US Labs Inc., an Irvine-based medical testing company, has received $9.5 million in venture and debt financing in two separate deals.
US Labs received a $4.5 million third round of venture financing led by Highland Capital Partners of Boston and San Francisco. Accel Partners of Palo Alto and Sage Venture Partners of Los Angeles, also participated.
The company also completed a $5 million senior credit agreement with Heller Healthcare Finance Inc., a unit of Chicago-based Heller Financial Inc.
“We’re using this for working capital and to expand our genetics (diagnostic testing) effort,” said Michael Danzi, US Labs’ chief executive. “There’s a revolution going on.”
That revolution, according to Danzi, centers on the Human Genome Project. US Labs specializes in genomics, which is the medical application of genetic research. US Labs provides screening, diagnostic and prognostic cancer testing services to hospitals, physicians’ offices, surgery centers, biopharmaceutical companies and research institutions.
Industry sources estimate privately held US Labs’ annual revenue at more than $20 million. While not giving specifics, Danzi indicated that “we made all our projections and hit all numbers. We have good revenue and we’re making money operationally.”
“If you are profitable, you can attract attention and raise money,” Danzi said. “What we are seeing is interest in our sector. The interest in dot-com types is gone.”
According to Danzi, US Labs’ investors did “very heavy” due diligence before the new funding round. Highland Capital Partners treated the third round of funding as if it was a new deal, he said.
As for competitors, Danzi listed Impath Inc. of New York and Dianon Systems Inc. of Stratford, Conn. He said US Labs is making a name for itself through the application of genomics for cancer diagnostic testing.
US Labs has had a busy summer. The company is moving to a 53,000-square-foot building near John Wayne Airport that will allow it to hire 80 new workers within a year and a half. Danzi said 37 new jobs have been added since July alone, bringing US Labs’ total employment to around 225.
In a July interview, Danzi said the company had grown by 38% from February to March.
“Our projections are to grow 10% a month. We tend to grow faster than that, but that’s what we’re hiring to,” Danzi said at that time.
US Labs’ administrative functions will move to the new building in September, with laboratory operations scheduled to move by year-end.
US Labs also has operations in Los Angeles and San Diego.
Danzi, who founded US Labs around four years ago, holds an engineering degree from Cornell University. He also completed the Naval Nuclear Power School graduate engineering program, and was an officer on a nuclear-powered fast-attack submarine. He also has a master’s of business administration from the Harvard Business School.
His past also includes running Danzi Capital, an Orange County firm that invested in technology companies, and a stint as president of BioTek Solutions Inc. in Santa Barbara. BioTek Solutions, which is a testing and supplies company, was acquired by Tucson, Ariz.-based Ventana Medical Systems Inc. in 1996. n
