Tech Connect Spring 2020 by TechConnect

THE

RISK CAPITAL ISSUE

05 Finding Funds 08 Above the Rest 012 High Marks

CONTENTS SPRING 2020

PUBLISHERS Sandra Watson Steven G. Zylstra

EDITOR

Don Rodriguez

EXECUTIVE EDITORIAL DIRECTOR Susan E. Marie

ART DIRECTOR Erin Suwwan Lucky You! Creative

www.luckyyoucreative.com

DESIGNER

Jaclyn Threadgill

CONTRIBUTING WRITERS Kerry Bennett Monique Clement Eric Smith Jessica Swarner Steve Yozwiak

E-MAIL techconnect@aztechcouncil.org For queries or customer service call 602-343-8324 TechConnect is published by the Arizona Technology Council, 2800 N. Central Ave. #1530, Phoenix, AZ 85004.

Entire contents copyright 2020, Arizona Technology Council. Reproduction in whole or in part without permission is prohibited. Products named in these page pages are trade names or trademarks of their respective companies. Publication of TechConnect is supported by the Arizona Commerce Authority.

+ Risk Capital

FINDING FUNDS

Risks come with the territory when investors back companiesâ&#x20AC;&#x2122; quest to reach the gold 008

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Capital can make a key difference in reaching a pinnacle.

HIGH MARKS

Tucson and Phoenix make the grade with STEM opportunities.

Also Inside

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The University of Arizona Northern Arizona University Arizona State University TGen SPRING 2020 TECH CONNECT

Publisher’s Letter

Risky Business e’ve all experienced the dilemma of want vs. need. “I want a doll/bike/video game.” You likely learned the difference years before you taught it to your own child. “You don’t need it. You want it.” It’s a hard lesson to live through whether you’re delivering or receiving it. For many Arizona technology companies going through the funding challenges that arise in startup and early stage, the earlier life lesson doesn’t fit. They really mean both. “I want more money to make this work in the long haul. I need more money.” The answer for a select number of these companies has come in the form of risk capital. This is money from investors who speculate that channeling funds at specific stages in a life cycle can bring rewarding results for both sides in the relationship. That is, the company continues moving toward success while investors get their money back and then some. There was a time when securing risk capital was an elusive desire of many technology firms in Arizona. They knew they wanted it. They along with observers like me knew they needed it. Fortunately, the needle is moving in the right direction. According to the recent MoneyTree™ Report published by PricewaterhouseCoopers and CB Insights, there were 46 capital investment deals worth $308 million made in Arizona in 2019. While that sounds good, consider that 12 deals valued only at $23 million were reported for the fourth quarter last year. That’s far less than what should have been an average $77 million per quarter for the year.

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STEVEN G. ZYLSTRA

By comparison, neighboring California reported more than $58.1 billion worth of capital in 2,311 investment deals for the entire year. For the fourth quarter alone, there were 525 deals valued at more than $11.6 billion. There obviously is more work to be done in the risk capital arena. To help the cause, I’m glad to say the new invisionAZ Fund has been launched to provide venture capital for Arizonabased technology startups. Pinnacle West Capital, the parent of utility Arizona Public Service, is providing $25 million as the seed investment. The target for the fund is to at least double that amount. (For more details, go to http://invisionaz.org/.) I’m also proud that this issue of TechConnect offers an introduction to some of the players in Arizona’s risk capital scene— both the investors and representatives of companies who cite this type of funding as critical to their success. I need to also alert you to a change for TechConnect. Beginning with this issue—our 60th—we will be shifting our platform to a blog format that will publish on an ongoing basis. We still will offer themed stories like those on risk capital that you’ll find inside but we also will include a mix of topics as they arise. You’ll find us at https://www.aztechcouncil.org/techconnect/. We want to continue serving as Arizona’s source for news in the technology and science communities. Together, we can make that happen.

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FUNDING FINDS Investors look past the risks to offer range of options that support growth

enture capital. It’s a phrase that can conjure images of celebrations marking paydays for innovators and payoffs for investors. The golden egg, if you will. For the parties involved, they also are keenly aware of the more accurate term for what’s at the heart of their relationships: risk capital. There are no guarantees that funding will move a company ahead in its lifecycle or that those with the deep pockets will ever see a penny in return. The successes, however, can make taking a chance worthwhile, especially in the technology community. And in recent years, the action no longer is limited to California, New York or Massachusetts as more of the money is making its way through Arizona. No matter where the risk capitalists may appear in the funnel—angel investors to early-stage funds and even to private equity firms—they are seeing projects here that make them want to keep some of their smart money close to home. The fact that startups can even be considered by angel investors here says a lot. Just like the name implies, funding from these groups and individuals is heaven-sent, especially since it comes in the startup phrase. What has helped is lawmakers’ here supporting the Angel Investment Tax Credit to provide credits to investors who make capital investments in businesses certified by the Arizona Commerce Authority.

For an angel investment group like Arizona Tech Investors (ATI), it’s helping ensure that 65 companies—about three-fourths in Arizona— fall into their special areas of focus. Jim Goulka, the chairman and managing director, says those startups are in information technology such as software, hardware and Internet of Things; life sciences, which include medical devices, diagnostics and some types of therapies; and what his groups calls capital-efficient green tech. That is, for example, “we don’t invest in wind farms but we would invest in the controllers of the wind farms,” he says. With 94 men and women investing their own personal funds through ATI, there needs to be some specificity in their targets. “The three categories of new technologies can substantially change the world very rapidly,” Goulka says. The companies also need to show they have the potential of bringing in revenue despite their ideas being new, their leadership never having started a business, not having made any sales or even building the first SPRING 2020 TECH CONNECT

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product. “There is a tremendous amount of risk,” he says. “And in order to absorb that risk, you have to try to get very good returns, which only come from very rapid growth.” How fast? “Our companies in the first year may do a hundred thousand dollars in sales, in the second year a million dollars in sales, in the third year 10 million dollars in sales,” he says. “Very rapid growth.” Of course, the objective is to keep the companies more than just alive so angel investors can experience returns. Investors become cheerleaders of sorts to encourage the new companies to keep thriving and keep the trajectory toward maturity going to reach the next level. That still means having ready access to more cash to support further growth. This can be the signal for early-stage funds such as Canal Partners to enter the picture. Managing Partner Todd Belfer says they invest in companies that have at least $1 million but no more than $4 million in revenue. “We think by investing in companies that have at least a million (dollars in) revenue, we have taken some of the risk out of our risk profile for prevention capital because they have customers, a product management team and have done some of the heavy lifting before we invest.” Specifically, Canal Partners does Series A rounds, which are considered the first risk capital funding for a startup, and Series C rounds, which are designed to make the startup appealing for acquisition or to support a public offering. “We’re sort of right past pre-revenue,” Belfer says. An obvious question is how do investors go beyond gut instinct to determine where to put their money. In the cases of Goulka and Belfer, both bring past experience as successful entrepreneurs who learned what worked—and what didn’t—when it came to business operations.

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While both know there’s no guarantee that everything they touch will turn to gold, they can make the reality checks that can help. A view from the trenches also helps when investors commit money as individuals, as well as for larger groups. Take for example Todd Yarter, principal and managing partner of The Yarland Group. Getting his start with an energy drink company started with his family before selling it, Yarter eventually launched the firm Desert Sky Ventures. His partner was Chris Davey, whom he originally teamed with to raise capital for a power plant project for Davey’s company EnviroMission. With startups ranging from aerospace to cloud computing to cybersecurity, Desert Sky Ventures would identify companies that weren’t quite profitable and offer strategic assistance needed for expansion. Along the way he began building relationships with private equity firms that would invest in the new companies through Desert Sky. That led to a call from Jeff Frient, one of the founding partners of The Edgewater Funds in Chicago. “Hey, Todd, why don’t you get out of the little kiddie pool and come up to the big boy league?” was the question that led to Yarter taking on a new role. Frient knew Arizona’s potential after his earlier training as a fighter pilot at Luke Air Force Base. With not much involvement by Edgewater in projects west of the Mississippi, Frient wanted Yarter’s help to change that. Yarter wound down his activities with Desert Sky and now works as an independent contractor for Edgewater to put $200 million to $300 million to work in the state of Arizona. He said the goal is to have two to three later-stage companies in the fold going into 2021 by building the right relationships this year. Along the way, he’s experienced the spectrum of what the venture capital field can offer. “I kind of jumped

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from being an entrepreneur, a small investhing because this is about truly picking winners tor doing venture capital and now doing the and we’re not always right on that.” larger side of the private equity with Edgewater This all contributes to Arizona developing Capital Fund,” Yarter says. its A game. That doesn’t always mean only He should have some options to consider. bringing dollars to the table. The creation of Belfer says, “We feel like the ecosystem here new partnerships can be part of the package is growing, and we have a strong network here that risk capitalists can offer because they are and we’ve had a lot of established. For example, success.” A lot of that the new company may comes from living here, need to complete the he says, citing Arizona puzzle of thriving in State University as a the marketplace by source for graduates building a relationship starting business. with another company While the state has that is a player in an not been known widely industry that could be for its risk capital or complementary. Fund high-tech startups as has representatives “might happened in places like say, ‘Hey, I cannot only Silicon Valley or Boston, write you a check but I Belfer says, the tide is can also bring Joe to the turning. He estimates table,’” Yarter says. half the venture capitalHe credits organiists in the country have zations with a strong - TODD BELFER, CANAL PARTNERS somebody who covers Arizona presence MANAGING PARTNER Arizona, whether that’s like Greater Phoenix at least visiting once a Economic Council month or making phone calls to make connec(GPEC), Coplex and Silicon Valley Bank for tions. Yarter says the state is “starting to really starting to draw some positive recognition. Add make a splash on the outside—from Silicon to that the leadership of people such as Chris Valley to Austin, Texas, to Salt Lake City.” Camacho, president and CEO of GPEC, and On the flip side, risk capitalists here also look Ryan Smeets, vice president of business develbeyond Arizona when committing funds. For opment for BIG YAM, who are bringing value to examples, Canal Partners has invested in comArizona for entrepreneurs and future growth. panies in Atlanta, Denver and San Diego. And In short, risk capital is one of those things that’s not a bad thing. “We think that’s good for that takes a village to work. “If we can get the companies because if you’re the founder of a angel investors, venture capital investors, and company, you need to know that you’re basically private equity investors to all work together and competing for business and capital with great provide feedback and value to the community companies that are not simply located here,” as a whole,” Yarter says, “the more successful we Goulka says. “It raises the bar and that’s a good will all be.”

“We feel like the ecosystem here is growing, and we have a strong network here and we’ve had a lot of success.”

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ABOVE THE REST Risk capital can be critical to boosting trajectories of successful companies

hen gathering funds needed to help keep a business up and running, it’s natural for entrepreneurs to dig deep into their own pockets. They might even turn to family and friends. Bootstrapping, after all, is a sign of that independent spirit. But when working on that next big thing, you have to think big when securing funding sources. That’s especially true when that product or service involves technology. “It can be pretty expensive to build a true enterprise platform with broad functionality and fully baked security model that can be easily configured by customers,” says Gregg Scoresby, founder and CEO of CampusLogic. More than 500 schools in the nation offer students access to CampusLogic’s Student Financial Success platform, which incorporates a net price calculator, simplified financial aid verification, scholarship management, tuition

TECH CONNECT SPRING 2020

and scholarship crowdfunding, personalized digital communications and 24x7 multilingual virtual advising. In turn, the schools report experiencing increased enrollment, better informed borrowing and improved retention. “As we started to acquire early customers, I quickly realized that we had a big market opportunity in front of us. I didn’t want a lack of capital to be the reason that we didn’t capture that opportunity,” Scoresby recalls. “It became clear very early in our existence that we would need to raise capital to build out a robust platform while trying to grow rapidly at the same time.” For the ideas that lead to success, speed indeed is the name of the game. “Our management team spent a couple months looking at our data for possible places that if we put money to work that we could grow even faster,” says Daniel Graff-Redford, CEO of Allbound. Allbound’s partner relationship management

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tool helps companies of all sizes and budgets build successful partner programs in one outof-the-box platform. Its next generation partner Software as a Service technology provides solutions for partner enablement, communications and pipeline management. Having a good idea is not enough. It’s having the funding sources needed to cover the costs of getting from Point A to Point B and beyond before the competition catches up. CampusLogic and Allbound are two examples of companies that turned to risk capital to help meet their missions. For Allbound, funding originated close to home from Canal Partners and Arizona Founders Fund, as well as from out-of-state firms such as Alerion Ventures of South Carolina and BLH Venture Partners of Georgia. For Campus Logic, Arizona Tech Investors and Desert Angels were among the many angel investment groups providing support in different forms. “The right angel investors can provide both capital and advice,” Scoresby says. “I was certainly the beneficiary of that.” For example, Matt Pittinsky, CEO of Scottsdalebased Parchment, was an early investor who offered a lot of relevant advice based on his EdTech experience, while Clate Mask, co-founder and CEO of Keap, was another early investor who became a mentor. Both also serve on the CampusLogic board. Campus Logic leadership directed the money primarily into product development along with sales and marketing. As a result, the company has launched a new product every year since launching five years ago while nearly doubling sales and marketing team every year, Scoresby says. At Allbound, the capital was put to work by opening a research and development center in India, resulting in an improved customer experience by building more software. Money was also invested in the marketing team to expand opportunities to talk with prospects. Sales support also was added to handle growth among Western European customers and prospects, as well as day-to-day management was bolstered

for a thriving channel. “By going deeper on all of those areas, we saw an ability to accelerate our success,” Graff-Redford says. He carries previous experience on the power of risk capital. For example, GraffRedford most recently was chief strategy and product officer for a company backed by Veritas Capital, a leading private equity firm focused on companies that provide technology-based and other products and services to government and government-influenced markets and services. Add to that the support he has received from board members Scott Salkin, founder of the company, and Jim Armstrong, managing partner of Canal Partners and founder of JDA Software. Along the way in his career, Graff-Redford received what he considers some of the best advice from Jason Green, venture capitalist at Emergence Capital. “Think about venture capital like rocket fuel. If you’re not building a rocket, something that can grow really fast, you would be making a mistake to get rocket fuel,” he says. “Venture capital is a way to accelerate your growth.” Scoresby’s advice for others seeking funds also is a bit airborne. “Starting a company has been likened to jumping off a cliff while trying to build a plane and learn to fly it on the way down. Capital allowed us to buy the airplane parts, learn to assemble it and figure out how to fly it,” he says. “Without capital, starting a highgrowth enterprise software company can feel a little bit like just jumping off a cliff.” Preparation before seeking capital also can help prevent a crash landing. “I think early investors want to fund founders who have clarity around what I call the three Ms: mission, model and metrics,” Scoresby says. “Founders need a compelling mission, some big problem in the world that needs to be solved. They also need a business model, including a rational go-to-market strategy, customer acquisition model, pricing structure, value proposition, etc. And lastly, they need to be able speak with clarity about the key metrics or success criteria in their business.” SPRING 2020 TECH CONNECT

HIGH MARKS WalletHub cites Tucson, Phoenix for STEM opportunities

BY JESSICA SWARNER

areers in science, technology, engineering and math (STEM) are some of the most sought-after in today’s market. The high national median salary—$84,880, according to the U.S. Bureau of Labor Statistics—for this field compared to non-STEM jobs and strong expectations for growth are attractions. So how do Arizona’s two largest metro areas stack up when it comes to opportunities for STEM positions? The answer is, pretty well. WalletHub ranked Tucson No. 21 and Phoenix No. 38 among the country’s top 100 most populous metro areas. The personal finance website ranked the regions based on 21 measures across three categories: professional opportunities, STEM friendliness and quality of life. “Each of these metro areas have different strengths,” WalletHub analyst Jill Gonzalez says. “Tucson ranks high in terms of professional opportunities and quality of life while Phoenix gets points for STEM friendliness.” For Tucson, that means high grades in measures like STEM employment growth (about 14% from 2015 to 2018) and housing affordability. For Phoenix, top measures included the lowest unemployment rate (2.8%) for holders of bachelor’s degrees or higher, and job postings in technology (27% of the jobs listed on Indeed.com). One thing both metro areas had in common were highly regarded engineering schools. Phoenix came in at No. 15 for quality while Tucson wasn’t far behind at No. 27. “ASU and UArizona are among the best engineering schools in the country,” says Gonzales, referring to the Ira A. Fulton Schools of Engineering at Arizona State University and The University of

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Arizona College of Engineering, respectively. “Their presence in Phoenix and Tucson contributed to the two metro areas ranking in the top half in our study.” Another quality that helped the two Arizona regions rank highly, Gonzalez says, was their commitment to teaching STEM skills. “The Tucson and Phoenix metro areas encourage the development of STEM professionals through things like tech summer programs,” she says. “These help students develop their skills in areas such as coding, game development or robotics.” Community colleges also have developed programs meant to help students step right into tech jobs. Pima Community College partnered with autonomous truck company TuSimple to develop a certificate in self-driving safety drivers. The school also has worked with Maricopa County Community College District and Central Arizona College to create the Arizona Advanced Technology Network whose industry-recognized curriculum was created to teach the skills needed for high-paying advanced manufacturing jobs. Gonzalez says the metros’ large number of STEM professionals that come out of these programs attracts companies that provide STEM jobs. The Phoenix area has worked to bring in more STEM companies, specifically high-tech businesses from California. The Greater Phoenix Economic Council launched a campaign last summer called #CAstruggles that highlighted the pros of doing business in the area and the downsides of operating in California. At the time, GPEC reported it had contributed to the expansion and relocation of more than 200 companies from California to the Valley. Although Phoenix and Tucson ranked highly for STEM, Gonzalez says there were still areas in which they could do better. “Both metro areas could improve by lowering the disparity of women vs. men in STEM occupations and STEM fields of degree,” she says. “They could also benefit from an increased number of tech meetups.”

SELF-DRIVEN STUDENTS Program offers link to new autonomous vehicle industry

BY JESSICA SWARNER

renna Bayles wants to own her own fleet of self-driving trucks. The former farmer and current owner-operator of a truck she drives herself knows that humans will have to learn to adapt to these new technologies. “I’ve always known that the future’s going to be in these autonomous vehicles,” the Kansas native says. Bayles decided to advance her education by enrolling in Pima Community College’s new Autonomous Vehicle Driver and Operations Specialist program. The program was launched in the fall semester through a partnership with TuSimple, a company has used Tucson as its base for testing self-driving trucks. Students like Bayles take five courses at whatever speed they wish—all in one semester or spread out over a couple of years. Introduction to Autonomous Vehicles, Industrial Safety, Computer Hardware Components, and Transportation and Traffic Management are available online but Electrical Systems I must be taken in person. Bayles says she hopes to take the electrical systems class in the fall 2020 semester when she will balance hauling loads, taking classes and sleeping in the cab in her truck. Missy Blair, program manager of PCC’s Center for Transportation Training, helped develop the self-driving certificate. She says students learn how to work as safety drivers by becoming familiar with autonomous driving lingo and studying how to report and discuss issues with engineers. Students need to earn a commercial driver’s license before joining the program but there are no other requirements or technical knowledge needed.

Those who complete the program will get a leg up when it comes to finding a job as TuSimple guarantees the PCC graduates will get interviews for open positions. Robert Brown, TuSimple’s director of public affairs, says there simply aren’t enough qualified people to fill the seats of their vehicles. That’s why the company approached PCC last year, and the idea for the program was born. Program organizers believe the certificate is the first of its kind in the country. Brown says PCC may provide other schools the framework to create a program, and there is talk of the federal government using it to create a national standard. Blair says another important aspect of the program is that it is expected to change over time to fit the needs of the market. “It really is a neat thing to see academia ahead of the curve on things like this,” she says. Blair says PCC’s goal is to move the entire program online so truckers like Bayles can complete everything on the road. Bayles says she has the found the classes fascinating so far, and she feels they even have benefited her current job. She says she’d like to finish the program within the next few semesters then possibly apply to work at TuSimple to “learn every facet” of autonomous vehicles before she owns them herself. She has absolutely no doubt that everyone, truck driver or not, will have to learn to adapt to the self-driving wave. “This is like believing in buggy whips 100 years ago,” she says. “There’s people who said we’ll never have cars, they’re too dangerous … all the same lines people use for autonomous vehicles.” SPRING 2020 TECH CONNECT

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UPDATE THE UNIVERSITY OF ARIZONA

GROWING GLOBAL

Center for Innovation helps startups make right connections WRITING BY >< ERIC SMITH

he most recent endeavor at The University of Arizona Center for Innovation housed at the The University of Arizona Tech Park stays true to the university’s spirit of collaboration and growth. The U.S. Department of State selected the center to host four international startups as part of its Global Innovation through Science and Technology program. The incubator was selected because of its capacity to support science and technology startups within a thriving, academic-based ecosystem, and the ability to provide custom programming that helps international entrepreneurs understand how to do business in the United States, refine cultural norms and connect with U.S.-based customers. The Department of State aimed to connect international startups with a traditional incubator that has a strong network, business resources and research facilities to help them navigate the complicated task of entering the U.S. market. Additionally, it was vital that the businesses be submersed in the American startup culture. Shortly after being selected, the center welcomed the companies: Contract One of Belarus, FindBug of Kosovo, LOOQME of Ukraine and StringersHub of Belarus. Each of the businesses had built a track record of success in their home countries before the Tech Park’s exceptional resources and diverse connections allowed the startups to test their companies in the U.S. market. Each business had the chance to build a vibrant network, giving

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Participants in a Global Innovation through Science and Technology program presentation at the Center for Innovation

them the opportunity to meet with entrepreneurs, community leaders, industry experts, investors, potential American customers and more. Ultimately, the international guests’ fourweek endeavor in Tucson equipped them with the unique connections, valuable data and relevant experience that it takes to make their businesses thrive in Arizona. The benefits reciprocated as the priceless experience of absorbing another culture and learning new perspectives was just the beginning of what The University of Arizona gained from the relationship with the global startups. This opportunity sets the scene for a greater intercontinental presence in Tucson, bringing the potential for new foreign direct investment, expertise and innovation to the region. Building on this experience, the center is working to recruit more international companies and formalize its international soft-landing program by working with the International Business Innovation Association to earn certification as a soft-landing accredited site. Continuing to invite international startups to connect through the center and the Tech Park will unlock greater potential for outside funding to channel through to Arizona. One thing is for sure: The University of Arizona Center for Innovation is making strides to pioneer the boundaries of innovation on a global scale. ERIC SMITH is executive director of The University of Arizona

Center for Innovation.

UPDATE NORTHERN ARIZONA UNIVERSITY O’neil Guthrie

NOISE SOLUTION

Audiologist partners to develop therapy for hearing loss WRITING BY >< KERRY BENNETT

ore than 700 million people worldwide suffer from some degree of hearing loss, according to medical experts. In fact, the World Health Organization predicts that more than 1 billion teenagers and young adults are at risk of noise-induced hearing loss (NIHL) by using personal listening devices at hazardous volume levels. Treating and preventing NIHL is complicated, however, because overexposure to noise triggers three separate types of damage to the cochlea, the part of the inner ear involved in hearing. Loud noise promotes the proliferation of reactive oxygen species (ROS), a type of free radical that injures the molecules of the cochlea. ROS stimulates inflammation in the cochlea and damages the DNA of the cochlea. Audiologist and molecular biologist O’neil Guthrie, an associate professor in Northern Arizona University’s Department of Communication Sciences and Disorders, is collaborating with New Jersey-based Optigenex to conduct a pre-clinical investigation to help the body’s natural ability to repair DNA through a novel therapy using the company’s patented ac-11® technology based on carboxy alkyl esters. Guthrie believes this therapy administered as a single oral formulation has the potential

to repair cells damaged by noise and prevent hearing loss. As an added benefit, the technology can also target ROS and inflammation to prevent cell death in the cochlea. His work is supported with a three-year contract totaling $551,000. By developing a single drug given orally as a vitamin or gummy that addresses the problems, Guthrie hopes to make the drug as safe and effective as possible, avoiding unknown or poorly understood interactions between multiple drugs and their side effects. The drug could be taken by a construction worker, for example, before using a jackhammer, or by a concert-goer after attending a loud concert. Members of the U.S. military stand to benefit from this technology as well, notes Guthrie, since hearing loss and hearing-related dysfunctions are the most frequent service-related war injuries—even more frequent than traumatic brain injury and post-traumatic stress disorder. “Even after more than 100 years of research on hearing loss, there is still no widely accepted biomedical treatment or prevention,” Guthrie says. “Our current work has the potential to resolve this issue. If we’re successful, this solution will be able to prevent hearing loss even after exposure to a traumatic level of noise.” As director of NAU’s Cellular and Molecular Pathology Lab, Guthrie will work with his lab group to conduct this research, and is planning to hire two research specialists in 2020. The project will also provide opportunities for both graduate and undergraduate students to participate in research training by working on the project. If the clinical studies succeed as planned, the next step would be conducting clinical trials to more precisely define dosing and timing. Guthrie says, “In addition to being a research scientist, I am also a licensed clinical audiologist with more than 17 years’ experience, so I am familiar with the day-to-day struggles of individuals who suffer with hearing loss.” KERRY BENNETT is Northern Arizona University’s research

communications officer. Connect at nau.edu.

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UPDATE ARIZONA STATE UNIVERSITY

POWERFUL POTENTIAL Startup meets demands of the new space economy WRITING BY >< MONIQUE CLEMENT

ow can the space industry make interstellar science fiction a reality? One must-have is more economical and scalable solar energy for space. Stanislau “Stan” Herasimenka, an electrical engineering assistant research professor in the Ira A. Fulton Schools of Engineering at Arizona State University, believes his startup, Regher Solar, has the solution. The focus of the current space race is on launching networks of satellites called constellations comprising hundreds or even tens of thousands of satellites. With private space companies such as SpaceX, OneWeb and Amazon all launching their own constellations to enable the delivery of global internet access in the next few years, the demand for solar energy to power these satellite networks is growing. The present space solar panel manufacturers are too slow to keep up with demand. Of the current satellite projects planned for the next 5 years, the manufacturing of traditional tandem solar cells would cost $60 billion and take 10 years to produce. Solar manufacturing is a difficult field. Only a few startups have been able to succeed. Herasimenka, however, had a twist in his approach. He and his partners at Regher Solar have been developing ultra-thin silicon solar cells that are projected to cost 90% less than tandem solar cells; are faster to produce; can be packaged into lightweight, flexible panels; and still can withstand the harsh environment of space. Regher Solar’s silicon heterojunction solar cell demonstrates a concept that very thin silicon solar cells allow high-energy protons to pass through them, minimizing radiation damage prevalent in space where satellites operate. Their thinness also enables flexibility, which could

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allow satellites to use novel solar panel deployment mechanisms such as roll-up and z-fold. A panel made of ultra-thin silicon solar cells will weigh 90% less than the traditional rigid solar panel made of tandem solar cells. And less weight makes a satellite cheaper to launch. However, manufacturing these thin, flexible cells with high efficiency is not easy. Herasimenka and his team have developed a unique process flow to enable mass production of high-efficiency, ultra-thin silicon solar cells using the effective and inexpensive tools and materials presently common in the rooftop solar industry. “By leveraging this process,” Herasimenka says, “we will be able to manufacture gigawatts of solar panels meeting any potential demand for power in space in the next 20 years and beyond.” In October, Herasimenka announced a partnership with New Mexico-based SolAero Technologies to help further develop manufacturing processes. “Regher Solar has the technology and the processing capability to meet the performance demand and the cost targets that the constellation market is demanding,” says Ken Steele, director of integrated products at SolAero Technologies. Herasimenka and his ASU colleagues recently earned funding to increase solar manufacturing capabilities in the U.S. by developing a PV innovation foundry, a collaborative facility to help industry and academic users test their ideas on a pilot scale. The company has also signed a memorandum of understanding to deliver thin silicon solar cells for a private space company’s satellite constellation project by 2023. This opportunity represents eight times more solar energy production than can be produced in the same amount of time by traditional means. Herasimenka is excited about the future of Regher Solar and the capabilities that a new generation of solar cell technology can bring to satellites, as well as to the future of in-orbit manufacturing and even moon and Mars bases. “Regher is really on the path to power the new space economy,” he says. MONIQUE CLEMENT is a communications specialist for the Ira A. Fulton Schools of Engineering at Arizona State University.

Dr. Muhammed Murtaza

UPDATE TGEN

SHARPER FOCUS

Grant to help researchers refine ‘liquid biopsy’ for cancer patients WRITING BY >< STEVE YOZWIAK

n the heels of a study showing how cancer can be precisely detected by a “liquid biopsy” blood test created by the Translational Genomics Research Institute (TGen), an affiliate of City of Hope, a new $2.1 million federal grant will now enable TGen and Mayo Clinic researchers to fine-tune the system in clinical trials. The test called TARDIS (TARgeted DIgital Sequencing) is as much as 100 times more sensitive than other blood-based cancer monitoring tests, as shown in early studies. The TARDIS system detects cancer by identifying and quantifying small fragments of cancer DNA circulating in the patient’s bloodstream, known as circulating tumor DNA (ctDNA). There is growing interest in the medical community in using the TARDIS test to see how well a patient with cancer responds to treatment. Reliable performance of blood tests can be affected by sample handling. The $2.1 million, 5-year grant from the National Cancer Institute (NCI) will enable TGen and Mayo Clinic scientists to evaluate the impact of pre-analytical factors on liquid biopsies, such as blood collection tubes, DNA extraction methods, and long-term storage of ctDNA results and analysis. “Circulating tumor DNA analysis can guide treatment of patients with localized cancers, and metastatic cancers that spread to other body organs,” says Dr. Muhammed Murtaza, assistant professor and co-director of TGen’s Center for Noninvasive Diagnostics. He holds a joint

appointment on the research faculty at Mayo Clinic in Arizona. Unlike traditional surgical biopsies, which only produce results from one place at one time, liquid biopsies use a simple blood draw. So, they could safely be performed as often as needed to detect a patient’s disease status. “However, pre-analytical factors such as blood collection tubes, processing protocols and storage conditions can affect the outcome of molecular tests,” says Murtaza, a senior author of the published study “Personalized circulating tumor DNA analysis to detect residual disease after neoadjuvant therapy in breast cancer” that suggests TARDIS can detect ctDNA in as low as 2 parts per 100,000 in patient blood. The ctDNA levels are much lower in patients with localized cancer than in those with metastatic cancer. Across different clinical and research sites, there can be many differences in sample handling, such as differences in blood collection and processing, and DNA extraction. For example, delays in processing a blood sample after collection can cause a dilution or degradation of ctDNA in blood samples. In early stage cancer patients, where ctDNA levels are already quite low, this could cause false-negative results. To address this, TGen and Mayo Clinic will study 180 patients with early and locally advanced breast cancer to investigate three aspects of pre-analytical variation: DNA extraction methods, blood collection tubes and processing protocols, and long-term storage of plasma and extracted DNA. STEVE YOZWIAK is the senior science writer for the Translational Genomics Research Institute (TGen). Connect at www.tgen.org.

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