Winterlight Labs acquired by Cambridge Cognition

TORONTO – England’s Cambridge Cognition has acquired Canadian company Winterlight Labs Inc for £7m to help target a $220 million market for speech-based biomarkers. It is making a cash payment of £3m with a £4m shares top-up, according to the British financial publication Businessweekly.co.uk.

The deal has the potential to add more than £2m to Cambridge Cognition’s revenue in 2023 with considerable further growth in 2024. Cambridge Cognition develops and markets digital solutions to assess brain health while Winterlight is a leader in monitoring cognitive impairment through free-speech analysis.

Based in Toronto, Winterlight focuses on machine-learning based voice assessments, using free-speech inputs or those that require deductive reasoning or interpretation. These are widely used in clinical trials.

Liam Kaufman (pictured), co-founder of Winterlight Labs, said: “For nearly 8 years as a company and many years before within the University of Toronto, Winterlight has worked to develop speech- based digital biomarkers for healthcare and clinical trials. I am incredibly proud of what we have engineered, validated and delivered to our life science partners. This transaction opens an exciting new chapter for Winterlight. We bring to Cambridge Cognition proprietary free-speech analysis technology and a dedicated team that are experts in the field. We are looking forward to being a part of Cambridge Cognition and together we can build a leading position in vocal biomarker technology.”

Winterlight has its origins in the Computational Linguistics department at the University of Toronto, which developed novel methods of analysing speech that were first patented in 2007.

In 2015 it spun out Winterlight, led by two entrepreneurial team members and supported by a leading professor in the field. Winterlight raised angel and venture capital funding, invested considerably in new applications and clinical validation, and built a business with over 20 pharmaceutical and healthcare customers over the past seven years.

Cambridge Cognition and Winterlight share a common goal of developing digital health products to better understand, detect and treat conditions affecting brain health.

The capabilities of the combined organisation will create a company with strengths across technology platforms for screen- based, structured voice-based and free-speech based cognitive assessments for clinical trials.

The combined company is well positioned to secure a market leading position with voice biomarker technology for clinical trials, with further potential for healthcare applications in the future.

The market for voice biomarkers for all conditions is reported to be growing at 66 percent a year and, starting from a modest base, is predicted be around $220m by 2026.

Furthermore, Cambridge Cognition commissioned extensive market research for voice solutions in 2022 and estimates that the market opportunity for those currently provided by Winterlight specifically could exceed $30 million by 2027.

To date, Cambridge Cognition’s approach to voice technology has been focused on replicating structured short – that is one or two word – verbal assessments that incorporate novel intellectual property. This has enabled the company to scale delivery of well-validated cognitive tests.

With the acquisition, Cambridge Cognition is adding to its existing portfolio of leading screen-based cognitive assessments and structured voice-based cognitive assessments with the complementary free-speech and vocal biomarker technology of Winterlight.

Winterlight’s 28 staff, with complementary and additional expertise in voice solutions and machine learning, are joining Cambridge Cognition.

Winterlight has an excellent and growing portfolio of customers including five of the top 10 life sciences companies globally, using its technology to measure disease progression and response to therapy. It has limited overlap with Cambridge Cognition’s existing customer base, providing the potential to cross-sell and generate further revenue growth.

For the year ended December 31, Winterlight generated revenue of £1 million and reported a loss before tax of £2.1 million. It had a contracted order book of £2.5 million as at December 31with around 35 percent expected to be recognised as revenue in 2023.

Matthew Stork, CEO of Cambridge Cognition, said: “Having developed short speech-based cognitive assessments for several years, we have seen the considerable potential for longer free-speech assessments.

“There is a major opportunity over the medium term for growth in this field and it is important to be an early entrant to secure a strong position for the future.

“Winterlight has established itself as a leader in monitoring cognitive impairment through free-speech analysis, as confirmed by extensive external market research.

“With this acquisition, we can now offer many of the verbal cognitive assessments used in clinical trials giving us the potential for major growth in the coming years.

“We look forward to welcoming our new colleagues at Winterlight so that together we can build on our combined expertise in voice technology to drive innovation in clinical trials.”