Indianapolis-based Indigo BioSystems Inc. plans to invest in developing new products and has changed CEOs after securing $8.5 million in venture capital.
The north-side firm of 47 employees makes software used by research labs to review and analyze data. Its new CEO is past president Randall Julian, a former Eli Lilly and Co. researcher who founded the company in 2004 through the drugmaker’s venture group. Indigo spun off in 2008.
The $8.5 million investment will let Indigo expand its primary product—a software package called Ascent. Customers as large as Lilly and the federal Centers for Disease Control and Prevention use the program.
Also, Indigo plans to tweak its lab software to reach customers in other life sciences fields outside of medicine, such as food or environmental clients.
Bootstrap Venture Fund LP, headquartered in San Diego, led the $8.5 million investment round. Indigo is at least the second Indianapolis company to receive funding from Bootstrap. Earlier this year, the firm put $2.8 million in CloudOne, a private cloud service that contracts with IBM.
Of the Indigo investment, Bootstrap said, “The health care industry is facing major changes on many fronts, and we believe the future is especially bright for expert software systems like Ascent that enable significant productivity gains.
"Indigo is uniquely positioned to provide extraordinary automation tools to toxicology and clinical laboratories, including hospital outreach labs. We are confident that rapid adoption will continue within Indigo’s already impressive customer base and will expand throughout the health care industry.”
The investment is Indigo's second from a venture capital firm. The company raised $1.8 million in 2011. It has also received $1.75 million in grants from the state funded 21st Century Research and Technology Fund, as well as $700,000 in conditional tax credits through the Indiana Economic Development Corp.
With the investment in hand, Indigo's board appointed Julian as CEO. He took over from Raul Zavaleta, who had served in the position since 2011. Zavaleta remains with the company as a consultant and a board director.
Julian, a researcher with no business background before starting Indigo in 2004, recruited Zavaleta to steer the firm. That let Julian focus on product development.
The $8.5 million infusion—combined with 10 years of helping operate a business—left Julian feeling comfortable he could take over as CEO.
“It’s always been my intention to run my own company,” he said. “Raul has done everything he promised me he’d do. It was time.”
Indigo also will use the venture capital to help handle rapid growth that has arisen in part from a shift in its business model.
In 2012, the company moved from collecting revenue from software license fees to a cloud-based software subscription model which generates revenue more gradually.
Indigo in 2012 generated about $4 million in revenue, before it dipped in 2013. But sales are in the process of spinging back this year as the cloud service jumps from zero customers at the end of last year to an expected 80 clients by the end of the second quarter and 200 to 300 by year’s end.
“We just made a decision after having a big, successful year in 2012 to make a leap while we had the cash,” Julian said. “The rapid adoption has helped.”