Michigan UP Manufacturer Secures Funding of $2.8M to Advance Production Technology of FRP Rebar

Friday, May 1, 2015

MISBDC Success Story

Early-stage manufacturer Neuvokas Corporation, in Michigan’s Upper Peninsula (UP), has secured over $2.8 million in funding to develop a new technology. This new technology is capable of producing Fiber Reinforced Polymer (FRP) rebar used in the construction industry. The funding will also support job creation and on-the-job training for new employees over the course of the next two years.

Neuvokas makes FRP rebar under the trademarked name – GatorBar™. This product is made through a novel manufacturing process of combining fiber with a matrix resin. The method used to produce GatorBar provides a more efficient way to manufacture a, rust-free rebar product with an extended service life of up to 20 times the current standard (steel) with cost savings on labor and freight. GatorBar also enables a 30% reduction in concrete usage and less CO2 emissions. The product is at or near price parity with black steel – a task that has eluded FRP manufactures for over 30 years.

“My experience in manufacturing and process development allowed me to recognize an opportunity to make an existing product more efficiently,” said Erik Kiilunen, CEO of Neuvokas Corporation. “Using the improved controls and raw materials available today we’ve increased process speed for FRP rebar 3x already and have a 15x increase projected within 6 months.”

Initially the company raised $1.2M private equity. It was followed by $45K in services from the Small Business Development Center’s (SBDC) Business Accelerator Fund (BAF) through the MTEC Smart Zone. The BAF services helped the company meet important investor milestones. Then the National Science Foundation (NSF) provided a $150K Phase I Small Business Innovation Research (SBIR) grant, which was matched by a $25K Emerging Technologies Fund (ETF) grant from the SBDC. (The SBDC’s BAF and ETF are managed in partnership with the MEDC.) A $30K NSF SBIR Phase IB grant was also received. The University of Michigan’s (U-M) Institute for Research on Labor, Employment, and the Economy (IRLEE) program provided a $25K grant. The Michigan Corporate Relations Network (MCRN) provided a $40K grant. A Community Development Block Grant (CDBG) of $275K was received through the Township of Allouez (Keweenaw County) and the Michigan Strategic Fund. The U.S. Office of Energy Efficiency and Renewable Energy (EERE) provided $40K in grants and a $350K unsecured note. In addition to these funds, the company recently closed on a $1M Series “A” extension bringing the total raised over $2.8M.

Located in the far reaches of Michigan’s UP, Neuvokas Corporation was founded in 2013 by Erik Kiilunen and Ken Keranen. Neuvokas runs out of the former Rensen Manufacturing facility in Keweenaw County, which the company renovated with state of the art equipment and machinery. The team at Neuvokas has now grown to 5 with plans to add another 30+ employees over the next two to three years as the company scales production.

“I can’t take all the credit for our success,” shared Kiilunen. “I’m blessed to have a strong team behind me that includes my wife and family, our employees, outstanding investor partners, and numerous supporters from groups like the SBDC, Cleantech Open, and NextEnergy.

Kiilunen shared their early success was fueled by what he and Keranen learned in the five-month Accelerator program from the Cleantech Open, which also earned Neuvokas a Sustainability Award at the 2014 Midwest Cleantech Open. He also recognized Dan Radomski from Next Energy for helping the company secure the EERE funding and Arcadio (Kayo) Ramirez from the Michigan Small Business Development Center (SBDC) for helping them secure some of the funding as well and providing assistance in building a business model suited best for Neuvokas.

In working with the Michigan SBDC, Kiilunen received no-cost counseling and hands-on support from a handful of Business Consultants across the Michigan SBDC network. The assistance included support with developing a strategic business plan, building a business/financial model, making critical introductions to potential investors, assistance in writing SBIR/STTR proposals, and preparing an investment roadmap.

Neuvokas Corporation is the manufacturer of GatorBar™, a Fiber Reinforced Polymer (FRP) rebar used primarily in the construction industry. Headquartered in Ahmeek, MI, the company brings advanced engineering and materials science to manufacture industry-leading solutions for construction. For more details, visit www.neuvokascorp.com.