Companies looking to differentiate themselves in the marketplace often make bold moves into areas that they feel will give them a leg up compared to competitors. But sometimes who they buy can lead to some headscratching
Such is the case with Alira Health, a health consulting firm serving life science companies, which added a crowdfunding platform targeting healthcare startups — RedCrow — to the menu of services it offers its clients in life sciences.
If you are bewildered reading this, so was MedCity News when we were made aware of this deal that occurred in May. Why would a life sciences consulting firm buy a crowdfunding platform? So we talked with Gabriele Brambilla, the founder and CEO of Framingham, Massachusetts-based Alira Health.
The RedCrow platform allows patients and other individuals to invest in vetted life sciences companies, which is consistent with Alira’s mission of trying to democratize healthcare, in this case by creating wider opportunities to invest, Brambilla, said.
“It’s a very particular angle but we are very proud of taking this bold move,” Brambilla declared.
He noted that the new service could help distinguish Alira from other firms providing services along the research life cycle. Among the largest are IQVIA and Syneos Health, both of which provide a full range of services. Smaller firms often focus on one aspect, such as decentralized clinical trials or biostatistics.
“People say we are crazy with this move but it’s a very differentiating move,” Brambilla said.
Alira had already been helping its clients attract venture capital, said Brambilla, who began his career in investment banking. But as a crowdfunding platform, RedCrow can extend fundraising to a broader group of investors though any investment through the platform is capped at $5 million. So, most companies seeking funding on RedCrow will be in the very early stages.
Founded in 2016, RedCrow is the fruit of a 2012 federal law that laid out regulations for crowdfunding. Its founders are Brian Smith, a former Morgan Stanley executive, and Jerry Harrison, who played guitar and keyboards for the band Talking Heads.
“We embrace Alira Health’s mission to humanize healthcare and view our platform as a natural extension of Alira Health’s business model,” Smith said in a statement. “At the same time, early-stage companies on the RedCrow platform can benefit from the breadth of Alira Health’s extensive services offering.”
Over the last six years, RedCrow has marketed more than 250 fundraising efforts totaling $250 million. Past users include HeartBeam, which is developing devices and software for detecting potential heart attacks and now trades on Nasdaq. Others include Sen Jam Pharmaceutical, Activ Surgical and Centerline Biomedical.
The crowdfunding platform relies on medical, scientific and financial experts to vet potential investment opportunities, a feature that Alira has no plans to change, according to Brambilla.
“We need an independent third party that says that target is worth getting onto the investment platform,” Brambilla said, noting it would be a potential conflict for Alira to play the role of gatekeeper.
Brambilla declined to name any Alira clients who are seeking to get on the RedCrow platform. But he noted that it will remain open to any companies in life sciences.
“It has to be an independent market environment,” he said.
Photo: Hong Li, Getty Images
