Hospitals have long used ultraviolet light to kill viruses, but the devices were too expensive for businesses and schools. Spurred on by the pandemic, an unlikely trio started R-Zero to develop a lower-cost alternative, and it just appeared on our latest list of upcoming $1 billion startups.
GRAMranting Morgan was taken aback. It was March 2020, covid was wreaking havoc across the country and one of the simplest ways to kill a virus, blow it up with ultraviolet light, was not used in schools and nursing homes because hospital grade disinfection devices cost over $100,000. But the co-founder and CEO of R-Zero couldn’t understand why: “It’s a light bulb with wheels and a timer. There’s no way it’s going to cost $100,000,” says Ward, who previously worked at Abbott and mobile phone repair startup iCracked. “It’s an artifact of our fucking healthcare system.”
In April, he and his co-founders, venture capitalist Ben Boyer and Eli Harris, who had worked at drone company DJI and co-founded battery startup EcoFlow, were struggling to build their own low-cost disinfectant UV lights. Within months, R-Zero had lined up its first customers, renting them a mobile device for $17/month that could clean a room in a matter of minutes. Today, the Salt Lake City-based startup sells ultraviolet-based hardware that disinfects, software and sensors that measure how full a room is, and a dashboard that provides analytics on how devices are being used.
“You look at people starting companies and you think there is a formula. The dirty secret is that no one knows what they’re doing.”
Last year, revenue reached $13 million; it is expected to triple this year. With $170 million in equity funding from investors including Silicon Valley DBL Partners and Mayo Clinic, R-Zero is now valued at $505 million. That rapid growth helped earn it a spot on this year’s Forbes Next Billion-Dollar Startups list, one of the 25 companies we think are most likely to hit a $1 billion valuation.
With concerns about the pandemic fading, Morgan now sees a much bigger opportunity beyond Covid. The same UV light disinfection technology that inactivates coronavirus can also help reduce the risk of transmission of other diseases, such as influenza and norovirus, including monkeypox. Based on short-wavelength light known as UVC, ultraviolet devices work without toxic chemicals or massive energy use. Since they disinfect indoor environments and not the human body, they are not considered medical devices, which means the company does not need to spend time and money dealing with the FDA.
“I think we can get out of Covid and build a safer, healthier new normal,” says Morgan. “I think this will be integrated into all physical spaces. It will be as ubiquitous as general lighting.”
Morgan, 33, grew up in Folsom, California, the town made famous by Johnny Cash’s “Folsom Prison Blues.” Her father was an accountant; her mother ran a small business selling printed forms and later became a school administrator. In high school, Morgan played drums in a jazz band (“We went to Europe and opened for Carlos Santana”), but chose to study mechanical engineering at California Polytechnic State University.
After a stint at Abbott and a small medical device maker, he landed on iCracked in 2015 when his friend AJ Forsythe, who had founded the company in his Cal Poly bedroom, called him up. “You look at people starting companies and you think there is a formula. The dirty secret is that no one knows what they are doing,” he says. “That was a really empowering thing for me early in my career.”
It also reinforced his preference for startups over large companies. When Allstate acquired iCracked in February 2019, he stayed only six months before leaving for another startup. “I don’t have an off switch,” says Morgan. “It is a blessing and a curse. I am, perhaps, maladjusted. The status quo makes me uncomfortable.”
“The traditional chemical disinfection industry is highly inefficient. It’s inefficient, it’s unsustainable, it’s dangerous and it’s labor intensive.”
It was venture capitalist Boyer, 46, a co-founder of Tenaya Capital, who had the original germ of an idea to use ultraviolet light to fight Covid. Boyer would bring the connections and the strategy, Morgan the leadership. His third co-founder, Harris, had a background in hardware manufacturing and knew how to sell.
Harris, 29, a Forbes Under 30 alumnus, had an unconventional upbringing on a shared property in Santa Barbara. His parents had spent many years abroad (his mother in ashrams in India, his father in Kenya) and he studied Mandarin at Amherst University. For a decade, he lived in China, worked at drone company DJI in Shenzhen, and then co-founded battery startup EcoFlow in 2016. He and Morgan had connected through a potential partnership for iCracked technicians to repair DJI drones that they never worked.
For scientific credibility, they connected with Richard Wade, a toxicology expert (and father of an iCracked employee) who became the company’s chief scientist. At 76, Wade, who has a doctorate in environmental health sciences from the University of Michigan, had worked in public health for decades and, among other roles, had been vice president of environmental health at Princess and Norwegian cruise lines. . In particular, he had written the protocol for the decontamination of the Diamond Princess ship after its Covid-19 outbreak. “My bias was UV because of its proven efficacy,” says Wade.
After briefly considering on-demand disinfection, they quickly changed their minds to building — and selling — ultraviolet devices at a price that would work for restaurants, hotels, and schools. “I called Ben and said, ‘You’re going to think I’m crazy, but we’re building lights.’ He tells me, ‘You’re crazy, but I agree,’” says Morgan.
It was not easy. The supply chain crisis meant UV bulbs were hard to come by. Knowing that manufacturers often produce a few more for every large order they receive, Morgan went to LightSources, one of the largest manufacturers of UV bulbs, and asked to buy whatever was left over. “We have overloaded bulbs, only five bulbs,” he says. They then searched the internet more and finally got enough bulbs to come up with a design.
By July, they had built a prototype called Hope (as in “I hope this works”) that was six and a half feet tall, held together with duct tape and wire. They dragged him to Atelier Crenn, a Michelin-starred French restaurant in San Francisco, and won a first beta customer. Then they loaded him into a minivan, driving across California, to a fancy ranch for tourists, to schools, to anyone who might be a customer, to show him off. Aided by its relatively low price and the panic of many business owners about how to safely reopen, they began lining up for customers.
“The traditional chemical disinfection industry is very inefficient,” says Ira Ehrenpreis, managing partner at DBL Partners, an early investor in Tesla that led R-Zero’s $15 million funding round in August 2020. “It’s it is ineffective, it is unsustainable, it is dangerous and it is laborious.”
With the new funds, R-Zero placed a large order for UV bulbs and focused on improving their design. They wanted a product that not only safely sanitized, but also didn’t look out of place in a restaurant or school. They hired Bould Design, a San Mateo, California-based shop that had designed Nest thermostats and Roku streaming players, to create a streamlined look. “It had to look secure,” says Bill Dougherty, chief information security officer at digital healthcare firm Omada Health, which signed a deal with R-Zero when it reconfigured the company’s space last year.
Today, in addition to Omada Health, clients include large school districts, such as those in Clark County, Nevada, Fort Bend, Texas, and South San Francisco; sports teams like the San Francisco 49ers and Detroit Red Wings; senior care facilities, including Trilogy Health Services, which operates 132 locations throughout the Midwest; and companies like electric vehicle startup Rivian and home products maker Simple Green.
R-Zero moved from a pricing model of leasing its devices at ultra-low cost to a more sustainable model of selling them and charging a subscription of between $50 and $250 per month to cover things like software and replacement bulbs. The company now offers three devices. Its original mobile Arc device is the most expensive at $28,000 and can only be used to disinfect an empty room due to the damaging impact of its UVC light wavelength (254 nanometers) on people. R-Zero’s two newer devices are cheaper and designed to run continuously in the background. Both hit the market in November 2021.
Beam ($5,000) is an LED-based superior room disinfection device that uses 265-nanometer ultraviolet light to create a disinfection zone positioned above people in a room. The Vive ($3,000), meanwhile, uses a wavelength known as far-UVC at 222 nanometers to inactivate harmful microorganisms in the air and on surfaces, even when people are present. While Beam works in large open spaces like classrooms and office lobbies, Vive can be installed in smaller spaces like conference rooms and bathrooms.
“We’ve come to realize that there is no one-size-fits-all infection protection,” says Boyer. “What Arc competes with is some form of chemical intervention. For Beam and Vive, it’s the HVAC upgrades.”
In July 2021, R-Zero acquired a small piece of equipment called CoWorkR that uses sensors to measure how many people are in a room. That information, in turn, allows you to determine the risk of a room (a crowded room is less safe) and automatically turn disinfection devices on or off. The data also allows R-Zero to provide its clients with advice on whether meeting rooms are over capacity and how to space out meetings to reduce the risk of infection.
Before the pandemic, people accepted as normal that illnesses like influenza and the common cold spread through offices and schools, says Morgan. However, the technology that could reduce the risk of Covid-19 could also reduce the transmission of these long-standing diseases, a boon for both health and productivity. “The long-term view is to sell a reduction in sick days,” says Morgan. “We are capitalists, but I want my tombstone to say: ‘Grant helped eradicate the flu.’”
Header image of R-Zero founders Grant Morgan, Ben Boyer and Eli Harris with their UV-based disinfection devices.