Healthcare venture capital is on the rise in Detroit and throughout the Midwest, and Southfield Downfield Development Authority executive director Al Aceves said today he hoped plans for a medical startup incubator would come to fruition “as soon as possible.”
Throughout the Midwest, 97 health care startup companies reported $511 million in total investments in the first half of the year, the highest amount in terms of both dollars and number of companies in the last five years, though still below 2007 numbers, according to a report released last week by Cleveland-based BioEnterprise.
The amount of health care venture investment more than doubled in the Detroit-Ann Arbor region in the first half, with nine companies receiving $55.9 million in the period, compared with five companies getting $21.8 million in the first half of 2011. That’s the highest amount of health care venture investment in the Detroit area since the first half of 2008, when five companies received $61.0 million in venture capital.
The opportunity for further growth in the medical field in general has not been lost on the city of Southfield, where 5,530 employees were working in the medical-related sector in the Summer of 2011, according to a report by East Lansing-based Anderson Economic Group for the Southfield DDA.
That report estimated that the healthcare sector could add another 696 direct and indirect jobs in Southfield, and another 306 new jobs could be added outside of Southfield in greater Detroit. Such employment would create about $43.4 million in new earnings in Southfield and about $32.4 million in earnings could be added to metro Detroit, the report estimates.
In April 2011, the DDA announced plans for a medical incubator in its main corridor.
“One of the ideas we were trying to generate was this healthcare incubator, and we’re still working on that,” Aceves said.
The greatest barrier to launching the incubator so far has been finding the right location, he said, in addition to financing. Aceves said the incubator would start out at about 15,000 or 20,000 square feet in size.
“These spaces can be technical, so it’s just not identifying a space and then putting a lab desk in there,” Aceves said. “It’s a work in progress, it’s pretty fluid.”
Asked for a timeframe, he said, “Obviously I’d like to get that done as soon as possible.”
“So our efforts are still ongoing,” he said.
By: David Muller, MLive