Kendall Square-based LabCentral gaining traction with biotech startups

LabCentral is a 501(c)3 nonprofit that serves as a springboard for life sciences and biotech startups. The model makes it easier for creative academics to transform an idea into a profitable business by addressing the initial need to invest in lab equipment and space.

“Biotech startups have historically had to spend all of this money upfront,” said Dr. Johannes Fruehauf, co-founder and president of LabCentral. “And it is the most expensive money they will ever spend.”

Startups in the LabCentral network can accelerate the timeline to verify their scientific hypotheses without needing to own a lab. Once they have confirmed their research ideas, they can more easily attract venture funding. In fact, LabCentral companies has secured a quarter of all early-stage (seed and Series A) bio-pharma financing in 2021 in Massachusetts. Its companies attracted 15% of all early-stage financing nationwide that year.

In 2022, the Galien Foundation chose LabCentral as the first winner in its new “Incubators, Accelerators and Equity” category.

The genesis of LabCentral

About two decades ago, Fruehauf and his wife traveled from their native Germany to pursue postdoc training in Boston. Fruehauf planned on returning after about 18 months. But the postdoc program took longer than anticipated and his work eventually attracted the attention of venture capitalists.

“The experience made me realize that you don’t have to work in a university or a big pharmaceutical company to take science forward,” Fruehauf recalled. “Instead, by empowering smart people with money, you can take ideas forward or even create your own company.”

In 2006, Fruehauf co-founded Cequent Pharmaceuticals, which would be acquired by an RNAi-based drug discovery and development company, MDRNA Inc, in 2010. He co-founded a microbiome-therapeutics company known as ViThera Pharmaceutical afterward. “At that time, it was difficult to raise venture money in the wake of the financial crisis,” Fruehauf said.

Word got around

To generate cash, he helped create a contract research organization (CRO) known as Cambridge Biolabs. Its clients mainly were venture capitalists in the Boston area looking to validate their projects before investing in them. “We became a part of their wet-lab due diligence process, and several projects arose out of that, which we had tested and validated,” Fruehauf said. “Soon, we had several projects in our lab that belonged to other people.” Other scientists rented a desk or two from the CRO, which had a fully equipped lab.

Word got around about the space. “We got calls from people asking to rent lab space and realized there was a real need in the market,” Fruehauf said.

“In the beginning, the shared lab model originated from a circle of friends,” Fruehauf said. With a considerable number of first-time founders, BioLabs could offer wet lab space while also helping foster introductions to investors.

“In 2013, we knew we needed to grow but didn’t have a lot of capital,” Fruehauf said. After hearing about the Massachusetts Life Sciences Center, which offers capital for life science nonprofits, Fruehauf decided to spin out a 501(c)3 tax-exempt charity called LabCentral. “Our mission at LabCentral is focused on educational and economic development, particularly in entrepreneurial education,” Fruehauf said. The nonprofit succeeded in receiving funding from the state.

A growing number of facilities

While the startup field has many incubators to help young companies, BioLabs has deliberately avoided that term. “Many incubators have attracted weak companies — companies that couldn’t make it in the wild,” Fruehauf said. “We came at this as scientists and founders ourselves. We created LabCentral to benefit founders.”

To date, LabCentral and BioLabs have close to 20 facilities between them. “We have plans to open even more sites in the future. LabCentral is currently only located in the Boston/Cambridge area, with three locations along Main Street (700, 610 and 238) in Kendall Square as well as two sites in collaboration with Harvard (one in the Longwood Medical Area and one on the campus of the Harvard Business School in Allston).

To date, roughly 300 companies have worked with LabCentral and BioLabs, representing thousands of employees. “We have companies that range from a one-man or one-woman founder outfit to more mature companies with 35 or 40 employees,” Fruehauf said.

The average tenure of the companies is about two years. “It’s now probably a little bit longer. COVID has slowed down the transition of companies out of network, but about half of the companies would turn over every year,” Fruehauf said.

LabCentral Ignite’s focus on diversity

As a revenue-generating nonprofit, LabCentral can afford to reinvest in its mission. About two and a half years ago, Fruehauf discussed with the organization’s board of directors the prospect of launching an initiative to help foster diversity in biotech. “This was especially important after the awareness raised by the murder of George Floyd,” Fruehauf said. Those conversations ultimately led to LabCentral Ignite, an initiative to create job opportunities for diverse populations while helping address the industry’s recruiting challenges.

In 2021, LabCentral hired Gretchen Cook-Anderson as the executive director of LabCentral Ignite. Cook-Anderson brings decades of marketing and communications experience to her role leading the novel platform addressing systemic racial, gender and other underrepresentation in talent across the life sciences and biotech. Fruehauf said her hiring was one of his “proudest achievements.” “She has built a small but mighty team who work every day to educate young students and adults, create internship opportunities and offer job readiness training to make the industry more inclusive and create access for diverse talent in biotech,” Fruehauf said.

Career Forge

Ignite has introduced a program known as Career Forge, which is a three-week hands-on upskilling program. It offers basic tissue culture techniques, sterile techniques and lab math training. The program is for cohorts from diverse backgrounds with basic science training who are underemployed.

“We have great stories from people who have come through this program and found new employment opportunities,” Fruehauf said. Ignite also offers other activities, such as a public awareness campaign called “Life Sciences in Full Color,” which aims to create role models for populations that don’t typically have access to the industry. “Ignite is currently focused on Boston, but we plan to expand to other cities this year,” Fruehauf said.

Fruehauf said it is rewarding to connect skilled people with opportunities. “Our industry partners are also appreciative,” he added. “They are typically impressed with the quality of talent we produce.”