Virtual and augmented reality technologies were among the most hyped technology developments of the past decade, supplanted now only by Artificial Intelligence (AI). But is the market now meeting its hype expectations?
Consider Meta who reportedly lost nearly $20 billion to date on its Metaverse initiatives, which it recently announced would be put on the back burner in favor of AI-enhanced advertising programs, causing its stock price to rise once again.
So, is the VR market real? Not so much yet for consumers. According to Statista only 15% of consumers have tried it. But when it comes to B2B applications, the market is booming, reaching $37 billion in 2022 and estimated to reach over $114 billion by 2027, according to MarketsandMarkets.
Nanome is one those companies contributing to that trend. The San Diego, California-based company was launched in 2015 by Edgardo Leija, Samuel Hessenauer, Keita Funakawa, and Steven McCloskey. This founder’s journey is based on my interview with Nanome CEO McCloskey.
“VR has been one of the main applications scientists have been using for decades to look at protein structures and doing science. But these systems were really expensive and cumbersome. Where we wanted to differentiate was allowing these scientists to actually use their hands to modify and design molecules, tweaking and running it with simulations, having collaborative experiences where everyone could join remotely and still collaborate from anywhere around the world,” says McCloskey of the thinking behind Nanome.
Nanome is a virtual reality software company that offers a collaborative XR software platform for molecular design, helping to accelerate existing computational workflows at the molecular scale to accelerate innovation in pharmaceuticals and other industries.
Data-heavy industries like pharmaceuticals or material design require scientists to create new chemical compounds through the use of complicated mathematical equations. McCloskey wanted to change that process. “Our whole point is, how does a human interact with these? How do they understand that data? How do they share that data? Can that data actually do something to make a new drug that might save somebody’s life? So, it’s about enhancing people, not reinventing the science, but leveraging all the science that exists,” says McCloskey whose VR software is compatible with the Oculus Rift, HTC VIVE, and Microsoft Mixed Reality hardware VR headsets.
McCloskey started Nanome while still in college at the University of California, San Diego (UCSD) and had the good fortune of being accepted into the lab at the Qaulcomm Institute as a freshman to study nanotechnology. He became fascinated with computer graphics, nanotechnology and VR capabilities and had a vision to synthesize those technologies into a single platform that would accelerate innovation by visualizing molecules in VR from available databases of molecular configuations that allowed researcher to manipulate those molecules in real-time by using their hands.
Part of the evaluation of these AI generated molecules that can be done in virtual reality and collaboratively where you have different experts inputting their feedback and using that to come up with better molecules. McCloskey hopes to create the Nano equivalent of GitHub, where you can try on a molecule for experimentation through the Nanome platform further extending collaboration and accelerating innovation through the network effect.
The Qualcomm Institute is also an incubator of new technologies and provided an office for the fledgling business. “We would be able to keep all the IP as if we were an independent org, but still be on the campus at the Qualcomm Institute Innovation Space. So, it was a really awesome area, lots of smart people in a collaborative open office,” says McCloskey.
How did McCloskey and his team go from cobbling tools and software together in a lab to gaining their first customer?
Through the school’s entrepreneur programs, McCloskey connected with one of their advisors who then convinced the former Chief Information Officer at pharmaceutical giant Novartis to reach out to current Novartis scientists interested in visualization and collaboration. “We went to the Novartis campus and brought all of our VR gear. We showed them what we’ve been working on and they’re like, mind blown,” says McCloskey.
They got a very small contract with them which they grew from there to multiple sites outside of San Diego. Our platform was very useful tool that Novartis wanted to invest in from a customer collaboration standpoint, not as an investor. So, the founders were able to bootstrap the company through their customers without initially having to seek venture capital. Nanome has only raised $6.4 million in venture funding to date, with Bullpen Capital leading its latest round for $3 million in February of 2021.
“We’d like to see more patients have a better quality of life. We want to save people’s lives, whether it’s from COVID, or cancer or any other disease out there. The platform that we’ve built could really help,” says McCloskey.
Today, Nanome’s some 35 employees work with half of the top 20 pharmaceutical companies globally, biotech companies and some 250 universities that license Nanome’s technology. “We aim to continually double growth,” says McCloskey. While the company is having a world-wide impact, it remains a relatively small organization. “We’ve always been lean and bootstrap because we’ve always been scrappy, just trying to run the company for this long-term vision that will eventually be ubiquitous across everything. But it just takes time to get there, “says McClosky.
McCloskey grew up in North Hollywood and Los Angeles, California near Universal Studios, surrounded by the entertainment industry more so than science. So why the fascination with nanotechnology? “Unfortunately, as a child, my grandmother died of cancer, and my mom survived cancer. She’s still alive today and doing well, but exposure to cancer killing family members got me more interested in science and actually helping to cure that,” says McCloskey.
His dad was an aerospace mechanical engineer, so McCloskey grew up tinkering with tools, helping his dad work on cars. But he also loved and grew up playing soccer, and then football and college rugby. “I think that sports are great for getting people to work together. I think that’s just like a valuable skill that is necessary in terms of working together much more effectively than all individually,” says McCloskey. In addition to his desire at an early age to cure cancer, he also was interested in the renewable energy field and while still in In high school he converted an older Mercedes he bought from his cousin for $100 to run on vegetable oil.
After high school, he applied to and was accepted as a biochemistry major to the University of California, San Diego. He drove his smelly, vegetable oil-burning car to the UCSD campus and started college not knowing at the time that UCSD had a great nano engineering program. “My freshman year, I learned that we had a nano engineering programme. I took this class, and I was absolutely just sold. It is all this stuff that cures cancer. But it was also the renewable energies. It’s literally engineering with atoms and molecules and building your way up from there, “says McCloskey.
In fact, the department chair at the time, Kenneth Vecchio, founded the first nano engineering department in the world at the Qualcomm Institute. As a Freshman, he convinced Vecchio to accept him into his lab usually open only to graduate student by showing him the schematics for his veggie-burning car. He helped pay for school by trading Bitcoin while also playing rugby for the University and became captain of the team his senior year.
“I got the idea for putting nano engineering data on to a virtual reality system and simulating it and leveraging more of the computational capabilities. And that was just what I really dedicated myself to at that point. I just want to push myself and make it happen. I believed in myself and my girlfriend at the time, who is now my wife, believed in me,” says McCloskey. He and some of his friends who had graduated from the program joined his company full-time and started creating the first iteration of Nanome in 2015.
As for the future? “Everything starts with the nanoscale, and everything’s made out of atoms and molecules. We see Nanome as the ultimate interface for building anything,” concludes McCloskey.