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Michigan eLab bridges the gap between Silicon Valley and Ann Arbor startups

Michigan eLab opened with an idea for bridging the startup economies of Silicon Valley and Ann Arbor. Most people would assume that means focusing on California first, then Michigan. The team at the Ann Arbor-based venture capital firm has found the opposite to be true.

"We just wrapped up our eighth investment with this fund," says Doug Neal, co-founder & managing director of Michigan eLab. "We are on pace to do an investment per quarter. We did two investments in the fourth quarter of last year."

That last investment is in an artificial intelligence startup based in Ann Arbor. Neal declined to disclose the name at this time but believes it can become a household name in tech. The investment before that was in a startup called Rachio, which was co-founded by a University of Michigan alumni. The startup's technology helps maximize the water used by sprinkler systems through wifi and software.

"Think of it as nest for your lawn," Neal says. "It saves people as much as two thirds of the water they would use on their lawn."

Michigan eLab raised nearly $25 million in this investment fund with a focus on investing in early stage tech startups. So far about half of the fund is committed and Neal expects to make a number of investments later this year.

"Were off to a good start," Neal says. "We're close on one right now. That will be our first quarter investment. We have found that deal flow is not a problem for us."

Source: Doug Neal, co-founder & managing director of Michigan eLab
Writer: Jon Zemke

RightBrian Networks continues rapid growth in cloud IT work

Jamie Begin has worked for someone else. He's found himself in an unemployment line. And then he found himself starting his own IT business, RightBrain Networks. Now he's just trying to hold on for dear life.

The Ann Arbor-based company has been on a rapid growth streak. Two years ago it tripled in size. This last year it’s growth is nearly the same... and not showing any signs of slowing down.

"We have doubled in size," Begin says. "We are on schedule to double in size again this year. Our schedule calls for 16 hires but I think we will exceed that. We have really hit our stride."

RightBrain Networks provides IT and cloud-computing services for both large and small companies. Some of its customers include Intuit and the University of California, Berkley. It recently added Toyota’s Ann Arbor research-and-development center to its client list, along with Crown Equipment in Ohio. Today it's clientele is made up of big firms and small startups trying to get their IT needs done.

That has allowed RightBrain Networks to hire 14 people over the last year, including professionals in IT, administration, and sales. The 6-year-old company now has a staff of 24 people and is in the process of trying to hire a handful more right now. Begin is bullish on his firm’s prospects.

"We're expecting to double again," Begin says. "This is such a fast change industry it's hard to budget appropriately. We are just hanging on and enjoying the ride."

Source: Jamie Begin, founder & CEO of RightBrian Networks
Writer: Jon Zemke

Detroit startup Castle kicks off first month at Y Combinator

One of the more promising startups in Detroit's tech scene is making a splash several time zones over. Castle, the property-management startup, is nearly done with its first month of work at the Y Combinator accelerator in Silicon Valley.

The world-famous startup accelerator is the cream of the crop when it comes to tech incubators. More than 1,000 startups have passed through its program since its launch in 2005. Its alumni include some current tech heavy hitters like Reddit, AirBnB, and Dropbox. Getting in is no easy task. It took the Castle team three tries before it got its invitation to the Winter 2016 batch. About 5,000 startups applied and only 89 were selected.

"While we're thrilled that leaders in the startup community have recognized what we've accomplished so far, we know that the real work is yet to come," Max Nussenbaum, CEO of Castle wrote in a recent email. "YC is an opportunity that we’re going to have to work incredibly hard to make the most of, and that’s exactly what we plan to do!"

Castle's software platform streamlines the property management process for landlords and tenants. It provides services for quick fixes, rent collection, and finding new tenants for a flat, monthly fee of $79. The company got its start when three fellows of the first Venture For America class in Detroit were renovating a tax foreclosure in Virginia Park into a future home for VFA fellows.

Castle has since taken over management of hundreds of rental units in Detroit, and it consistently grows its client list by double-digits each month. The company raised a $300,000 seed round in early 2015.

Source: Castle
Writer: Jon Zemke

Inventev halfway to raising $1.5M seed round for commercial truck tech

Inventev recently landed a $500,000 federal grant, which represents a large chunk of the TechTown-based startup's upcoming seed round.

The 4-year-old clean-tech startup has raised $750,000 in seed capital, including the half-a-million-dollar grant, a matching $50,000 grant from the state of Michigan, and $200,000 worth of in-kind contributions. The $500,000 grant is from the ARPA-E agency of the U.S. Department of Energy.

"This satisfies about 50 percent of our seed round," says Dave Stenson, founder and CEO of Inventev. "We hope to close that as soon as possible."

Inventev and its team of four people are developing a hybrid-electric system for commercial trucks. Unlike traditional plug-in electric technology that helps propel a vehicle, Inventev's new transmission architecture allows electric machines to operate other aspects of the trucks. That way the trucks' diesel engines don't need to idle while operating their hydraulic lift to dump a load material.

The $1.5-million seed round, which Stenson hopes to close by at least the second quarter of this year, will go toward building out the first prototype of the platform. Specifically it will be a lab-based delivery vehicle. The second half of the seed round is expected to fund the creation of a road-worthy prototype.

"This is our first hardware set," Stenson says. "It's fair to call it proof of concept prototype."

Source: Dave Stenson, founder & CEO of Inventev
Writer: Jon Zemke

HARMAN cuts ribbon on expanded Novi HQ to accommodate growth

HARMAN International Industries opened its new headquarters in Novi this week, and it is already starting to feel full.

The connected technologies firm started designing the headquarters three years ago when it had about 750 people working there. Today its staff at the headquarters has reached 1,000 people and is still growing.

"It's pretty close to capacity at the moment," says Darrin Shewchuk, senior director of corporate communications for HARMAN. "We're growing really rapidly."

HARMAN specializes in making connected technologies for automotive, consumer and enterprise markets. It engineers and develops the advanced technology solutions for the connected car, automotive audio, and cloud services. HARMAN has revenues of $6.5 billion and employs 25,000 around the world, including 1,000 at its Novi headquarters.

HARMAN's recently opened North American headquarters measures out to 188,000 square feet and anchors the 400-acre Haggerty Corridor Corporate Park. The new building includes engineering labs for advanced connected car technologies, infotainment design studios, a state-of-the-art audio listening room, a full cinema quality 5.1 surround sound theater, and a full-scale pilot factory. It also features several employee amenities, like a fitness center, locker rooms, cafeteria, collaboration spaces, and an outdoor deck and patio space.

"We want to make the work environment as amenable to employees as possible," Shewchuk says. "Everybody is trying to perfect their work-life balance. Our desire is to help them achieve that."

Source: Darrin Shewchuk, senior director of corporate communications for HARMAN
Writer: Jon Zemke

Building Hugger to host open house at new HQ in Eastern Market

It took a few attempts, but historic restoration business Building Hugger believes it has finally found a space into which it can grow. Building Hugger founder Amy Swift affectionately calls the 6,000-square-foot Eastern Market building the Hug Factory. It's the third re-location for the business this past year, which has grown from one to nine employees since February 2015. Swift says Building Hugger has also grown to become the largest historic window restoration company in the region, fielding calls from Port Huron to Detroit to Ohio.

An open house is being held Saturday, Jan. 30, at the building and is free and open to the public. Tours, demonstrations, and a community mingle will be held at the space from 1-4 p.m.

Building Hugger deals in many aspects of historic restoration and redevelopment work, though the bulk of its business is currently in window restoration and weatherization. It's a process that takes up a lot of space, says Swift, and with the increase in business came a need for more square footage. The work space was designed to maximize project volume. Work stations for each phase of the window restoration process have been set up to make the job more efficient.

That's not to say that the space is complete. In fact, Swift is still searching for the right use of 1,400 square feet of the building -- a storefront in need of a store. She has ideas, of course, like opening a specialized hardware store or a DIY training facility. She'd like to offer weekend courses in restoration work. Swift is planning on utilizing the open house to gather input from the public and see what's in demand among the restoration and DIY crowd -- what kinds of classes people would be interested in taking and what sort of hardware and tools she should carry.

"I always saw myself as a steward of these historic buildings," says Swift, who started Building Hugger in 2012. "But I've found I'm at my best when helping others be stewards."

Swift hopes to get the storefront up and running somewhere over the next 6-12 months.

The Building Hugger Community Mingle is a partnership between Building Hugger and Brick & Beam Detroit. To RSVP, do so online here.

The Hug Factory is located at 3036 Chene St.

Famed Pinkerton detective agency opens downtown Detroit office

Pinkerton has opened an office in downtown Detroit that will serve as the headquarters for its Michigan operations.

The private security guard and detective agency has taken 1,800 square feet in the Globe Building (407 E. Fort St.) near Greektown. Four people will work out of that office on a consistent basis, along with a handful of other employees who pass through. The office will serve Pinkerton's Michigan clients, primarily in the manufacturing and technology sectors.

Pinkerton has been a household name in detective agency and security work since the mid-19th century when it was first known as the Pinkerton National Detective Agency. Its agents were commonly known as Pinkertons and did everything from guard President Lincoln to chasing wild west outlaws like Jesse James.

The company moved its national headquarters to Ann Arbor last year, and has been eyeing opening an office in downtown Detroit ever since. The firm was attracted downtown's rebirth as a tech hub.

"It's something we identified a while ago that we wanted to be a part of," says John Lawrence, vice president of central region for Pinkerton. He adds, "this building (the Globe Building) was a great fit for us."

Source: John Lawrence, vice president of central region for Pinkerton
Writer: Jon Zemke

Sidewalk Ventures works to connect businesses with local investors across Michigan

Sidewalk Ventures spent its first year helping a local entrepreneurs connect with local investors, but now the Midtown-based company is looking to spread its business model across Michigan.

"It's been a year of educating people and helping people across the state understand what this new phenomenon is," says Jeff Aronoff, principal at Sidewalk Ventures.

Sidewalk Ventures, which calls the Green Garage home, bridges the funding gap for small businesses looking to get their ventures off the ground. The firm pairs clients with local investors to create community-based investment and a smart profit to their backers.

The 1-year-old company helped Sister Pie, a seasonal baked-goods company, lock down five figures of investment last year. The money, which came from local investors, helped Sister Pie secure its retail location in West Village, giving it space for future growth. Sidewalk Ventures is also helping the Detroit City Football Club raise hundreds of thousands of dollars to renovate its new stadium in Hamtramck.

"The investment deal will be open until the middle of February," Aronoff says. "It will be between $400,000 and $750,000. We have already raised $360,000."

Aronoff is currently working to attract more potential small businesses from across Michigan. It's also looking to attract more community organizations, like downtown development authorities, to help it make inroads in neighborhoods across the Great Lakes State.

"This is a tool that can be used by anybody in the state of Michigan," Aronoff says.

Source: Jeff Aronoff, principal at Sidewalk Ventures
Writer: Jon Zemke

Bloomfield Hills startup's new technology is like FaceTime for surgeons

When a new surgical tool hits the market, there is usually a learning curve involved. Often that means a representative of the manufacturer needs to be in the operating room during the procedure to help guide the surgeon.

"That's very costly," says Mike Weber, president and CEO of Quipzor. "It drives the cost of the products up."

That is why Quipzor, a Bloomfield Hills-based startup, is developing a teleconferencing platform that will eliminate the need for the manufacturer's representative to be physically in the room.

The technology is essentially FaceTime for surgeons, allowing a manufacturer's rep to teleconference into the operating room to guide them. A surgeon will have access to the same expertise, but with one fewer body in her way. Quipzor will also cut down on travel expenses for manufacturers, allowing them to lower the prices of their products. Quipzor plans to start testing its platform later this winter in dry runs (not actual procedures) with surgeons.

"We plan to do 1-2 pilots this year in southeast Michigan," Weber says.

Quipzor recently joined Automation Alley's 7Cs program, which helps local startups with advanced manufacturing through coaching, mentoring, and access to Automation Alley's resources and capital. Weber plans to use the program to help Quipzor's team of two people focus on their core audience and develop a game plan to bring its technology to market later this year.

"It's a really big issue to tackle," Weber says. "There are a lot of different players."

Source: Mike Weber, president & CEO of Quipzor
Writer: Jon Zemke

Ann Arbor Coherix teams with Chinese firm, lands $12M in investment

The world just gets smaller and smaller and smaller. Ann Arbor's Coherix has taken on a Chinese investor to the une of $12M to help market their current technology and develop more products for their target industries.


"Xintai Electric is a new investor to Coherix. Based in Liaoning, the company specializes in the research, development, manufacture and sales of power equipment in China. Initially, the joint venture will focus on marketing the existing Coherix Robust 3D machine vision products to the automotive industry in China and throughout Asia. The product line will include Predator3D™, Robust3D™, Saber3D™ and ShaPix3D® systems. Coherix and Xintai Electric intend to expand operations into the semiconductor, precision manufacturing and aerospace markets as well as other industries. In addition, the companies jointly plan to refine the 3D machine vision products to better suit the needs of local markets."

Read the rest here.

Goodwill Industries opens new store, donation center in Ypsilanti

Goodwill Industries of Greater Detroit is opening its sixth store in Metro Detroit on Ypsilanti's Carpenter Road near Ellis Road. The new facility will offer options for both donations and retail with the idea of serving Washtenaw County residents.

"It's a brand-new building from the ground up," says Jim Kornas, vice president of growth and marketing initiatives for Goodwill Industries of Greater Detroit. "It's our first store in Washtenaw County."

Goodwill Industries of Greater Detroit is a non-profit based in Detroit’s North Corktown neighborhood. It focuses on helping provide job training, employment attainment, and similar opportunities for southeast Michigan's poor and working-class populations. One of its larger operations is its retail outlets. The stores not only help raise funds for the organization but provide retail jobs to people in its job-training programs.

"We provide that work experience so people can build a resume so we can essentially vouch for them to future employers," Kornas says.

Goodwill Industries of Greater Detroit's Ypsilanti store employs 22 people. It's 14,378 square feet sell everything from gently-used clothing to kids games to books. There is also a donation center on site.

"Ypsilanti is a great area for donations," Kornas says. "One of the things a store like our's needs is great donations."

Source: Jim Kornas, vice president of growth and marketing initiatives for Goodwill Industries of Greater Detroit
Writer: Jon Zemke

Millendo Therapeutics scores big VC round, Duo Security clocks record growth

A couple of tech startups in Ann Arbor are making a splash with some big headlines. Millendo Therapeutics reports that it has raised a $62 million Series B investment round, setting a new record for venture capital investment in Michigan. Duo Security also is reporting 200 percent revenue growth for 2015 over the previous year. Both are banner headlines for a couple of Ann Arbor’s most promising growth firms.

Millendo Therapeutics, formerly Atterocor, is a biopharmaceutical firm working on treatments for endocrine diseases. The University of Michigan spinout is focused on developing novel, disease-modifying treatments for specialty and orphan endocrine diseases caused by hormone dysregulation. It recently signed an exclusive license agreement with AstraZeneca for the worldwide development and commercialization rights to test a new compound for the treatment of polycystic ovary syndrome.

Millendo Therapeutics Series B investment round will fund clinical trials for that new compund and expand its testing of the drug ATR-101, a treatment for adrenal cancer patients. Among the investors in the Series B is the University of Michigan MINTS (Michigan Investment in New Technology Startups) program.

Duo Security also announced some big growth news in its recent revenue gains. The downtown Ann Arbor-based company specializes in providing cloud-based access security through two-factor authentication. Last sprung Duo Security launched its Platform Edition, which builds on two-factor authentication to offer cloud security and endpoint visibility.

Over the last year, Duo Security has doubled its customer base, serving a broad spectrum of companies and institutions including American Public Media, Duke University, DraftKings, and King.com, the makers of Candy Crush. Duo Security analyzed nearly 2 million devices with 1 million users, and handled nearly 2 million authentication events per day by the end of last year.

"It's all about ease of use and keeping our customers happy," Dug Song, CEO and co-founder of Duo Security, said in a press release. "We're passionate about continuing to be the most loved company in security. People are feeling the pain of the cumbersome security products and we're here to make it painless for them."

Source: Millendo Therapeutics and Duo Security
Writer: Jon Zemke

My Urban Hen brings hobby farming to Ann Arbor area locals

Ever want to own a chicken but don't know where to start? Or don't have the time to build a coop? Perhaps you live in a city and don't know whether owning a hen to lay fresh eggs every day is allowed?

A new Chelsea-based company believes it can provide the answers to these chicken questions and more. My Urban Hen plans to rent hens to urbanites in a turnkey fashion so they can enjoy their own fresh eggs.

"We always have friends who live in the city who say they always wanted to own chickens but couldn't," says Erin Zempel, co-owner of My Urban Hen. "It was too much work or they didn't know where to start."

My Urban Hen wants to help people satisfy that urge with minimal labor. The company plans to rent chickens to people chickens for a summer season, providing the chickens, coop, feed, and other intangibles so the customer can harvest fresh eggs each day. Zempel and her family will make the coops and provide the rest of the materials from their farm near Chelsea.

"We will bring everything you will need," Zempel says. "You will not need to go to the store at all."

Having your own chickens has become more popular with the rise of the slow-food and urban agriculture movements. More and more people have demanded the right to have a small coop to raise chickens and other small, low-impact farm animals. So much so that dense cities like Ann Arbor and Ypsilanti have amended their regulations to allow for it.

My Urban Hen will allow customers to rent two egg-laying hens for a $400 annual fee and four hens for a $500 fee. The customers not only get to keep the hens but the coop and a spring/summer/fall's worth of feed during the warm months from April to November. The hens get to return to the Zempel farm during the cold months. The customers also have the option of adopting the chickens and buying the coop.

An average, healthy hen lays an egg each day, so My Urban Hen's offerings could provide enough eggs for everyone from a single person to a small family. There are also other options, like providing the hens with organic or GMO-free feed for an extra charge. The company plans to offer the chickens in local cities that allow for chickens, like Ann Arbor, Chelsea and Ypsilanti.

Source: Erin Zempel, co-owner of My Urban Hen
Writer: Jon Zemke

Oxford Companies plan more murals as part of growth plan

Art is an afterthought for most real-estate companies. For Oxford Companies, it's a critical part of its business plan. The Ann Arbor-based company made a splash last year with the creation of one of the largest murals in downtown Ann Arbor. This year it's making plans to add two more significant pieces of public art in downtown. The idea is to raise both the quality of life in the city and the value of its real-estate portfolio.

"It (public art) is part of our core values," says Jeff Hauptman, CEO of Oxford Companies. "We are very much a part of the community. Anybody can be a landlord, but what are you going to do with it? ... How can we use our success to improve our community?"

What the two new murals will look like or where they will specifically be placed has not been released because the finer details about them are still being worked out. But Hauptman (a former chair of the Ann Arbor Art Center) did say they will go up in the area of State and Liberty streets.

"Our goal is to get another mural launched each year over the next few years," Hauptman says.

Oxford Companies has recently become the largest landlord in Ann Arbor. It manages more than 1,000 units of student rentals next to the University of Michigan. It invested a lot in upgrading the rentals, earning the designation of best landlord from The Michigan Daily last year.

The 18-year-old company also purchased $115 million in commercial real-estate in Ann Arbor last year, and refinanced another $50 million worth of local properties. That accounted for a 50 percent growth in its commercial holdings and the company is eyeing more this year. Oxford Companies also hired 10 people over the last year, expanding its staff to 60 people.

"We are focusing on improving out internal systems," Hauptman says. "We put a lot of emphasis on the people of our company. If we take care of our people and they are happy they will take care of our tenants. If our tenants stay then our investors are happy."

And at the center of that philosophy is making Ann Arbor a better place through public art.

"Art is important to us," Hauptman says. "Public art, if done well, can have a great influence on the community."

Source: Jeff Hauptman, CEO of Oxford Companies
Writer: Jon Zemke

Electronic music legends Kraftwerk to headline 2016 Movement festival

It's the dead of winter (19 degrees Fahrenheit at the time of this writing), but we at Model D just got got really excited for Memorial Day weekend, the unofficial kickoff of summer. That's because local event production company Paxahau just announced that legendary German electronic music pioneers Kraftwerk will be headlining this year's Movement Electronic Music Festival.
Kraftwerk has never played Movement, which is celebrating its 10th anniversary this summer, though they've performed in Detroit sporadically over the last 35 years. Listen to their first ever Detroit concert, which took place on July 25, 1981 at Nitro, a now-defunct club that was located in a shopping mall at Telegraph and Schoolcraft on the city's west side:

By all accounts, Kraftwerk's most recent Detroit show, which took place Oct. 6 at the Masonic Temple, was a real crowd pleaser. The Detroit News's Adam Graham described the performance, which involved audience members wearing 3D glasses, as "eye popping." According to a press release by Paxahau, Kraftwerk's upcoming performance at Movement will also incorporate 3D elements.
Detroiters who attended the October show's after party at MOCAD were treated to DJ sets by Detroit techno legends Kevin Saunderson, Juan Atkins, and Eddie Fowlkes, as well as a surprise appearance by Kraftwerk members.
Kraftwerk has often been cited by the pioneers of Detroit techno as a critical musical influence since the group's music was first introduced to Motor City audiences by the Electrifying Mojo, a legend of local radio. Members of Kraftwerk, meanwhile, were recently quoted in Rolling Stone as saying that they feel a "spiritual connection" to Detroit.
Movement is celebrating its 10th anniversary this year. Other acts scheduled to perform at the 2016 festival, which will take place at Hart Plaza in downtown Detroit over Memorial Day weekend (May 28-30) include Caribou, For Tet, Carl Craig, Kevin Saunderson, Juan Atkins, and more. Visit movement.us for details.
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