Sware, a software validation platform for the life sciences industry, raises $6M

The company automates the validation process that the FDA requires every time software is updated

Every time software that pharma, medical device and biotech companies use for development and manufacturing gets updated, the FDA requires it to be validated for data integrity, reliability, and patient safety. In a world filled with SaaS companies, where updates happen all the time, the manual process of validating software can add time and up to 30% more to the cost to a project. 

"The FDA and other regulatory bodies around the world really want to make sure that you understand the intended use of the software, and that it does what you think it's going to do," explained Ellen Reilly, CEO of Sware, a company that automates this validation process, which announced a $6 million in Series B funding on Thursday. 

"They don't want you to rely on the software vendor to provide and say that it's tested; they want the biotech or the manufacturer and really anything FDA regulated, whether it's biotech or it's a salad dressing company, they want to make sure that you, as the responsible party, ensure that this software does what it's intended to do, and that you've tested it."

If a biotech company that's in Phase 3 trial buys Veeva CRM, DocuSign Part 11, MasterControl, and TraceLink, every time each one of those companies releases a new version of their softwarre, it has to be individually validated, which can cost millions. 

"What happens is a lot of companies don't test that, so they don't keep up with releases and that defies the whole reason to buy SaaS, which is that the software vendor is coming up with new capabilities that you get to adopt and use. If you don't keep up with the testing, then you can't use that functionality and then, if you get so far behind, you'll have to reimplement that technology," said Reilly.

"So, a CFO is going to sit there and go, “'I'm not getting the value out of the use of this technology that I bought,' and then the end users are frustrated because a vendor will introduce new functionality and then they can't use it to solve their business problem because they don't have the resources and capacity to test all the versions."

Sware solves this problem by helping companies make sure they not over testing software, not duplicating all the testing that a software vendor does, and that they're looking at the risk of those changes on their business process and managing and testing appropriately.

Through its cloud-based Res_Q platform, Sware allows pharmaceutical, medical device, and biotechnology companies to automate, integrate and scale their validation processes. Res_Q is built with an open API architecture that allows organizations to control all validation processes while performing intelligent risk assessments to initiate workflows and assign workloads based on risk profile.

This allows its customers to no longer have to pay third parties to do this work for them. 

"These companies hire consultants that come in and write all their validation documentation. And so, we've been able to take out up to 80% of costs so they don't need to hire these outside consultants: they can use our platform and then we have SaaS accelerator modules and we basically do all the risk analysis for the releases. We that to provide them and say, 'Is this acceptable?' and then they approve it," said Reilly.

"They get a consistency of work, because the technology is managing the workflow and the content versus bringing in different consultants, where one could come in last year that does it one way and somebody comes in this year and does it a different way."

So far, Sware has around 30 customers, most of which are in the biotech space, though it also works with a med device customer, as well as an AI customer that's using the software to validate its own artificial intelligence. It's also working with a technology customer that wants to get into the life sciences space, so they need to have their software validated. They've bought Sware to use internally to do the validation. 

The new funding, which brings its total raised since inception to $26 million, was led by First Analysis, joining a syndicate of existing investors including LRVHealth, New Stack Ventures, and Insight Partners.

The money will be used, in part, to expand the company’s sales team; the company began the year with 40 employees and has now brought that number up to 50. It will also be used to incorporate artificial intelligence into the platform as a way to further reduce the time and cost for its customers, including by allowing them to content with concepts.

"They can say, 'Create me a validation plan that is a new product that does this,' and it will come back and create the starting content. Then they can then edit it, accept it, and move on. So, it's trying to accelerate their content creation in the system," said Reilly.

"Then we have our Res_Q platform, we have these accelerator modules, so we take all the releases, like for example, a Veeva QMS product does three releases a year, we take all the release notes and we ingest them into our system. We're using AI to ingest that content and eliminate headcount to do that, and make it faster.”

In conjunction with the funding, it was also announced that Matt Nicklin, managing director at First Analysis, will be joining the company’s board of directors. 

"I really hunted down Matt because of his experience in life sciences tech, he has a proven track record. First Analysis did the Crossix/Veeva deal, they did the CoverMyMeds/McCesson deal. They have a lot of relationships in the life sciences tech space, which I do think is an opportunity for us to partner with them. They've already helped and made many introductions in the last couple of weeks," said Reilly. 

The ultimate point of raising this new capital was to become cash flow positive, she explained, which will put Sware in a stronger position going forward.

"This is a really unsexy space, like this is regulatory compliance. This is not sexy stuff. Nobody wants to do validation, it's a barrier for people to enter into the market and it's a burden for pharma biotech companies, that they have to meet these regulations. So, our goal is to try to make this as easy, as painless, take out costs, take out resources, and do it consistently. That's how we're approaching what we're bringing to the market."