The COVID-19 pandemic highlighted how important it is to research, produce, and disseminate new medicines continually. Vaccines against the coronavirus often require extremely stringent temperature controls to be active. Because of this, transporting the vaccines to the locations at which they were required to be in a temperature-safe state became nearly as crucial as actually producing the vaccines themselves.
Today, SkyCell, one of the businesses that created containers to carry these medications along with many other non-shelf stable drugs used to treat a range of ailments, is announcing a significant amount of investment to drive its expansion. SkyCell is also one of the firms that designed containers to transport unshelf-stable pharmaceuticals that are used to treat several conditions. The Swiss start-up company has raised 57 million Swiss francs in a fresh round of equity funding, resulting in a new valuation of 600 million.
The financing comes at the same time as SkyCell is, so to speak, reaching new heights: it is now shipping $1.5 billion of pharmaceutical products each month (finished and raw ingredients). According to what is stated, this translates to hundreds of millions of doses of diagnostic solutions, cancer therapies, diabetic care, and preventative measures. Ironically, even though the company played a part in assisting with the distribution of vaccinations, the height of the pandemic years was not the greatest for SkyCell’s expansion. Because everything else in terms of medical treatment came to a complete and total standstill and supply chains slowed down dramatically, so did SkyCell’s business as well.
In a recent interview, the company’s co-founder and current CEO, Richard Ettl, stated that the business has now reverted to its “normal” growth rate, which is between 40 and 50 percent.
Catalyst, which is a branch of M&G Investments, is the sole investor that is being identified at this time and is heading the round. In the past, the firm has successfully funded over $133 million, with earlier games totaling $62 million and $35 million; previous backers have included insurance companies, bankers from the Middle East, and investors specializing in the healthcare industry.
Because of the critical nature of their delivery at the appropriate moment, time-sensitive pharmaceuticals and the components that pharmaceutical companies use to manufacture completed treatments typically travel via air freight. This is because of the complexity of the logistics involved in transporting them. However, the ambient temperatures during the process of being carried—which includes getting packed onto an airplane, flying, landing, and passing through customs—can fluctuate by as much as 100 degrees (more specifically, from as low as -30 degrees Celsius to as high as +70 degrees Celsius).
SkyCell has, in essence, developed a business model that is vertically integrated to overcome this obstacle. At its core is a piece of hardware that takes the form of a “smart” box that is constructed around the intellectual property (IP) that SkyCell has developed on its own (the company presently holds about 140 patents). The most recent revision of the device has a maximum operating time of 180 hours.
According to Ettl, “That provides you with an incredible amount of protection if things go wrong, which they do all the time.” Other methods for delivering temperature-sensitive items have remained astonishingly outdated and inefficient. Approximately 70% of businesses today still use products like Styrofoam and cold packs, which are both regarded as disposable. According to SkyCell, the waste produced due to the current method is enormous and is believed to be over $35 billion a year in terms of items that go bad.
It is an educational lesson for other businesses aiming for similar sorts of disruption, and it speaks to the reality of the long process that corporations go through when they change systems.
According to Ettl, the pharmaceutical business is an excellent illustration of a large and well-established sector that requires time before it can embrace and trust change. “You need the pharmaceutical company to buy into a new player, but they can’t rely on someone who might go out of business within the next year. ” They called after them and shouted, “Come back; I don’t want to be your guinea pig.” The process of getting beyond that obstacle has been challenging. It is necessary to provide evidence for all of this. Now that we are ten, it took us six or seven years to start. He joked that although it had been in business for ten years, it was still the “youngest company in the industry.”
This gives the company a recurring revenue stream on top of the boxes, which allows it to manage the business better. Along with the container, the company has also built an analytics platform for its customers to monitor and manage their supplies as they move from lab to lab and distribution centers. Considering that the boxes are typically purchased outright, this gives the company an advantage in managing the business.
In terms of future product development, a firm like SkyCell has a lot of options at its disposal. To begin, there are several other items, namely food, that also require specific temperature controls. Instead of broadening its operations, the corporation has decided to maintain its concentration on the pharmaceutical industry and to continue pursuing growth in that sector.
Its main goal is to be sustainable and switch to a CO2-neutral supply chain. This helps it meet its own emissions and sustainability goals as well as the goals of its major clients in the medicine and aviation industries.
“It is with great excitement that we join SkyCell in its quest to provide access to life-saving medications worldwide securely and dependably.
According to Praveg Patil, deputy head of EMEA investments for M&G’s Catalyst team, “We believe the innovative design of the SkyCell solution will play a key role in decarbonizing the pharmaceutical supply chain and ensuring zero waste.” This investment covers two major theme areas for Catalyst, which are climate solutions and healthcare, and it gives our investors exposure to the significant development potential of high-end biological pharmaceutical products. “From an impact perspective,” Patil will join the board of directors.
In addition to receiving the money, the business has selected Dr. Remo Gerber to serve as its Chief Financial Officer. Before that, Gerber was in charge of the European operations for the ride-hailing startup Gett, and bestartupat, he was in the order of the procedures for the EMEA region of Groupon.
