Venture Capital

Ornicept looks to hire 3 as it aims to quintuple in size

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December 3, 2014

Ornicept is on the precipice of a big growth year. The Ann Arbor data-collection startup has already enjoyed a nice growth spurt over the last year but now has it sights set on even bigger things 2015. Ornicept is projecting to grow four or five times its current size over the next year. The company currently stands at a staff of 10 employees after making two hires in business development and software. It also looking to hire another three people for senior positions right now. "We're growing really fast," says Russell Conard, CEO of Ornicept. "I'm lucky to work with a really good team." The 3-year-old company’s software platform that helps field workers log and manage data. That means everyone from wildlife biologists to infrastructure inspectors can input information into a mobile device and have it processed in a central computing source. The technology was good enough to allow it to take first place in the IT category of last month's Accelerate Michigan Innovation Competition in downtown Detroit. The $25,000 in prize money will be put toward Ornicept's Series A round, which will be worth seven figures and close on by next year. "The round is going really well," Conard says. Ornicept's current platform is full operational and being used by some large companies across the U.S. "We have some of the biggest companies in the world relying on our platform," Conard says. Source: Russell Conard, CEO of Ornicept Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

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FreeStride Therapeutics scores win at Accelerate Michigan, adds positions

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Economic Development

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December 3, 2014

FreeStride Therapeutics won the Life Sciences category at last month's Accelerate Michigan Innovation Competition. The win came with a check for $25,000. The Ann Arbor-based startup, which is repurposing a human drug for veterinary purposes, made a number of connections with investors and fellow entrepreneurs at the four-day business plan competition in downtown Detroit. "It was a generally rewarding and a literally rewarding experience," says Michael Long, CEO of FreeStride Therapeutics. FreeStride Therapeutics is developing a drug that relieves and even prevents shin pain for racing horses. It even has implications for companion animals, like dogs and cats, suffering from arthritis. The startup is working on raising $1 million in a Series A to complete the final two studies necessary to bring it to market. The $25,000 from Accelerate Michigan will go toward that effort. "We'll probably be able to close on that by the end of the year or early next year," Long says. The three-person company plans to raise a Series B after it starts to generate revenue for its technology. That money will go toward overcoming the final hurdles on the way to FDA approval. "We'll have a very good understanding of what the market wants from us," Long says. Source: Michael Long, CEO of FreeStride Therapeutics

SkySpecs wins Accelerate Michigan, spot at Techstars incubator

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Economic Development

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November 12, 2014

Third time turned out to be the charm for SkySpecs. It took the Ann Arbor-based drone startup three tries at the Accelerate Michigan Innovation Competition before it won it all and a hefty payday to go with it. SkySpecs first participated in Accelerate Michigan's student competition in 2012 when the startup was being launched by some University of Michigan students. It took third place in the student portion that year. It came back again in 2013 and made the semifinals of Accelerate Michigan. This year it went all the way and took home $500,000 in seed capital. "The biggest things for us is it's going to really accelerate our product development," says Danny Ellis, CEO of SkySpecs. "It will enable us to do what we need to do to get our project out into the world and hire more people." SkySpecs is developing aerial drones that use artificial intelligence to inspect infrastructure in dangerous locations, such as the blade of wind turbines. It's WingMan platform allows the aircraft to hover near an object without fear of hitting it. Check out a demonstration company’s WingMan technology here. SkySpecs has hired two people (business development and computer programer) over the last year, expanding its staff to nine employees. Those nine people are currently working in New York City at the Techstars incubator. The company plans to wrap up its tour there and return to Michigan by February when it hopes to have 10 prototypes working in the field. "We thought (Techstars) was going to help us to take it to the next level," Ellis says. "They have the right network and the right skill set." Source: Danny Ellis, CEO of SkySpecs Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ann Arbor-based startups all but sweep Accelerate Michigan

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Economic Development

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November 12, 2014

Ann Arbor-based startups all but swept the awards at the Accelerate Michigan Innovation Competition last week, taking home a combined $740,000 in seed capital. Startups from Tree Town took the top two spots, and won six out of the nine sub categories. A startup led by University of Michigan students also took second place in Accelerate Michigan's student portion of the competition. The big winner was SkySpecs, a startup developing drone technology, taking home the $500,000 first place prize. Getting here has been a long road for Ann Arbor-based company, originally placing in the student portion of the competition in 2012. "This was our third year doing it," says Danny Ellis, CEO of SkySpecs. "It was a really, really good competition. I was impressed with so many of the competitors." Cribspot, which calls Kerrytown home and has an office in downtown Detroit, took second place in the overall competition. That showing earned it $100,000 in seed capital, which company plans to use to adds staff to help further develop and expand its online-student-housing platform. The following Ann Arbor-based companies took home category awards: - Ornicept won the IT prize (worth $25,000) for its software platform that helps field workers collect and manage data. - Solartonic won the Alternative Energy prize ($25,000) for its flexible solar panel technology, solarap, that attaches to non-traditional surfaces, such as wrapping around the pole of a street lamp. - Akervall Technologies won the Advanced Materials prize ($25,000) for its thin-yet-tough mouthguard made of non-compressible, perforated materials. - Freestride Therapeutics won the Life Science prize ($25,000) for its drug that relieves and even prevents shin pain for racing horses. - AlertWatch won the Advanced Transportation prize ($25,000) for its patient-monitoring technology. - TurtleCell won the People's Choice award ($10,000) for the second year in a row for its Phone case that comes with retractable earbuds. HeelSecret took second place in Accelerate Michigan's student competition ($5,000) for its shoe attachment that helps better connect high heels to the people wearing them. The startup is led by University of Michigan students. Source: Danny Ellis, CEO of SkySpecs Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Ann Arbor lands office for Texas-based VC firm, Mercury Fund

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Economic Development

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November 12, 2014

Mercury Fund, a Houston-based venture capital firm, is opening its Midwestern office in Ann Arbor and is taking aim at making investments in Michigan-based startups. To solidify its plans it has brought on Adrian Fortino as a partner to run the Ann Arbor office. Fortino had been running the Invest Detroit fund (he will remain an advisor) and will utilize his local expertise to make more investments in local startups. "We are deeply interested in exploring the research and industrial background here," says Adrian Fortino, partner with Mercury Fund. "I see an immense opportunity in the industrial and research corridors." Mercury Fund is in the midst of raising a $100-million investment vehicle, which Fortino expects to close before the end of the year. Mercury Fund has made investments in two local startups, DeepField and Swift Biosciences, and is currently looking at other potential investments. The Ann Arbor office of Mercury Fund is located in the Headwaters space in Kerrytown. Headwaters is a small community of startups and early stage investors led by Ann Arbor-based Huron River Ventures. "There is an incredible value to being around other investors in town," Fortino says. Source: Adrian Fortino, partner with Mercury Fund Writer: Jon Zemke

Houston VC firm opens in Ann Arbor

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Economic Development

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November 12, 2014

Somebody smells money. If there's one thing Texans don't fool around about it's football, oil and, of course, making money. To wit, Houston-based venture capital firm Mercury Fund has set up shop in The Deuce. Excerpt: "He said there is a depth of engineering, computer science and machine-learning talent in the area, bolstered by graduates of the University of Michigan. One of Mercury's main areas of investment is biotech, and there are numerous contract research organizations in Ann Arbor that were founded by former Pfizer Inc. employees after it closed its local operations in 2008." Read the rest here.

Ann Arbor-based Stratos develops one card to bind them all

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Economic Development

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October 15, 2014

We've covered Stratos big investment scores in a recent issue of Concentrate but it looks like TechCrunch just caught wind of the A2 company developing an all-in-one, inter-connected credit card. Excerpt: "The startup raised $5.8 million from Midwest and West Coast investors. San Francisco-based Toba Capital led the round with Western Technology Investment, Hyde Park Venture Partners, and Michigan-based Resonant Venture Partners also participating. Stratos is one of the latest companies to come out of Ann Arbor. Olson was born in Michigan, and its CTO co-founded Detroit Labs. Stratos operates out of the same building that houses the hot security startup, Duo Security." Read the rest here.

Stratos ramps up staff for new Ann Arbor office

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Economic Development

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October 8, 2014

The startup formerly known as Protean Payment (freshly rebranded at Stratos) has a new name, a new pool of money to draw from, and is looking for a new home in Ann Arbor to accommodate its growth. Stratos announced last week that it raised $5.8 million in a Series A round. Silicon Valley-based Toba Capital Partners led the round with Ann Arbor-based Reasonant Venture Partners participating, along with two other venture capital firms. Stratos is working on disrupting the way people pay for everyday purchases, but not too much. It is making a new card that combines all of the cards in your wallet (credit, debit, loyalty) into a bluetooth enabled device. The idea is to simplify how a person pay for things without having to build a whole new payment infrastructure (and learning curve) around it. It is also the reason behind the larger-than-usual-by-local-startup-standards initial capital raise. "We're a software company and a hardware company, so we have an increased capital requirement," says Thiago Olson, co-founder & CEO of Stratos. Stratos is still working on developing its technology and Olson declined to give some details about it, such as when it's anticipated to launch and how many people work for the startup today. He did say the company is looking to hire 10 people right now and expects to keep hiring for the foreseeable future. "We're scaling on all fronts," Olson says. "It's going to be constant hiring on all fronts." Stratos currently works from an office building in Kerrytown that it shares with Duo Security and Reasonant Venture Partners. Duo Security, also in the midst of a hiring spree, is moving to a bigger office in downtown Ann Arbor this fall. Stratos is evaluating whether his firm will expand into the newly vacated space or elsewhere as it looks for a space that could house between 40-50 people. "We're expanding and we're going to be moving into a new office and that's one of the places we're looking at," Olson says. Source: Thiago Olson, co-founder & CEO of Stratos Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

U-M student-led VCs look for a few good startup investments

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Economic Development

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October 8, 2014

Opportunities for finding seed capital for local startups are anything but in short supply this fall. A broad range of financial sources are looking to invest tens of thousands of dollars in promising ventures, such as the University of Michigan’s Social Venture Fund and the Accelerate Michigan Innovation Competition. Three student-led venture capital funds at the University of Michigan are putting out calls for applications. The VCs are looking to sink $50,000 to $100,000 per investment, and they are looking for a broad range of startups to evaluate. "We invest in 1-2 companies per year," says Joanna Herrmann, director of investments for the University of Michigan’s Social Venture Fund. "Last year we invested in two companies." The other two student-led funds (the Wolverine Venture Fund and the Zell Lurie Commercialization Fund) are looking to make investments of similar sizes in a wide variety of ventures. This is the fifth year for the university's Social Venture Fund. It has made five investments in that time, including an investment in downtown Detroit-based software mapping startup Loveland Technologies, which has hired three people in recent months. The Social Venture Fund looks for companies that are for-profit and aim to make a social or environmental impact. "We try to cast a really wide net," Herrmann says. Bigger money is at stake at the Accelerate Michigan Innovation Competition this fall. The annual business plan competition offers prizes that are often worth $10,000 or more. Top prize is $500,000. Startups from Washtenaw County, and the U-M specifically, have historically fared quite well, often taking the top spot and walking away with six figures in seed capital. For information this year’s Accelerate Michigan Innovation Competition click here. Source: Joanna Herrmann, director of investments for the University of Michigan’s Social Venture Fund Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Huron River Ventures optimistic about local deal flow

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Economic Development

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October 1, 2014

Huron River Ventures recently announced its investment in Cribspot, leading a $660,000 seed round in the Ann Arbor-based startup. An Ann Arbor-based venture capital firm investing in a Michigan-based startup isn't that unusual. However, it's becoming much more par for the course for Huron River Ventures. The Kerrytown-based venture capital firm has made 12 investments since it launched in 2010, and is on course to make a couple more before the end of the year. "We are almost exclusively looking at Michigan-based companies right now," says Tim Streit, partner of Huron River Ventures. That includes two that are in the final stages of due diligence before a potential investment. Streit says that startups in the local entrepreneurial ecosystem are maturing after several years of development. It means that the team of nearly half a dozen people at Huron River Ventures don’t have to travel far to make investments. "We are seeing an exceptional deal floor out of the state of Michigan right now," Streit says. "We haven't had to look very far out of state to find companies." Cribspot is latest example of it. The 1-year-old startup was launched by University of Michigan students who were looking to make the process of finding off-campus rental housing more efficient. The startup, which also has an office in downtown Detroit, went through the Bizdom program to help it sharpen its business plan. "It's a great example of how the world is shifting," Streit says. Source: Tim Streit, partner with Huron River Ventures Writer: Jon Zemke Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.