Gerry Brandon could not have foreseen any of this. 

Three years ago, he was looking for investors for his tiny bioplastics company. 

Today, after three abrupt pivots, he’s running DeepVerge: a €50 million publicly-traded skincare and sewage testing business, with operations in Shanghai, Delaware, York and Fermoy. His customers include the Chinese state and middle-aged American women.

What’s the thread between bioplastics, skincare, and sewage testing? 

There’s a story there about diversification, and acquisitions, and changing business models. 

But really, it’s a story about Gerry Brandon. Business people aren’t often credited for their originality. But Brandon built DeepVerge by creatively finding new uses for old things, new ways to combine existing things, and entirely new markets where none existed before.

At 60, Brandon has founded at least 13 companies, acquired five, floated one, sold one, and is a great grandfather. He manages 25 separate companies. He has noticeably smooth skin, which he attributes to his company’s personalised skin test product (more on that later). 

The third time I spoke with Brandon, earlier this year, he was in Poland. By this time DeepVerge had spread its wings beyond Ireland, beyond the UK, to Asia and Europe. 

“My mind works in a way like a spider’s web,” he tells me. “I think that’s the best way to go after a big project, simply because it’s so big, that nobody has any real idea of how to solve it.”

*****

The first time I spoke with Gerry Brandon was in October 2019. Back then, he had a story to tell about how he came to be running a skin science business called Integumen.

It started with Cellulac. Cellulac is a bioplastics company. In 2018, in order to get to the next level, Cellulac needed funding. And a good place to get funding for small technology companies is London’s Alternative Investment Market (AIM).

The front door to AIM is to get an investment bank to back your company, pay it lots of fees, have it shop your company around to investors, raise ten or twenty million and then have it float your company on the market.

That works, but it has the drawbacks of being expensive and requiring that you raise a fair bit of funding from private investors. 

Brandon had another idea: in 2019 he and his business partner, Camillus Glover, combed through the half-dead companies already listed on AIM. AIM has many such failed companies, still technically alive but trading for only a couple of hundred thousand pounds. 

The idea was that they would take over the husk of another company, and reverse Cellulac into it. That would get them up and running on the stock market, with better access to investment capital, at a fraction of the cost and effort that would go into a traditional listing. 

They came across a company called Integumen, trading for £1.2 million. It had been the worst-performing listing on AIM in 2017, which is saying something. 

Integumen was a skincare technology company. It caught Brandon’s eye because, in the 1990s and 2000s, he had built, floated and then sold for $55 million a wound care business called Alltracel. So he knew the market somewhat. 

When he looked at Integumen, he saw something interesting. 

Discarded IP

“AIM is a wonderful pool of scientists and accountants running engineering and science companies… that shouldn’t exist,” Brandon tells me. “But, because of the money that’s been poured into these companies, they use the opportunity to perfect their science and engineering — rather than commercialise the products that they already have.”

Integumen might have been on life support, but it owned some interesting IP. One of its products was called Labskin. Labskin is an artificial skin product, developed at York University. It’s an artificial skin — which is literally cloned from human skin cells – and looks just like your own skin. It’s used for testing cosmetics.

Seeing potential in Labskin, Brandon and Glover bought Integumen outright. They put about £1.5 million of their own money in, which they used to clear some debts and get the business ship-shape. 

Brandon put Cellulac on the back burner and turned his attention to Integumen. His big idea was that its business model wasn’t aligned with the product it was selling.

Previously Labskin had been sold as a one-off product for about £1,500. The customer was corporate R&D labs.

Brandon’s plan was to sell it, not to companies’ R&D teams, but to their marketing teams. From his Alltracel days, Brandon knew a bit about skincare marketing. He knew that marketing teams wanted to make big science-backed claims on the side of their products. And he knew that making those claims was expensive — between labs, trials, test subjects, it cost about £200,000 to run a scientific study.

Brandon’s plan was to use Labskin to run these trials much more cheaply. Instead of charging R&D labs a one-off £1,500, Integumen started charging marketing teams a recurring £50,000. 

“We went from a turnover of £49,000 in the first half of 2018, to nearly £300,000 by the end of the year,” Brandon said. “So it was: okay, now we’ve got something here. Let’s just move this faster.”

That was pivot number one: from bioplastics into Labskin. In the following year Integumen did £800,000 in revenue; in 2020 it did £4.4 million. 

2020 was a big year for Integumen. That was the year of its second pivot. 

But before we get to all that, it’s important to understand how Labskin works. There are two interesting things about it. One is that it’s an artificial skin, cloned from humans, on which you can run tests.

The other interesting thing about Labskin is that it’s already been used for more than 40,000 tests, and Integumen owns all that data. That’s an asset: Integumen can use it by, for example, comparing new skin tests to its database of previous tests.

To make the most out of all this data, Integumen needed help. So in 2019, it bought a Cambridge University spinoff called Rinocloud for €3.5 million. Rinocloud was founded by a Corkman named Eoin Murray. His father Fionán Murray joined Integumen, too. He’s now Chief Operating Officer.

Rinocloud provided the key piece of technology that allows Labskin to be offered remotely as a digital service, rather than in-person as a physical service. It’s a software layer that brings the outputs from different lab equipment together in a uniform way.

“Rinocloud is the backbone of all the data. It’s the conduit through which all the data collected in [the business] is processed,” said Brandon.

The second pivot

The second time I spoke to Gerry Brandon was in October 2020. In November the previous year, Integumen had released a statement — likely to have been read by about fifteen people — detailing the results of an obscure water test.

The test, in conjunction with Ireland’s Environmental Protection Agency, was about e-coli in drinking water. The test showed Integumen’s technology was able to test drinking water for e-coli within four seconds, compared to the existing testing time of five to seven days. 

At the time the Remote Automated Water Test (RAWTest, as they call it) wasn’t a huge focus for Integumen. Its main product was Labskin, which helps R&D labs test skincare products.

On January 24, Brandon took up a new role as Chairman of Modern Water, a small AIM company focused on testing groundwater for contamination. 

Three months later, Covid-19 arrived. And Integumen rushed to reposition itself.

On 26 February, Integumen announced a partnership with Modern Water and seven other companies, aimed at developing a test for water contamination in real-time. On March 30, it announced a flood of orders for water contamination testing kits. On June 22 it announced a new partnership to develop Covid-19 testing kits in wastewater. Then in mid-August, Integumen’s share price shot up 90 per cent on no news at all.

On August 28 Integumen’s full plan was revealed, when it announced its intention to buy Modern Water in an all-share offer for £21.5 million. 

Modern Water is a 30-year-old business that specialises in monitoring sewers. Its product is called the Microtox machine. It’s a long way from Integumen’s core business of R&D for skincare companies. But, as Gerry Brandon explained to me at the time, the deal could work. The idea is to augment Modern Water’s sewage monitoring with automated Covid-19 testing, provided by Integumen.

“The common denominator is AI, but also the expertise we have in bacteria, viruses and toxins within Labskin,” says Brandon. “And that then translates across to the environmental element of Modern Water, where we produce bacteria to detect pathogens in the water.”

Modern Water’s systems are installed at more than 2,900 locations in 63 countries. With Integumen’s technology, they’ll be able to continually, automatically test for Covid-19. That will let authorities track the virus to specific locations in real-time. And Integumen is working with cruise operators, for example, to test and isolate their passengers. “We’ve had queries from five-star hotels, where they want to be able to confirm that there’s no contamination,” said Brandon. “They want to literally market the fact that they detect on a daily basis.”

A faster test

There are good reasons to be testing sewage for Covid-19. It’s fast, for one. The tests run automatically every ten minutes, 24 hours a day. And they can detect a spike in the virus long before people get symptoms, get tested and get results. Prof Davey Jones from Bangor University told BBC News: “All the evidence suggests that we can potentially see a signal in wastewater before we see a spike in infections in the community.” A study from the Netherlands was able to detect the virus from sewage when the confirmed detection rate was just one case in 100,000.

A second advantage is that it doesn’t require that people go for testing. The WHO estimates 80 per cent of Covid-19 infections are asymptomatic. Another chunk of people get symptoms but don’t bother going for tests. For that reason, Gertjan Medema — who is a microbiologist at KWR Water Research Institute in the Netherlands — says: “Health authorities are only seeing the tip of the iceberg.” Sewage testing detects everyone — even those who are asymptomatic or showing weak symptoms.

The beauty of Modern Water, from Integumen’s perspective, is that its kit is already installed in 2,900 locations around the world. Making use of Modern Water’s kit to run Covid-19 tests is a big commercial opportunity. 

If Modern Water has the customers, and the kit, what does Integumen bring to the table? Integumen uses artificial intelligence to comb through big databases of lab results, and speed up the process of skincare testing. And as we’ve seen, as a side project, it’s been working using the database to detect e-coli in wastewater. So what Integumen offers is the ability to apply AI to Modern Water’s sewer testing kits, and to its 30 years of data, and use them to test for Covid-19. 

“The beauty is, it wasn’t even recognised as value,” says Brandon. “The same as Labskin, it wasn’t even recognised as value. With Labskin, there was 12 years of data which nobody thought had any value whatsoever. With Modern Water, there was 30 years of data. It was a perfect use of applied artificial intelligence.”

The new business model

Modern Water has been knocking around on AIM for ten years, in which time it has consistently lost money. Its revenue flatlined at around £3m for the eight years before being acquired. And it’s lost money every single year — an average of £4.8 million per year. 

Why was Modern Water such a dog? Brandon says: “It raised £30 million, back in 2007 I think it was. And since then, they have literally just spent that.”

“They targeted big-ticket installations. And the problem with big-ticket installations in a small company is that you still have to have a substantial amount of support, sales and support engineering, while you wait for the next big-ticket to be sold.

“The commercial model was incorrect. Now we’ve converted that into a high volume, low cost, but high margin recurring revenue model.”

To run its tests, the Microtox machines need special reagent chemicals, provided by Modern Water. Gerry Brandon sees the reagent kits as the commercial opportunity. Instead of paying up-front for an all-in Covid-19 testing system, Microtox customers will pay a continual monthly fee for the reagent chemicals:

“The model that we are moving to is more of a rental and maintenance model, where they pay over a period of three years. And there’s recurring revenue for the consumables within each of those units, which are placed once a month. 

“So it’s now no longer an application to the finance department for a budget for the equipment to be installed. You’re only looking to ask for permission once, instead of every single time you want an installation.”

As with Integumen, the new business model delivered straight away. Orders at Modern Water rose 49 per cent in the quarter after he joined as Chair.

By this point at the end of 2020, things were starting to motor. Revenue for 2020 came in at £4.5 million. From a standing start in 2019, Integumen was then worth about £40 million. 

Before any of this

This is not Brandon's first Rodeo. "I don't remember the number of companies I set up but it is in the teen," he says. "Not all of them were big, some failed (miserably) because I thought early on that nobody could do it better than me, so I worked myself to exhaustion and gave up."

His first big success story began in 1996, when he started Alltracel from his kitchen table. He had four kids. "Back then, we were [spending] £30 on the debit card to buy food, because below £30, the banks didn't check that you were overdrawn."

Long story short, Brandon floated Alltracel on AIM. Despite it trading for less than £2 million at one point, he eventually sold it for $55 million in 2008. I ask, what did he take from that?

"You can't try and build a brand from nothing. We tried with Alltracel. We did reasonably well, and the brand is still out there. But we had some seriously good minds around the board table: Irial Finan, head of Coca Cola Bottlers, Denis Malamatinas, the former CEO of Pepsi and Diageo. And I had Noel Toolan, who launched Baileys.

"I had three genius marketing gurus around my board table for four years. So I learned how to deal with the consumer. One thing is that a consumer won't just trust you. They're like, 'Who the hell are you? Where'd you come from? I don't know what this is.' And it doesn't matter how great you think it is."

A second lesson from Brandon's early days: how to position your product. "A lot of people when they start up a company assume 'oh, my God, I have to find my first customer. I have to figure out my route to market.'", said Brandon.

"I go from the other side. And I say, 'okay, which is the biggest, fastest lane of traffic, that is a need of my services that I can stand in front of. And how do I put something there?

"What I realised very early on is your market has to be global," he added. 

DeepVerge

When Covid appeared, Brandon was in a promising position: he had just bought a company with testing kit in thousands of sewers around the world. The kit was designed to test for bacteria. 

"When COVID appeared, everyone was coming out with PCR tests and LFT tests, and the market was going through the roof. 

"I wasn't thinking about that, I was thinking about John Snow back in the 1830s and 1840s, who discovered that cholera was transmitted through drinking water. And I said 'Okay, can we solve a much bigger problem from a global perspective. Especially because we have this distribution channel with Modern Water, it's easy to tap in and distribute that once we get the technology right."

"That's how that came about. Come June of 2020, it was so obvious that there was a need to have this real-time technology tracking the virus."

"However, Ecoli is 40 times larger [than Covid-19]. The virus is like point 001 of a nanometer. So we've evolved that technology further from what was originally there."

The Instagram pivot

First it was Cellulac and bioplastics; then it was Integumen and skincare testing for R&D; then the company was renamed DeepVerge as it pivoted to sewage testing. From a £1.5 million investment in mid-2019; to a £16 million market cap at the end of 2019; to £30 million in 2021. 

The final time I spoke to Gerry Brandon in January of this year, he was on his way to Fermoy, where DeepVerge is ramping up production on a new product. He arrived in from Poland on Friday evening, and he was gone again, from Cork airport, on Monday at lunchtime. I get our photographer, Bryan, to meet him at the airport. 

The new product is a departure for DeepVerge.

Brandon went back to what he had learned with Irial Finan and Denis Malamatinas, years before at Alltracel, about selling directly to consumers. 

In the Alltracel days it was difficult to start a company selling directly to consumers, because building a brand was costly. You had to put out national TV ads and the like. 

Social media has changed all that. Now, small companies can spend small amounts of money and reach consumers directly via Instagram and Facebook. 

DeepVerge, and Integumen before it, had always sold its products directly to businesses and governments. Selling to consumers takes a very different product and business model. By chance, the opportunity presented itself to DeepVerge: 

"We realised at the beginning of the COVID pandemic, when all of the skincare companies couldn't do clinical trials because they couldn't do human trials and couldn't get access to anybody. 

"So we created for them a remote testing kit that allowed us to give them access to the people in their homes, take the skin test back to our laboratory, and deliver the output of a clinical trial to the skincare companies. 

"Then we said, 'This is unique. I mean, unique as in every individual has their own skin microbiome. Why don't we give everybody access to it?

"We got the cost — what was about £110 pounds per test — down under 35 quid by evolving our own testing techniques using the genomic sequencing machines, and automating them. 

"And because of that, we were able to get the price down to where it's profitable for us, but not only that, it is now democratising skincare."

Why would anyone need a personalised skin test? 

"We test for 1500 different bacteria on the surface of your skin, as well as your DNA. So it tells you genetically what the potential risks associated with your skin, the environment that you're living in, the season that you're in, the medication that you're on. And that gives you a picture of what your skin is, and what it needs."

"Because we've tested so many 1000s of different products for skincare companies over all of these years, we're now in a position to say this ingredient within these types of products will give you an improved skin.

"And then when you get the product, you get the results of that, you're given a list of recommended products that you purchase. 

"And we get paid wholesale margin on the products that are recommended and purchased. So we have revenue coming from that angle as well. 

"And then the fourth piece of revenue that comes from that is the tens of thousands of anonymised test data that we are building up. We have the largest skin microbiome database in the world right now.

"[The marketing] is all social media. And it's all directed specifically to the profile of 31 to 55-year-old women. 

"We thought we had a DDOS denial of service attack when we actually did one specific social media campaign, until we realised that there were actually 1400 people on the site trying to order the kit. We shut it down for fear that we were having an attack.

"We've now achieved 20,000 a month capacity in the UK. Fermoy is coming on stream in Cork with 20,000 capacity a month. The US is coming on stream now at 20,000 capacity a month. And we are negotiating with a partner in the US to bump that up to 100,000 capacity a month if we need to.

"We've talked to investment banks, we've been approached on whether we should spin this out and listed on NASDAQ. It is a Silicon Valley-type growth potential for the Skin Trust Club."

A sale of Skin Trust Club would be the final proof of Brandon's method. So far he has built DeepVerge into a promising, fast-growing business. But it's not yet profitable. The house broker, Turner Pope, estimates the business will throw off £5.9 million of free cash in the 2021 financial year, rising to £8.5 million in 2024.

The connector

The business books say startups are dangerous to incumbents because they're tailor-made to solve the problem at hand. Their technology, culture, organisation, and skills are all tightly focused on the problem. 

DeepVerge is definitely a successful startup — in three years, it has reached a valuation of £44 million, or €50 million. But it doesn't fit the normal startup mould. 

It's a company that's been bolted together from three under-appreciated and seemingly unconnected parts: the Labskin skin clone, the Microtox sewage test, and the Rinocloud data system. 

I can't think of many businesses built entirely spare parts. It takes a peculiar type of insight to do it. I ask Brandon what he sees when he looks at the other small companies on Aim.

"I mean, sometimes you feel, 'do you not realise how great this technology is? After how much you've spent on it? I mean, it's crazy," he says. 

"But it's great if you have that ability to see. To think, 'If I took that, and I put it into here, imagine what I could do with that'."