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Posted on Tue, May 25, 2010 : 12:47 p.m.

Ann Arbor venture capital firms team up to invest in Karmanos Cancer Institute spinoff

By Nathan Bomey

Three Ann Arbor venture capital firms and another southeast Michigan investment company pooled $8 million to help a Detroit-based startup company commercialize its breast cancer screening technology.

Karmanos Cancer Institute spinoff Delphinus Medical Technologies received financing from four firms: Ann Arbor-based Arboretum Ventures, one of the Midwest's top health care technology investment firms; North Coast Technology Investors, which maintains offices in downtown Ann Arbor and Midland; the Wolverine Venture Fund, which is led by University of Michigan students; and Beringea, a global investment firm with an office in Farmington Hills and an active presence in the Ann Arbor community.

The deal marks an unusual moment in which a startup company received a major round of financing exclusively from venture capital firms with Michigan offices.

Delphinus is developing an alternative to mammography called SoftVue, which involves submersing the breast in water and using ultrasound technology to create 3D images, giving doctors a better chance at detecting cancer and identifying the difference between cancer and benign growths.

"This diagnostic ultrasound technology presents a great opportunity to advance the current standards for early breast cancer detection without the risks and costs associated with other imaging modalities," Arboretum Ventures principal Paul McCreadie said in a statement.

Delphinus plans to add 50 to 100 jobs within the next three to five years -- including technical engineering and software development positions.

The firm believes that improved breast cancer screening technologies could eliminate 2 million unnecessary biopsy procedures a year.

Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.