News

Red Level Networks has watched its business grow in Novi by double digits and its staff has gone up significantly because of it.

The 8-year-old IT company now employs 26 people after hiring six in the last year, including promoting one intern to a full-time employee. The company currently has three open positions in sales, help desk, and engineering.

"We have added a significant number of new clients and new business," says David King, president of Red Level Networks. "It has really stretched our ability to service that with existing staff levels."

To accomodate that growth, Red Level Networks has expanded its office space in Novi, adding another 3,000 square feet to bring its total square footage to just less than 8,000. The new space give the company room to double its staff to up to 55 new employees, which the firm hopes to do within the next 2-3 years.

"We expect 20-25 percent growth ion 2013," King says. "We are preparing for that with our latest office expansion."

Source: David King, president of Red Level Networks
Writer: Jon Zemke

A Styrofoam-recycling business called Styrecycle is opening its doors in Hamtramck this month, making a hard-to-find green business easily accessible to Metro Detroiters.

At first Styrecycle will specialize in recycling Styrofoam products, employing a team of about half a dozen people at its facility at 3901 Christopher St. The 3-month-old company expects to extend its reach to other hard-to-recycle products this year, a move that could mean expanding its workforce to two shifts that employ a dozen people.

"We're going to build this into a recycling center for problematic things in the waste stream, like Styrofoam and plastic bags and packaging material," says Mark Haron, director of Styrecycle. "We're looking at recycling tires by the end of the year."

What to do with Styrofoam, also known as polystyrene foam, is one of the big issues for the waste-stream industry. It is not biodegradable and expands when it comes in contact with water. That means it can take up an increasing amount of space in a landfill and can be lethal to animals that consume it by choking them or blocking their digestive systems.

Polystyrene foam products (think Styrofoam cups or packaging foam) are hard to recycle because they are often as light as they are bulky, making the economics of storing and transporting the material difficult. That's why polystyrene foam products aren't normally a part of curbside recycling programs and there are only a small number drop off recycling centers in Michigan that accept Styrofoam. Haron believes Styrecycle is the first polystyrene-foam-specific-recycling business in Metro Detroit and one of only about a dozen he can find in the U.S.

Haron has worked in the waste-stream business in Hamtramck for 25 years, operating everything from a scrap yard to machine-recycling companies on the city's south side. Styrecyle is now accepting clean, industrial- and commercial-grade, polystyrene-foam products from 8 a.m. to 3 p.m. Monday through Friday. He expects to expand to all sorts of clean Styrofoam products (no food residue or tape) in a few months.

Styrecyle recycles polystyrene foam by putting it through a shredder and then sending it through a densifier. The densifier crushes the shredded Styrofoam into smaller, heavier blocks at a 50-1 ratio. Those blocks make storage and transportation of the polystyrene foam economical. Those blocks can then be broken down and recrafted into other plastic products, such as brooms, insulation or structural Styrofoam.

Styrecyle is in the later stages of testing out its equipment and processes. It plans to ramp up its operations by this spring.

"Our basic motto is go green and save green," Haron says. "We can save you money."

Source: Mark Haron, director of Styrecycle
Writer: Jon Zemke

The Avalon International Breads long-awaited expansion -- which has been in the works at various stages since 2008 -- is finally coming to fruition.
 
The nearly 50,000-square-foot Avalon City Ovens production bake house located in an old warehouse at 4731 Bellevue on Detroit’s East Side is celebrating its grand opening this Friday, Feb. 22 with an opening party with food, music, and tours of the facility. This event is free and open to the public.
 
This production facility will enable the popular bakery to expand its wholesale business so it can offer more products to more markets. In particular, Avalon owners will be expanding their offerings at Plum Market, which itself is expanding into Chicago, as well as at the national retailer Whole Foods, which is (as you may have heard) expanding into Midtown.
 
The expansion efforts go beyond the new wholesale production facility. Avalon International Breads will be vacating its longtime location at 422 West Willis and will open a much larger retail store with its own full bakery in-house at 441 West Canfield in Midtown. The new retail location will have 45 seats (compared to the current location's 15) and will feature an expanded list of menu offerings (including homemade soups) with extended hours and, eventually, a drive-through.
 
"Hopefully, we’ll be known as the place for breakfast in Midtown," says Ann Perrault, co-owner of Avalon. She also acknowledges the current location’s reputation as the number one place in Midtown to get a parking ticket and the overall difficulty of finding a parking space nearby, and of finding a place to sit inside once you finally park. "We’re hoping all of that will be easier (at the new location)."
 
This will enable them to also expand menu offerings at the café inside of the Henry Ford Hospital.
 
The bake house will be fully operational in March and they hope to be fully moved into the new Canfield retail location by the end of summer.
 
Source: Ann Perrault, co-owner of Avalon International Breads
Writer: Nicole Rupersburg

Paxahau moved from Ferndale to Greektown a year ago. In that time, it has hired six new people. Coincidence? The people behind the electronic music company don't think so.

"It's a very strong relationship between what we do and the city limits proper," says Jason Huvaere, president of Paxahau. "It's very important for us to be here. And we love being here."

Paxahau moved into 3,500-square-feet of office space above Flood's Bar & Grille in the Cronice & Slate Building, adjacent to the Blue Cross Blue Shield campus. Its 15-person staff organizes large events in the city and beyond, such as the Movement Electronic Music and Detroit Jazz festivals. That staff also includes dozens of interns during those events, which serves as a talent pipeline for the company.

"We hire a lot of our interns," Huvaere says. "We just hired two of them."

The company is currently working on rebranding Movement and redesigning the festival's layout to fit the changing contours of Hart Plaza. It's also working on enhancing its music technology to better capitalize on the music produced at its events.

Source: Jason Huvaere, president of Paxahau
Writer: Jon Zemke

When Skidmore Studio announced its move from downtown Royal Oak to the M@dison Building, the media heralded another company moving 20-plus jobs to downtown Detroit. A little more than a year later, the creative agency has hired another nine people and continues to grow.

"We are creatively finding places for people to be part of the team," says Tim Smith, president & CEO of Skidmore Studio.

The 54-year-old company serves as the anchor tenant for the M@dison Building, the eclectic hub for Quicken Loans Chairman Dan Gilbert's emerging downtown tech corridor being branded as Webward. Skidmore Studio and its team of 29 "creative souls" (as Smith describes his employees) occupy the fourth floor and have enough room to expand for the remaining five years of the firm's lease. Its most recent hires include a copywriter, video editors and a handful of graphic designers. Its newest hire occurred just last week.

Skidmore Studio has watched its workload grow primarily from new business coming from other downtown-area-based firms.

"It's being driven by Detroit-based companies," Smith says. "Not just M@dison Building start-ups but companies based elsewhere in the city. Companies like DTE Energy, Little Caesar's and the Detroit Tigers are knocking on our door and saying we want to work with you guys."

Source: Tim Smith, president & CEO of Skidmore Studio
Writer: Jon Zemke

When the M@dison Building opened in downtown Detroit in late 2011, Detroit Labs was one of the first start-ups to move in. Today the mobile app company has grown to the point where it's almost standing-room only in its office, prompting it to start building out its own office nearby on Woodward Avenue.

"We are out-growing our space like you wouldn't believe," says Paul Glomski, co-founder & CEO of Detroit Labs. "We're proud to say, 'We are the fastest-growing startup in Detroit.'"

Detroit Labs launched in May 2011 as one of Detroit Venture Partners' first portfolio companies. It started out creating custom mobile apps for the likes of Quicken Loans, Stryker and Chevrolet.  It has now taken on work for Domino's Pizza, a company that is almost as well known for its software innovation as its pizza. Glomski points out that Domino's pizza ordering app does about $4 million in business a week, and Detroit Labs is one of the key players in helping make that happen.

"They wanted to bring in a team that lives and breathes mobile day and night," Glomski says. He adds that Detroit Labs will continue to do custom work for big companies in 2013 but also expects to begin creating its own original apps this year. "We have a lot of areas we are looking at," Glomski says. "We have a lot of games we're working on. We have an app in the app store (called Koha) that helps people share bills (for things like groceries and going out to eat)."

All of this new work has prompted Detroit Labs to go on a hiring spree. It has doubled its staff to 32 employees and some summer interns. Glomski expects his staff to surpass 50 by the end of the year. That expansion has led the company to make the most of its 2,000 square feet in the M@dison Building, creating makeshift standing desks and even turning a treadmill into a work space.

Detroit Labs is building out its own space less than a block from the M@dison Building. Glomski declined to reveal the address but did say it's a building owned by Dan Gilbert and will measure out to 10,000 square feet. The new space will be similar to the unique nature of the M@dison Building and should be good to go within a few months.

"They're already swinging hammers and doing the actual build out," Glomski says. "It will be very unique. Our team is taking a sense of ownership to build out the space. It will be spectacular. It will be unique to Detroit Labs. It will be cool and collaborative. Every building Dan Gilbert and Bedrock (Gilbert's real-estate development company) do is unique and this will continue that trend."

Source: Paul Glomski, co-founder & CEO of Detroit Labs
Writer: Jon Zemke

AutoHarvest, the nonprofit focused on fostering collaboration and innovation in the auto industry, is prepping to launch a new software platform that the organization's leaders are calling the Amazon.com of intellectual property innovation.

The new marketplace for innovation will allow inventors, entrepreneurs, businesses and institutions to buy, sell and collaborate on technology. The eBay-like platform is currently in private Beta with about 1,000 participants. It expects to launch publicly later this year and expand to reach several thousands of users by the end of 2013.

"This lets people have a line of sight to an opportunity, whether it's a technology or a need," says Jayson Pankin, president of AutoHarvest. "That means the next Steve Jobs working in a garage can have that opporutnity to reach out and collaborate and transact."

AutoHarvest is 2 years old and has offices at TechTown in Detroit and at the University of Michigan in Ann Arbor. It has a staff of six people, including a rotation of fellows from local universities. These fellows, ranging from undergrad to MBA students, work at AutoHarvest for several months before rotating into the automotive/tech industries. So far about a dozen fellows have gone through the program.

Source: Jayson Pankin, president of AutoHarvest
Writer: Jon Zemke

Rockbridge Growth Equity has expanded its staff by four people over the last year as the private-equity firm makes both a successful exit and acquisition.

The downtown Detroit-based company has hired two investment professionals and two operations professionals, expanding its staff to 13 people. "We're looking to add two more investment professionals and one more operations professional," says Kevin Prokop, founding partner with Rockbridge Growth Equity.

That growth comes after the 5-year-old company has deployed about $250 million in its lifetime, including investing $50 million in 2012. One of its investments is in One Reverse Mortgage, which Rockbridge Growth Equity held a stake in with Quicken Loans. It sold its stake in One Reverse Mortgage to Quicken Loans last year after helping One Reverse Mortgage grow to the become what Prokop calls "the largest reverse mortgage company in the world."

Rockbridge Growth Equity also recently made an investment in Triad Retail Media, an online advertising firm based in Tampa. "It's a fast growing company in a fast growing industry," Prokop says.

Source: Kevin Prokop, founding partner with Rockbridge Growth Equity
Writer: Jon Zemke

Michigan Business Challenge sent out $62,000 in seed capital this week to a broad range of start-ups being led by University of Michigan students. That cash was accompanied by another $50,000 in seed capital from the Dare to Dream program.

Both programs are part of the Zell Lurie Institute for Entrepreneurial Studies at the university's Ross School of Business. The grants, ranging from $200 to $10,000, is provided by donations from alumni like the Mayleben (Dare to Dream sponsor) and partners who sponsor the awards, such as the $2,500 Marketing Award sponsored by Mark Petroff. That money is often the spark that accelerates the growth of these start-ups.

"It gives them extra motivation," says Sarika Gupta, program manager for the Zell Lurie Institute for Entrepreneurial Studies. "Its validation of the idea and the business."

Among this year's winners are:

- Focus, a combination device and application for physical therapy and training, won the Pryor-Hale Award for Best Business for $20,000.
- Exo Dynamics, an ergonomic support device that enables healthcare practitioners who experience back problems to perform at their best in the operating room, won the $10,000 Pryor-Hale Runner up and the $5,000 Williamson Award for Outstanding Business & Engineering Team
- Torch Hybrid, a software service provider for marine hybrid-electric powertrain development and energy management, won $2,000 for Best Written Plan and the $2,500 Marketing Award sponsored by Mark Petroff
- Centricycle, a non–profit working to improve healthcare in rural India through the implementation of sustainable diagnostic technology and education, won $7,500 from the Erb Award for Sustainability

Source: Sarika Gupta, program manager for the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan
Writer: Jon Zemke

Warmilu, the start-up creating a better blanket for infants, is now running a pre-clinical trial of its product. The Ann Arbor-based company is prepping for clinical trials later this year and commercialization in 2014.

"This is the first time it has been tested on infants, and it works," says Grace Hsia, CEO of Warmilu (formerly M-Wrap).

Hsia and her team of eight people (mostly University of Michigan students and recent graduates) launched the company last spring. The idea is to help premature infants retain and increase their body heat, which helps improve their rate of survival. The blankets would be used both in hospitals and homes.

Warmilu is targeting low-income groups with this blanket. Think families living below the poverty line in the first world or in third-world countries. Members of Warmilu have already taken an exploratory trip to India and is planning on a follow-up trip later this year.

Warmilu is also beginning the process of raising angel round to fund the clinical trials of the blanket. The group is aiming to secure $20,000 for the clinical trials this year.

Source: Grace Hsia, CEO of Warmilu
Writer: Jon Zemke

From Duo Security's launch in 2010, the Internet security start-up was built to scale. This is the year the downtown Ann Arbor-based company begins to accelerate its growth.

Duo Security specializes in creating two-factor authentication software, which enables its users to use their mobile phones to secure their logins. The idea is to add another layer of protection against account takeover and data theft for companies.

"These days passwords are not enough to really protect anything," says Dug Song, co-founder & CEO of Duo Security.

The market for Duo Security's software has a high ceiling. The company has watched its revenue grow by 400 percent over the last year as its customer base has doubled to more than 1,000 clients. Some of those users include a variety of big brand names ranging from Fortune 500 companies to large research institutions. Song declined to publicly name those firms.

"Probably half of our customers are first-time customers of two-factor," Song says. "We are helping grow the two-factor market."

That growth has allowed Duo Security to more than quadruple its staff to just under 50 people. To accommodate its growth, the firm moved from the Tech Brewery to a newly refurbished office on the northern edge of Kerrytown. It now occupies most of the 10,000 square feet of space there, which it is currently working to fill out. Duo Security currently has five job openings and expects to hire 10 new people in total by the end of the first quarter.

"We have grown pretty quickly," Song says.

Source: Dug Song, co-founder & CEO of Duo Security
Writer: Jon Zemke

SkySpecs has taken another top prize in local business plan competition and tens of thousands of dollars more in seed capital with it.

The downtown Ann Arbor-based start-up recently took the top prize worth $50,000 at the Michigan Clean Energy Venture Challenge. It also took third place in the student portion of the Accelerate Michigan Innovation Competition, worth $10,000.

The company, founded by University of Michigan students, is developing unmanned aerial vehicles that use artificial intelligence to gather data in hazardous locations, such as collecting structural data in hard to reach places under bridges.

A2B Bikeshare, another U-M student-led start-up, took second place at the Michigan Clean Energy Venture Challenge. The showing was worth $15,000 in seed capital for the bike-sharing start-up.

The Michigan Clean Energy Venture Challenge is a business plan competition co-founded by the University of Michigan and DTE Energy. The competition, in its fifth year, aims to serve as a springboard for Michigan's college students to launch sustainability-oriented start-ups. This year it attracted participants from a broad range of colleges across the Great Lakes State, including Michigan State University and Western Michigan University.

"We were able to reach across the state," says Amy Klinke, assistant director at the University of Michigan's Center for Entrepreneurship. "We had 70 teams apply this year."

Source: Amy Klinke, assistant director at the University of Michigan's Center for Entrepreneurship
Writer: Jon Zemke

CareCheq is a start-up with one of the most valuable of commodities, paying customers.

The 1-year-old firm is creating technology that offers clear and efficient channels of communication people taking care of elderly patients. It allows users to create profiles and groups that can be edited and made private. Stepaniak points out that things like Facebook aren't exactly compliant with health-care regulations.

"We made a lot of progress," says Dennis Stepaniak, CFO of CareCheq. "There is a long ways to go but we are much better with the platform."

CareCheq currently has six employees which are handling the demands and needs for a handful of customers (he declined to name them). The start-up is building out its platform to fit the needs of these initial customers with the hope it will lead to many more within the next year.

"The biggest potential play we have is to get in with bigger players and license the product to them," Stepaniak says. "That's what our first three customers have been all about."

Source: Dennis Stepaniak, CFO of CareCheq
Writer: Jon Zemke

Merck is re-upping with Lycera, forming a second strategic partnership with the Ann Arbor-based biopharmaceutical startup that could bring the total investment between the two firms of nearly $600 million.

Lycera is working to develop new autoimmune disease drugs that will help treat things like rheumatoid arthritis. It landed its first strategic partnership with Merck (worth $295 million in research investment) in 2011, which focused on therapies targeting the retinoic acid related orphan receptor.

The second partnership, announced this week, is distinct from the first partnership deal because the firms will spend up to $300 million to discover, develop and commercialize small-molecule therapies directed to selected novel targets being investigated for the treatment of a broad range of immune-mediated disorders.

"The validates Lycera as the partner of choice," says Kathleen Metters, president & CEO of Lycera. "It was built on a very successful first collaboration (between Lycera and Merck)."

Lycera is based in the North Campus Research Complex at the University of Michigan (formerly Pfizer's Ann Arbor campus) where it has a staff of 22 employees and a handful of interns. It has hired three people over the last year, including a chemistry project manager. These hires are strategic and often represent people relocating to Ann Arbor. Metters expects to continue making those sorts of strategic, high-end hires throughout this year.

Lycera is also looking to continue its research into its proprietary products, which are independent from its partnerships with Merck, and develop new technologies in the autoimmune disease sector.

"This is a very important area to continue investment in," Metters says.

Source: Kathleen Metters, president & CEO of Lycera
Writer: Jon Zemke

Tissue Regeneration Systems is close to announcing its Series B round of fundraising, an infusion of seed capital that is expected to be worth between $2 million and $2.5 million.

The nearly 5-year-old medical device start-up is commercializing a skeletal reconstruction and bone regeneration technology. The University of Michigan spin-out is going for initial FDA approvals for its technologies and hopes to score those approvals within the next year. It also has scored a $1 million grant from the National Institute of Health.

"We believe that achieving these objectives puts the company in position to raise larger amounts of capital," says Jim Fitzsimmons, president & CEO of Tissue Regeneration Systems. To really build the company we need to raise sufficient capital."

The company is predominantly a virtually based firm but has offices in both Ann Arbor and Seattle. It has a team of five employees and the occasional intern. Three members of its team are based in Ann Arbor.

Source: Jim Fitzsimmons, president & CEO of Tissue Regeneration Systems
Writer: Jon Zemke