PerkinElmer, a Waltham, Mass.-based, lab equipment giant, is giving up to $2 million in testing devices for a new lab at the University of Waterloo’s Velocity Garage incubator, the first time the incubator has housed a corporate lab within its space.

Velocity hopes that giving startups access to generally inaccessible lab equipment will help it attract more deep tech startups.

In the last five years, Velocity has become a hub for those kinds of startups, whose products —which include medical devices, wearables and robotics—require long periods of research and development before being commercialized, and access to pricey equipment for testing.

The three-year agreement with Velocity will see PerkinElmer equipment—which can total up to $2 million after personalizing product and services agreements with clients—available at the lab. PerkinElmer will retain ownership of the equipment.

PerkinElmer is a US$2.8-billion healthcare diagnostics, life sciences, and food and environmental testing giant. Last year, the company completed a US$1.3-billion purchase of Euroimmun, a German-based diagnostics firm, which was the largest acquisition in its history. The company builds technology that tests the health and safety of products on humans, ranging from prenatal testing instruments to machines measuring pesticide levels in food.

The equipment at Velocity will include the QSight, which tests for contaminants in food, cannabis and environmental samples; the Avio, which analyzes micronutrients in milk or soil; and the NexION, which conducts single-cell analysis that can help researchers understand why some cancer patients are resistant to metal-based chemotherapy. Over half of the startups at Velocity stand to benefit: 52 per cent of Velocity’s 65 companies are working in deep tech.

While Johnson & Johnson’s Toronto-based JLabs, for example, provides lab equipment for testing and 40,000 square feet of space, it only focuses on healthtech companies, and startups have to pay for space. Along with healthtech equipment, PerkinElmer also provides lab equipment for companies in the environment and energy sectors.

Jay Shah, director of the Velocity Garage, hopes the equipment will help attract and grow companies currently unable to access deep-tech lab equipment.

“We can amp up commercialization of these ambitious ideas, and they don’t die on the vine, or potentially get licensed to someone else,” said Shah.

The lab is slated to open by the end of April.

Startups working at the Velocity Garage—which provides free workspace—can book time to use the equipment.

“We chose Velocity [because of] the interaction with their clients,” said Tim Freeman, the sales lead for PerkinElmer’s environmental health division. “It’s a much more dynamic, less stagnant environment, so there’s a … learning opportunity between the Velocity clients and PerkinElmer staff and scientists. So, hopefully, we can learn from them and they can learn from us.”

For Noah Debrincat, co-founder and CEO of Velocity startup SannTek, equipment like PerkinElmer’s QSight can help his company test its product faster. “Breakthroughs in science and engineering aren’t cheap,” said Debrincat. “At SannTek, we have eight employees running long experiments on expensive equipment, and for deep tech startups like us, pre-revenue value creation is key to rapid growth. So it’s a constant balancing act to minimize expenses while also being able to demonstrate significant progress.”

PerkinElmer was seeking a new location for its Canadian demo lab, currently in Woodbridge, Ont. That lab, which will be converted to a PerkinElmer research and development facility, did not allow startups to use equipment.

Canadian deep tech companies have raised concerns about commercialization in the past.

In the medtech industry, for example, a 2018 report from the Ontario Bioscience Innovation Organization, which surveyed 135 health industry executives, found that only six per cent of companies were eligible for funding. Access to health institutions where researchers could test technologies was also identified as a top challenge.

PerkinElmer is shouldering the cost of the equipment, and Velocity is covering the lease. Both are sharing the costs of renovating the space. PerkinElmer doesn’t take equity or intellectual-property rights from projects developed in the lab, and Velocity said PerkinElmer does not have the right to intellectual property from startups using the equipment. The University of Waterloo’s own policy stresses that IP generated from research done at the university is creator-owned.  

“What we offer now is just under 3,000 square feet of lab space and a set of instrumentation and equipment that satisfies about 60 per cent of the needs of the companies,” said Adrien Côté, a business adviser at Velocity. “What the new space does is satisfy 95 per cent of the need.”

While the lab’s main purpose is to show products to customers, PerkinElmer can also use the lab to inform its own product development; lab managers can observe how new users interact with the equipment and see what the next generation of tech companies is building.

“I’m down at Velocity a fair amount, just to get eyes on the ground and see what people are working on… and what I should be looking for within my team,” said Jamie McQuay, software innovation lead at PerkinElmer. “It gives us a glimpse into the scientists of tomorrow.”

PerkinElmer made a similar agreement with JLABS in San Francisco in 2015, with PerkinElmer global head of scientific services Angelo Filosa saying at the time that the company could get feedback on how its equipment performed. Filosa also noted that the experience may get startups to use PerkinElmer equipment after they move out of JLabs.

PerkinElmer has made 25 international acquisitions since 2007, including a Canadian one. It bought the Guelph, Ont.-based Labtronics in 2011, which offered procedure-tracking software for laboratories. The company has 187 employees in Canada, its 10th largest staff presence in a country, according to LinkedIn data.

Velocity has become an important starting point for entrepreneurs in Waterloo, incubating more than 300 startups that have raised over $815 million in funding. When it launched in 2010, the Velocity Garage was almost entirely made up of software startups.

The incubator has housed a number of prominent Canadian startups including Kik, Vidyard, machine-learning startup Maluuba—which sold to Microsoft in 2017—and construction management software company Bridgit.

The Velocity incubator targets early-stage companies. In the future, Shah hopes Velocity can help companies scale beyond that in two ways: sourcing capital for companies that have a longer path to commercialization and continuing to support them once they have actually secured funding. Shah said Velocity is already experimenting with this method by allowing alumni like Nicoya Lifesciences—which raised $2 million in January 2018—to continue using its equipment for product development.

Shah said the Angel Fund, one of Velocity’s most recent initiatives, has raised the majority of its $1.2-million target, and said it can raise as much as $1.8 million if there’s interest. The fund raises money from angel investors interested in early-stage startups. Now that Velocity has helped companies scale over the past nine years, Shah wants the incubator to be an entry point for more investors to be interested in the deep tech sector.

“I think we can play a role in helping the investment community understand what’s going on and be a voice of credibility for these companies,” said Shah, “because we’ve been working with companies for potentially a year-plus, and that should help unlock some capital for deep tech.”