Why We Invested: Kivo

Alline Akintore – July 2022

A Conversation with Kivo

In April of 2022, Oregon Venture Fund (OVF) invested $1M in Kivo, leading a $3M round in the electronic document management and collaboration solution targeting the growing number of emerging biopharma companies. We were impressed with the Kivo team, their mission to support underserved small biotechs, and their broader vision for Kivo.

I wanted to take a few minutes to introduce CEO Toban Zolman and Kivo to the OVF community.

Toban one of the things that impressed us at OVF is the founder-market fit, including your deep product experience at early-stage tech startups and companies. You had worked in the regulatory space in life sciences software, then at a number of tech companies, before your most recent stint at Rigado (an OVF portfolio company). What made you decide to go back into life sciences and start Kivo?

A dozen years ago, I intentionally left life sciences and regulated software, because I felt that there wasn't enough innovation. It seemed like software development was evolving quickly through movements like Agile and Lean and through cloud architectures that were all viewed as incompatible with regulated software.

Since I left the space, best practices around managing enterprise SaaS apps have significantly matured to the point where we can meet the most stringent security and compliance standards. However, most of the existing regulatory solutions in the market were architected before these advancements and aren't in a position to drive innovation or reduce cost based on modern technology.

I saw an opportunity to innovate in a space that I understood really well, and was still using outdated solutions, especially for smaller companies. We can take all of these best practices that were codified over the past decade and reapply them into regulatory to build better software, iterate on it faster, and deliver it more inexpensively. Collectively, this changes the entire business model of how you build and deliver regulated software. Speeding up the regulatory process speeds up bringing new drugs to market, and Kivo wants to be part of that acceleration.

As you know, part of our diligence in researching potential investments is to speak with customers or potential customers to get their view on the product or service.  When we spoke to potential Kivo customers, we were fascinated by what we learned: these companies were utilizing less sophisticated tools because the tools they needed were overpriced, or overengineered for large pharma. Could you share what the evolution has looked like in this industry?

There was a big transition in the early 2000s. Historically, the way biopharma companies would submit to the FDA was they would back up an 18-wheeler to the FDA where they would use forklifts to unload millions of pages of documentation.

A literal 18-wheeler?

Yes, literally. The FDA facility was essentially a document warehouse. The company I worked in, ISI, produced the very first electronic submission to the FDA. That CD-ROM is at the Smithsonian. We were defining electronic standards for FDA submissions. I traveled globally, working with large pharmaceutical companies to implement these standards, and eventually wrote a book about these standards in 2007 – in a career of nerdy accomplishments that may be the nerdiest.

Kivo – why now? And how do you view Kivo in the long term - what's your vision?

Like I mentioned, all the enterprise SaaS and cloud best practices could be deployed to small biotechs, but what had really shifted is the amount of drug development that is now happening in small pharma companies over the last two decades.

Venture capital is partly to thank for that: it's expensive to develop a drug, which is why it was traditionally done by very large companies. With VC dollars, researchers can take a promising compound, raise enough money to get through clinical trials, prove safety and efficacy, and then sell the licensing rights to large pharma players.

This has led to drug development pipelines skewing heavily toward emerging companies, with fewer than 100 employees. They don’t have the internal resources to manage the onerous regulatory compliance work, and they don’t have the budgets to spend on pricey document management systems.

There is a real opportunity at that intersection between the market and the technology changes, to offer a feature-rich, right-size solution that in the past you couldn't have done without cloud technology.

My vision for Kivo is to build a platform for small biotechs to manage the drug development process from preclinical to post-approval, and do that with their way of working in mind – using partnerships and outside contractors.

How do you view yourselves relative to the competition?

There's no one that we're aware of, at least, who has kind of drawn a bull's eye around this part of the market and is going directly after it, which I think makes this also really compelling for our target market.

What we are seeing is that regulatory compliance needs are quite specific, which underlines our value proposition to small biopharma companies: trying to take a file management platform and bolt on compliance pieces, creates an awkward workflow. At the same time, trying to take a full regulatory solution that's designed for thousands of users, and have that work and not be overkill for a company with 20 employees isn’t usually practical.

We’ve identified the best features and tools to support the compliance that's needed, while creating lightweight workflows that are completely anchored in how regulatory manages their projects without complicated configurations and implementations.

What are your thoughts on the current market conditions and what that could mean for Kivo?

There are still a lot of unknowns in the overall economy, but I think if we end up going into a recession, our solution will be incredibly attractive to companies that maybe wouldn't normally look at us. It is much more affordable, and we can implement it much faster than our competition.

This could be compounded by a common trend in life sciences: when there's an economic downturn, pharma companies rely more heavily on outsourcing and contractors, instead of bringing headcount in, and I think that's an area where we really shine in terms of our features. I'm not thrilled about prospects of an economic downturn, but from a business standpoint, I feel like we're positioned well if that happens.

Your two priorities for this seed round?

Scaling product is our primary priority: growing engineering and increasing the rate that we're shipping features. The second is scaling our go-to-market efforts on sales and marketing. Overall, getting the flywheel spinning to get momentum as quickly as we can.

Any book recommendations, Toban?

The book that I have open right now was written by my mother: she wrote a book titled Thirty-one Miles From Nowhere about her time growing up in post-depression western Kansas without electricity or indoor plumbing. 

It's a great book to pick up periodically, ground myself on what matters outside of tech, and put some perspective on the day-to-day challenges we face in a modern, affluent, and technologically rich environment.