Big changes have taken place at Covaron Advanced Materials over the last year. The Ann Arbor-based startup has brought in a new CEO, raised a seven-figure Series A, and consolidated its investor circle to one person.
Covaron Advanced Materials
, formerly Kymeira Advanced Materials, is developing a new chemistry for ceramics. The new technology was developed by company founder Vince Alessi and co-founders Cam Smith and Reed Shick. The advanced ceramics formula makes ceramics a more affordable and streamlined option for a number of molds and durable goods, such as those uses in the automotive sector.
"We are a game-changing technology for a lot of industries," says Michael Kraft, CEO of Covaron Advanced Materials.
Which explains why it won the student portion of the Accelerate Michigan Innovation Competition
in 2012. And then the main competition at Accelerate Michigan in 2013. It also raised a $300,000 seed round from a number of local venture capital organizations, like Ann Arbor-based Huron River Ventures
and Invest Detroit's First Step Fund
"We had a lot of help from the Ann Arbor SPARK Business Accelerator Fund
," Kraft says.
Those investors are gone now. Kraft says a single investor who owns "a Michigan-based consortium of companies" bought out everyone else and provided the money for a Series A. Kraft declined to name the individual or the exact amount of the Series A besides saying it was in the "seven figures" and provide enough funding to grow the company for 24 months.
, a Michigan State University graduate, was recruited from California to serve as Covaron Advanced Materials' new CEO. He explains the plan is to focus on growing the company on a targeted application develop of its ceramics technology. The idea is to aim for a long-term growth cycle (similar to what life sciences startup go through) so it can maximize the use of its technology in several markets. Covaron Advanced Materials and its team of 10 people (all recently moved from independent contractors to full-time employees) plans to leverage the sole investor’s portfolio of firms to grow.
"We're in a consortium of companies that employs more than 1,000 people and has more than $150 million in capacity," Kraft says. "That gives you an idea of the support we have."
Kraft acknowledges this is a unique situation for a startup. There are no exit requirements or need to pump up artificial value or need to exit because a subset of the startup's investors needs to cash out. There is only the goal of growing a big business that could one day have its fingers in a lot of pies.
"We have choices," Kraft says. "We don't need to paint ourselves into a corner."
Source: Michael Kraft, CEO of Covaron Advanced Materials
Writer: Jon Zemke
Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.