technology they worked on out to the real world,” Atchison said.

The incubator is among a string of UCLA accomplishments over the last five years that have boosted a culture of entrepreneurship. And the campus’ number of startups — 22 in 2009 alone and a total of 67 in the past five years — also is proof.

“We began with a philosophy to develop a faculty and student-friendly tech transfer office that would focus on getting as many deals done with companies as possible — with a concentration on fair market value, rather than the most money we could create,” Atchison said. “The reason is that the technology is typically in an early stage and we want it to have a chance of being commercialized. Even if a startup company fails, and we hope that it doesn’t, the technology will have been advanced through the process, the faculty member will usually have learned something new about developing the technology, and these questions generally drive the research forward.”

is the research coordinator for the UC Office of the President Integrated Communications.