News

The Renaissance Venture Capital Fund is making its first investments in its second investment vehicle, worth $60 million, over the last year.

The downtown Ann Arbor-based venture capital firm also has an office in downtown Detroit, has invested $3 million of it second fund so far. The first recipient is Allos Ventures, a venture capital firm with offices in Indianapolis and Cincinnati.

"They have been pretty active in looking for deals in Michigan," says Chris Rizik, CEO of Renaissance Venture Capital Fund.

Renaissance Venture Capital Fund is a fund of funds, which is primarily used to invest in other venture capital funds that will in turn invest in individual companies. The Renaissance Venture Capital Fund invests in VCs that are looking to invest in Michigan-based start-ups. The 5-year-old fund of funds, which has derived its capital from private sources, launched with a $50 million fund. It closed on a $60 million fund last year.

When the Renaissance Venture Capital Fund launched it deployed its capital relatively quickly to meet pent up demand. Rizik expects the deal flow to even out a little more in coming years with his company making $15 million to $20 million investments

"Now it's sort of a steady flow," Rizik says. "There is no backlog. We will invest this in a steady fashion."

Source: Chris Rizik, CEO of Renaissance Venture Capital Fund
Writer: Jon Zemke

Ingenex Digital Marketing's recent growth curve might rest on the new economy of website design and Internet marketing, but it's building its company on some age-old business ideas, like word-of-mouth referrals.

It has tackled website redesigns in the last year for some major players in Michigan, including Cranbrook.edu and Aiag.org. The downtown Ann Arbor-based company wants to continue taking on some more major institutions in the Great Lakes State as clients, but it's going to be choosy.

"We don't want too many clients," says Derek Mehraban, CEO of Ingenex Digital Marketing. "We want clients that are progressive and want to do smart things online." He adds the idea behind this line of thinking is to take on more clients who are interested in long-term work in building their online brands.

Ingenex Digital Marketing has also grown its staff to seven employees and four interns. The 7-year-old company has hired four people in the last year, including a new client-experience manager, account manager, social media director and Google search specialist. The firm is also looking to hire a web developer right now.

"We just do a lot of websites," Mehraban says. "We need more people."

Source: Derek Mehraban, CEO of Ingenex Digital Marketing
Writer: Jon Zemke

Gema Diagnostics recently landed an investment from the Pure Michigan Venture Match Fund, which is part of a $2 million Series B round of venture capital the bio-tech start-up expects to close on later this month.

Gema Diagnostics raised $625,000 in a Series A round when it launched in 2006, licensing technology from Michigan State and Yale universities. Its most recent round of seed capital comes from North Coast Technology Investors (which led the round), the First Step Fund and the Blue Water Angels.

"It will be for a pivotal clinical trial to get the company's product to market," says Dave Repp, president & COO of Gema Diagnostics.

Gema Diagnostics is developing technology that will help improve the odds of a successful in vitro fertilization. "Our tool will help clinicians figure out which of a woman's eggs is the best to fertilize," Repp says. "No other non-invasive technology can do that."

Repp expects the final clinical trial to take six months and wrap up later this year, which should prompt the two-person start-up to expand its staff. Commercialization could begin by the end of the year.

Source: Dave Repp, president & COO of Gema Diagnostics
Writer: Jon Zemke

The Coil Group, a combination marketing and mobile app firm, is sinking roots in downtown Rochester.

The 10-month-old company was working from coffee shops and home offices of its founders, Jim Brown and Jon Pielak, in Rochester until it scored a small office in the city's central business district. Brown and Pielak have been looking at office space in downtown Royal Oak and Detroit but choose Rochester because of the dynamic downtown and easy access to free parking.

"The downtown is vibrant," says Brown, president of Coil Group. "There are lots of great restaurants and coffee shops. We thought the small urban setting would be great for people who would want to work for us."

The Coil Group specializes in providing both mobile apps and traditional marketing services to mid-size businesses. The company's bread and butter is having expertise in both niches. A small mobile app start-up might not have marketing expertise, or a marketing firm might be lacking in mobile app knowledge.

That business plan has allowed the Coil Group to grow to 10 people and it is looking at adding interns this summer. It has experienced most of its early growth from word-of-mouth referrals from some of its first projects.

"We have built a network of relationships across the state of Michigan," Brown says. "That has opened a lot of doors. A lot of people have embraced us."

Source: Jim Brown, president of Coil Group
Writer: Jon Zemke

Bizdom, the entrepreneurial education program, has gotten one of the up-and-coming startups in Cincinnati to relocate to downtown Detroit. The husband-wife-and sister team behind Canopi executed the move to the M@dison Building early this year to become a part of the most recent Bizdom class.

"We decided to pick up and move," says Erin Flynn, president & chief content officer for Canopi. "In a matter of 3-4 weeks we sold our home and moved up here."

Erin Flynn and her husband, Colin, and her sister-in-law, Amy, are the core of the six-person team behind Canopi and now new residents of downtown Detroit. Erin Flynn got her start in 2009 as the creative force behind the fashion blog, RealityChicBlog.com. That inspired her to find better ways to create connections between readers and blogs, which turned into Canopi. The 1-year-old Internet start-up specializes in connecting readers with new blogs and connecting those blogs and readers with brands launching advertising campaigns.

"I saw this triangle between readers, brands and bloggers," Erin Flynn says. "That's where we came up with the idea of Canopi." She describes her job as taking "the work out of finding great blogs."

The Canopi team will spend the next few months going through Bizdom's educational program and building its startups in M@dison Building. Erin Flynn is planning to begin fundraising for a seed capital round later this year.

Source: Erin Flynn, president & chief consultant Canopi
Writer: Jon Zemke

DeepField is planting its flag on West Liberty in downtown Ann Arbor, claiming new office space where it can call the likes of Menlo Innovations, Barracuda Networks, and Google as neighbors.

"It's an incredible pool of talent and energy," says Craig Labovitz, CEO & co-founder of DeepField. "It's incredibly close to the university and the growing pool of tech talent."

The 1-year-old start-up got its start in the Tech Brewery on Ann Arbor's north side. That is where the company has done much of the work to develop software that enables large corporations to adapt to the ever changing world of the Internet's back-end IT infrastructure. It raised $1.6 million in venture capital last year to develop its technology.

DeepField's technology is now deployed in some large companies (Labovitz declined to name which ones) in North America, Europe and South America. "We're seeing a large part of the consumer Internet traffic in the United States," Labovitz says. Naim Falandino, chief data scientist for DeepField, adds, "We are in all segments of the market now."

DeepField recently hired two people, bringing its staff to nearly 15. The growing staff meant it had to sign a two-year lease for a new office space downtown to make room for the new hires. DeepField currently has five job openings and expects to make another 10 hires later this year.

Source: Craig Labovitz, CEO & co-founder of DeepField and Naim Falandino, chief data scientist for DeepField
Writer: Jon Zemke

Campus Commandos has watched its revenue grow five fold, its client base triple and its staff double as the company continues to grow across the U.S.

The advertising agency for college students now has a staff of four people and more than 100 representatives at universities across the U.S. It has hired two people over the last year and now calls the Chrysler House in downtown Detroit home.

Campus Commandos has taken on a number of clients, including eBay and Hewlett Packard. For Hewlett Packard, Campus Commandos helped coordinate its online marketing efforts for calculators. Those efforts helped raise the online sales for the 50G calculator by 60 percent.

"We said, 'What is the only approved cheating tool on a test?' It's a calculator," says Adam Grant, CEO of Campus Commandos. "We can't use a word like cheating with the brand so we used 'personal exam assistant.'"

Grant has been working in the college student advertising arena since he was in college at Michigan State University in the mid-2000s. He went through the Bizdom entrepreneurial curriculum in 2009 and has turned Campus Commandoes into a growing business since then.

Source: Adam Grant, CEO of Campus Commandos
Writer: Jon Zemke

Mobile-app start-up Larky has publicly launched its newest app and is growing its small staff to make it a success.

The downtown Ann Arbor-based company is creating an app that helps consumers maximize their membership perks and loyalty programs. The app alerts them when they are eligible for savings or discounts through things like alumni association memberships.

Many of these reward programs are highly underutilized because of consumer ignorance or forgetfulness of their existence. Larky's technology looks to remind consumers of these perks at the point of purchase. So far, 10 major organizations with access to 50 million consumers have signed on and Larky is looking to lock down a few thousand more in the next few months.

"We built this to be used on a very large scale," says Gregg Hammerman, co-founder of Larky. "We are proud to be based in Michigan and to have Michigan partners, but we want to scale to millions of members."

Larky landed $650,000 in seed capital earlier this year. It has a staff of three full-time employees and another three part-timers. The full-time employees include the company's two co-founders and one Adams Entrepreneur Fellowship Program fellow.

"He has been enormously helpful," Hammerman says. "He has helped us grow a lot."

Source: Gregg Hammerman, co-founder of Larky
Writer: Jon Zemke

When Search Optics went looking for a place to set up shop in the eastern half of the U.S. to take advantage of the automotive Internet marketing space, no place made as much sense as Metro Detroit.

"The people in Detroit are intrinsically tuned to what's going on in the automotive industry," says Christian Fuller, executive vice president of Search Optics. "Everybody bleeds a little oil here."

The San Diego-based company now has more workers in its growing downtown Ferndale office than its west coast home and Toronto satellite office. Search Optics opened its office in downtown Ferndale two years ago and it now has 55 employees and a couple of interns there.

It has hired more than 30 people over the last year, prompting it to expand its space. It currently operates out of the first floor of a loft-style office and is building out the second floor of the building to accommodate its growing staff. Fuller expects the Detroit office to grow to 100 people within the next year.

"In the last year we have almost doubled our business," Fuller says. "We have been absolutely elated with the quality of people who have filled positions here in Detroit."

Source: Christian Fuller, executive vice president of Search Optics
Writer: Jon Zemke

Doodle Home is growing in more ways than one. The interior-design startup has not only hired 14 people over the last year but it's starting to grow into two distinctive parts.

The downtown Detroit-based startup calls the M@dison Building home, and got its start providing a software platform for interior designers that facilitates both manufacturers looking to sell product and designers looking to create the perfect living space. Doodle Home has also been landing more and more commercial interior design work, prompting it to start a Doodle Commercial division.

"It just started growing to the point that we started hiring people for Doodle Commercial and started separating the two," says Fernando Prieto, president of Doodle Home.

Doodle Home is part of the Quicken Loans family of companies. It has tackled a number of interior commercial projects in the downtown Detroit area that are part of Quicken Loans family of companies' buying spree, such as the M@dison Building and the Roasting Plant coffee shop.

Doodle Home now employs 23 people and just opened more office space in the Chrysler House, formerly the Dime Building.

Source: Fernando Prieto, president of Doodle Home
Writer: Jon Zemke

As the healthcare industry continues to evolve, one Ann Arbor-based company is capitalizing on the trend by staying ahead of the communication curve.

CareEvolution creates software that allows one hospital's data center to speak to another's, facilitating a sharing of electronic medical records and information that streamlines patient care.

"We help hospitals exchange information with one another or doctors with hospitals," Kheterpal says.

That process has become more complicated with new federal regulations in legislation like the Affordable Care Act (AKA Obamacare), prompting companies like CareEvolution to step into the breach.

"Much of what we do has come into sharper focus," says Vik Kheterpal, principal of CareEvolution. "That has fueled our growth."

That growth includes 15 new hires at CareEvolution, bringing the 10-year-old company's staff to 50 employees and a few interns. Kheterpal expects to hire another 15-17 people over the next year. That is being prompted by 60-percent-plus revenue growth.

"We expect to grow faster than that in 2013," Kheterpal says.

Source: Vik Kheterpal, principal of CareEvolution
Writer: Jon Zemke

Backyard Brains insect neuroscience kits can not only be found across the U.S. this year, but also on the other side of the world. The Ann Arbor-base company is now exporting its products to a number of South American countries, thanks to an entrepreneurship program in Chile.

Chile is going through an economic boom thanks to exports of natural resources. The government is using these good times to help spur more entrepreneurship through things like its StartupChile program, which brings in entrepreneurs from around the world to help inspire more business creation. Backyard Brains won one of the start-up grants and used it as a bridge to help spread its product sales to Chile and several other South American countries.

"It's been great," says Tim Marzullo, co-founder of Backyard Brains. "We have actually received another round of funding from the Startup Chile program. We have been going back and forth from Chile for the last year."

Marzullo and his partner Greg Gage, both neuroscientists, started Backyard Brains three years ago as a way to provide a cost-effective product that teaches grade-school students the workings of neurons in the brain. Its Robo Roach allows them to control insects via antennas. Since then the company has expanded to a team of nine and the occasional intern after adding five new positions in the last year.

Backyard Brains initially received a National Institute of Health grant for start-up funding. It is now angling for a second round grant from the National Institute of Health and otherwise using sales of its products to fund its growth. Backyard Brains' products can now be found in all 50 states and on all seven continents after sales from its Chile distribution made it ways to Antarctica.

"We are pretty well-known as the go-to company in the neuroscience equipment field,"  Marzullo says.

Source: Tim Marzullo, co-founder of Backyard Brains
Writer: Jon Zemke

Home-entertainment-start-up iRule is the newest Detroit Venture Partners' portfolio company.

The downtown Detroit-based venture capital firm led a Series B round of investment in iRule worth $1 million. Compuware Ventures, the namesake company's VC arm, made the initial investment in iRule last year in its $500,000 Series A round. The rest of the investors in the Series B round are all local.

"We have some pretty good partners in the area," says Itai Ben-Gal, CEO of iRule.

The 4-year-old company creates an app and accompanying technology that allows users to turn their smartphone into a universal remote for their home theater system. Ben-Gal and Victor Nemirovsky launched the company as a side project from their living rooms in Oakland County. The business quickly created a foothold in the home entertainment center enthusiast community, which garnered the attention of Compuware, a subsequent investment and a move to the tech firm's downtown headquarters.

Thirteen people now work for iRule, which is interviewing for summer interns. The company has hired seven people over the last year, including two software developers this month. The newly expanded team is working to make iRule's core home entertainment center technology even smarter so it can control all electronic facets of a home, such as lights and the thermostat.

"We're creating an interactive solution for everything in your home," Ben-Gal says.

Source: Itai Ben-Gal, CEO of iRule
Writer: Jon Zemke

Accent Reduction Institute could have moved wherever it wanted last year when Menlo Innovations, which it shared office space with, relocated from its Kerrytown headquarters closer to the University of Michigan's campus. Instead, the 7-year-old company found another office in downtown Ann Arbor.

"This is home to us even though north of 98 percent of our clients are outside of southeast Michigan," says Judy Ravin, president & founder of Accent Reduction Institute. She adds that she and her executive team "love Ann Arbor. We are three University of Michigan graduates. We feel really connected to the community. It's a wonderfully business community."

Accent Reduction Institute's close ties to U-M were a major reason for it staying nearby. The university serves a pipeline of talent for the company, mostly in the form of interns. Accent Reduction Institute has hired three of its former interns over the last year, expanding its staff to 20 people and 3-4 interns each year.

"Our interns provide a wonderful pipeline for other interns," Ravin says. We get fantastic people to work with."

The Accent Reduction Institute provides accent reduction training programs for non-native English speakers so they can carry on communication seamlessly. It also develops English pronunciation software to help people eliminate language barriers while maintaining their unique cultural identity. Menlo Associates, the holding company for Menlo Innovations, is still a major investor.

Ravin points out that the talent gap for major companies is driving the Accent Reduction Institute's recent growth. She explains that as more baby boomers retire the company's are scrambling to find their best talent to replace them in the workforce. That in turn is prompting Accent Reduction Institute to add to its staff. It is currently looking for up to two more linguistics professionals.

Source: Judy Ravin, president & founder of Accent Reduction Institutue
Writer: Jon Zemke