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North Coast Technology Investors start off year with big exit

One of Ann Arbor's venture capital staples officially scored a big exit early this year, and chances are you haven't heard about it.

NTT Communications
, a Tokyo-based multinational corporation, acquired Denver-based Virtela Technology Services for $525 million. The deal was finalized in January, and Ann Arbor-based North Coast Technology Investors was one of the early investors in Virtela Technology Services.

"These don't happen everyday," says Hugo Braun, partner with North Coast Technology Investors. "We're pretty excited about it."

The 15-year-old venture capital firm is currently in the midst of deploying its third investment fund worth $30 million. North Coast Technology Investors' team of three people have made nine investments from the fund and recorded two exits. The other exit was Ford's acquisition of Ferndale-based Livio last fall.

"We're still in investment mode," Braun says. "We have half of our money left in our fund. Some of it is committed to other investments but we think we will make a few more this year."

One of its most recent investments is in VNN, formerly Varsity News Network, which recently raised a $3 million Series A round. The Grand Rapids-based startup is pushing forward a collaborative effort between traditional and community sports journalists to provide media coverage for every high school sport. It took first place and $500,000 in seed capital in last fall’s Accelerate Michigan Innovation Competition.

Source: Hugo Braun, partner with North Coast Technology Investors
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.

Olark moves to bigger downtown Ann Arbor office

Olark is moving to bigger digs in downtown Ann Arbor as the spring officially begins in Michigan.

The software startup creates a messaging platform so businesses and their customers can connect online faster and with fewer headaches. It was launched in Ann Arbor and is upgrading its space from 1,000 square foot office to a 1,500-square-foot office with much better conference rooms at 205.5 S Main St.

"We were playing musical chairs with our conference rooms," says Zach Steindler, chief olarchitect at Olark. "One person would step out and another would go in."

Conference room space is critical to Olark because the startup's employee base is becoming more remote-based. Olark has gone from a staff of 12 people at the beginning of 2013 to 25 today. It has two primary offices in Ann Arbor and Silicon Valley where half of its employees work. The other half work remotely around the world.

Olark has hired three people so far this year. It also has four open positions in office administration, web development, senior UIX engineer and senior mobile engineer. More info about those openings can be found here.

"We're all excited to keep growing our organization," says Steindler, who is also one of the organizers of A2 New Tech Meetup. "We might slow down a little bit, but we're definitely excited to keep growing."

Olark has bootstrapped its way to this point. It hasn’t accepted any sort of seed capital from outside angel investors or venture capitalists and it doesn’t plan to anytime soon.

"All of our growth comes from our customers," Steindler says. "We're very happy to continue growing our company organically."

Source: Zach Steindler, chief olarchitect at Olark
Writer: Jon Zemke

Beringea recruits modern music college to Detroit with $3M investment

A trio of musical entrepreneurs are crossing the Atlantic Ocean and setting up shop in Detroit, thanks in part to the encouragement and investment from Michigan's largest venture capital firm.

Beringea is investing $3 million in the Detroit Institute of Music Education, a music college for contemporary musicians set to be launched this fall. Sarah Clayman, Bruce Dickinson and Kevin Nixon launched Brighton Institute of Modern Music in Brighton, England, in 2001. They sold the business in 2010 and were recruited by executives at Beringea to open a U.S. version in Detroit.

"It was a really easy sell," says Charlie Rothstein, founder & senior managing director of Beringea. "They were getting there on their own. Everything that is happening in Detroit is saying loudly to open up here."

Detroit Institute of Music Education, commonly known as DIME, will open up in 15,000 square feet of one of Bedrock Real Estate Services' buildings in downtown Detroit. The company will offer lessons in playing instruments and musical entrepreneurship. Initial projections call for 150 students in the first class, with a goal of up to 1,000 students in future classes. The business is already looking to hire up to 30 instructors and support staff for the venture.

Detroit Institute of Music Education picked Detroit over other major markets like New York, Los Angeles and Chicago because of the Motor City's impressive musical culture and the warm welcome from regional business leaders like Rothstein and Quicken Loans Chairman Dan Gilbert.

Source: Charlie Rothstein, founder & senior managing director of Beringea
Writer: Jon Zemke

Michigan First Credit Union aims to add 17 jobs

Michigan First Credit Union is in the process of hiring another 17 people right now, including a new spokester for its Young & Free Michigan program.

The Lathrup Village-based credit union currently employs 247 people across six stand-alone branches, plus three more in Meijer stores. It is replacing a branch on Gratiot Avenue, which is expected to open this fall. Michigan First Credit Union has hired 17 people over the last year. Its new positions range from IT professionals to branch operations. For information on those jobs, click here.

Among the new positions is the credit union’s spokester job for its Young & Free Michigan program. The 3-year-old program employs one college student for a year, making the person the credit union’s spokester. The spokester engages local college students through social media, community events, blog posts and online videos. The idea is to encourage smart financial behavior and help attract more young people to the credit union.

"The year goes by so fast," says Vicky Goldwater, young & free Michigan spokester for Michigan First Credit Union. She worked as a waitress and studied communications at Macomb Community College before taking the position. "The experience was awesome."

Michigan First Credit Union is taking applications for this year's spokester. The position comes with paid gas and insurance. Applicants are expected to make a video when applying. More info can be found here.

"Have fun with the video," Goldwater says. "Be yourself."

Michigan First Credit Union has about 94,300 members in Michigan, which is up more than 4,000 since the beginning of 2013. It has added $30 million in assets in the last year, totaling $674 million.

Source: Vicky Goldwater, young & free Michigan spokester for Michigan First Credit Union
Writer: Jon Zemke

EcoMotors acquires Katech, plans to add personnel

EcoMotors has acquired engine-manufacturer Katech, a move that will help the Allen Park-based startup accelerate development of its green-engine technology.

Katech, which calls Clinton Township home, has made a name for itself over its 35 years for pushing the envelope when it comes to developing the latest in engine and powertrain technology.

“The company has a great reputation,” says Tony Mannarino, the new CEO of Katech. “There are some really skilled people here.”

EcoMotors launched in 2008 with the idea of reinventing the internal combustible engine to be more energy efficient and cleaner. It's developing an opposed-piston, opposed-cylinder engine that is smaller and lighter than conventional engines. It also has about half of the components of traditional engines. EcoMotors is a venture-backed startup with investment from Khosla Ventures, Bill Gates and Braemar Energy Ventures.

The acquisition of Katech will allow for EcoMotors to research, test and build its engine technology. Katech will also keep doing business with its existing clients and flesh out its operations. Katech employs 18 people and is looking to add interns. It expects to hire another five people this year.

“We expect to add another shift to operate at capacity,” Mannarino says.

Source: Tony Mannarino, CEO of Katech
Writer: Jon Zemke

Call for apps: Detroit nonprofit to win brand makeover

Impact48 brings together the Detroit region’s most talented design professionals to donate their time for 48 hours to help one lucky nonprofit to collectively create a new exciting brand. After the two days of creative brainstorming and collaboration, the organization will come away with a brand identity package -- logo design or redesign, letterhead and envelope business card, social networking graphics and more.

If you are an eligible nonprofit organization in the Detroit Metro area that would like to be considered for this exciting event, go here and submit your application by April 7. The winning organization will be announced April 14.

Parjana's technology accelerates Earth's water filtration

Parjana Distribution's clean-water technology isn't trying to reinvent the way cleaning H2O is done in nature. It just wants to accelerate the process.

The downtown Detroit-based startup is commercializing a filtration technology that cleans contaminated water through the earth’s natural ground filtration system. Water in underground aquifers ends up there after gravity takes it through the different layers of ground. The dirt filters out contaminates and creates potable water, similar to how a Brita filter works.

"We're just using mother nature," says Gregory McPartlin, co-founder & managing partner with Parjana Distribution. "Our technology is not doing the work. Our technology is the key that allows us to use the earth as Mother Nature intended but faster."

Parjana Distribution technology, Energy-Passive Groundwater Recharge Parjana, speeds the rate of infiltration by first utilizing waters properties of adhesion and cohesion to attract the water into the pumps chambers, filling the chambers.

"All currently drainage is done through positive pressure," McPartlin says. "We want to do it through negative pressure."

Parjana Distribution's technology was first developed by Andrew Niemczyk, a mechanical engineer from Hamtranck, in 2004. This technology is now employed at 150 sites around the world, including Detroit, Ohio, New York, the United Kingdom and Switzerland.

Parjana Distribution was one of the first investments for Oakland Energy and Water Ventures, a Farmington Hills-based investment firm. Parjana Distribution currently has a staff of 10 employees, 10 independent contractors and two interns. It has hired five people in the last year. It recently moved into bigger office (1,000-square-feet to 4,000-square-feet) in downtown Detroit.

"We want to be part of the rebirth of Detroit," McPartlin says.

Source: Gregory McPartlin, co-founder & managing partner with Parjana Distribution
Writer: Jon Zemke

Click Click Car creates marketing software for auto leasing

The techies behind Click Click Car think they have built a better software platform to make leasing a new car as simple as a few taps on a computer and delivery to the customer’s home.

The East English Village-based startup, formerly uNetworked, is in the final stages of developing an online marketing platform for automotive dealers. The idea is to streamline the automotive leasing process so online consumers can pick the vehicle they want and get the best price as quickly as possible.

"It allows a potential car lease to shop for a car, find the car they like and get the lease price accurate to the penny," says Terry Bean, chief networking officer at Click Click Car. "It gives them all the forms then need. We will bring the car to them for a test drive or deliver it if they intend to lease it."

Click Click Car and its team of five people, and the occasional intern, are putting the finishing touches on the platform and expect to launch it before the end of the month. They are currently working with an automotive dealership that carries the Buick, GMC, Chrysler, Dodge and Jeep brands. Bean declined to name the dealership beyond saying its based on the east side until after the software launches.

Click Click Car is also the software firm behind the 313DLove event earlier this month at Charles H. Wright Museum for African-American History. The event focused on the positive buzz the Motor City generates online, highlighting it with the #313DLove hashtag.

"We're trying to bring that lovefest from online to the real world," Bean says

Source: Terry Bean, chief networking officer at Click Click Car
Writer: Jon Zemke

Beringea investment opens doors at Detroit Institute of Music Education possible

On the surface, Beringea's investment in the Detroit Institute of Music Education can be head scratching.

The Farmington Hills-based venture capital firm is Michigan’s largest, specializing in the later stages of investment. VCs are known for investing in startups with scalable technology that can lead to big exits. The Detroit Institute of Music Education doesn’t exactly fit that stereotype.

The music college for contemporary musicians is launching its U.S. operations from one of Bedrock Real Estate Services buildings in downtown Detroit this fall. The company will offer lessons in playing instrument and musical entrepreneurship. To Beringea's brass, the market for that sort of education is so underserved it makes sinking $3 million into the business an easy choice.

"It's really more about the size of the market that exists and whether it's being served or not," says Charlie Rothstein, founder & senior managing director of Beringea.

Beringea's employees first came into contact with the co-founders behind Detroit Institute of Music Education, commonly known as DIME, through its London office. Sarah Clayman, Bruce Dickinson and Kevin Nixon launched Brighton Institute of Modern Music in Brighton, England, in 2001. They sold the business in 2010 and were recruited by Rothstein and his colleagues at Beringea to open a U.S. version in Detroit.

The trio considered other major cities but were wowed by Detroit. A combination of the Motor City’s musical heritage, buzz about the city’s forward momentum, and hospitality from its business leaders like Rothstein and Quicken Loans Chairman Dan Gilbert made it an easy decision.

"There wasn't a city that extended this sort of hospitality to them," Rothstein says.

The Detroit Institute of Music Education will open its doors to a projected 150 students in September. It will occupy 15,000 square feet in downtown, which Rothstein expects will be able to support up to 1,000 students one day. The company is currently looking to hire 20-30 instructors and support staff for the firm.

Source: Charlie Rothstein, founder & senior managing director of Beringea
Writer: Jon Zemke

Backyard Brains continues global expansion, adds staff

Backyard Brains has come a long way since its inception in 2010. Back then it was a side project of a couple of neuroscientists looking to sell a few insect neuroscience kits to teach grade-school students how the brain works. Today it is a multi-national corporation selling those kits on three continents.

The Ann Arbor-based company expanded into South America last year focusing on the Chilean education market. It has since cemented its presence there and is now expanding into Africa, making sales in Nigeria, Uganda, Morocco and Ethiopia, among other nations.

"We're now in 60 countries," says Tim Marzullo, co-founder of Backyard Brains. "That's pretty exciting."

Marzullo and Greg Gage launched Backyard Brains with its RoboRoach product. The testing kit enables students to control insects via antennas. Its flagship product is SpiderBox, a bioamplifier that allows users to hear and see spikes of neurons in invertebrates.

Backyard Brains sales of these products have increased an average of 5 percent a month over the last year. Revenue spiked to $70,000 last November (the business’ busy season and when it struck a partnership with Harvard) and reached $40,000 in February, which was still up considerably from a year. International sales, especially in Chile, are helping drive the company's growth.

"It (the Chilean market) is where Backyard Brains was three years ago," Marzullo says. "We're making sales there every month now."

The growth has allowed Backyard Brains to add staff. It has hired three people (an engineer, an accountant and a designer) in the U.S. over the last year, expanding its staff to six full-time employees and six part-timers. It also employs one full-time person and three part-timers in Chile.

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

Security firm ATMC moves HQ to Guardian Building

ATMC, a security firm, has staked its headquarters claim in downtown Detroit, taking office space in the Guardian Building.

ATMC is the holding company for Actron Systems and Tricon Security Group, a couple of security and surveillance companies that recently merged. The bulk of their operations are remaining in the suburbs, Allen Park and Taylor, but the ATMC corporate staff is setting up shop in the heart of the Motor City.

"There is definitely opportunity down here," says Michael Whittaker, president & CEO of ATMC. "I think we're seeing a change of the landscape of doing things better, faster and cheaper."

ATMC's two companies currently employ 300 people nationwide. It has 10 people in the Guardian Building. The firm is looking at expanding its office by 1,000 square feet this summer to accommodate its growing staff.

"We're always looking for sales professionals, which are based in downtown Detroit," Whittaker says.

Source: Michael Whittaker, president & CEO of ATMC
Writer: Jon Zemke

IROA Technologies takes first test kits to market

IROA Technologies, formerly known as NextGen Metabolics, has sent its first test kits to market this year as the Ann Arbor-based firm hits few early milestones in 2014.

The life sciences startup released its first two testing kits for yeast and bacteria and is getting ready to release another testing kit this quarter. IROA Technologies testing kits help identify key metabolites that can be used to diagnose diseases, such as cancer in samples including blood and urine. The technology cuts through the clutter of information from the analysis of blood or other bodily fluids and tissues to find the critical metabolites that relate to disease and illness, making for shorter diagnosis times.

"Folks can use them to study any sort of mammalian system," says Felice de Jonge, CEO of IROA Technologies. "You can use them to diagnose disease so you can see if a disease is metabolically different from a control sample."

IROA Technologies landed a Series A worth more than $1 million last year. Its core team of two people have used that seed capital to finish development of the test kits and plans to market them aggressively throughout this year.

IROA Technologies has also brought on Nicolas Barthelemy as a member of the startup's board of directors. Barthelemy held various executive positions at Life Technologies for nine years, including serving as President of the $850 million Cell Systems Division and finally Chief Commercial Officer.

"He has a lot of commercial expertise on cell manufacturing and life sciences in general," de Jonge says. "He knows how to grow life sciences companies."

Source: Felice de Jonge, CEO of IROA Technologies
Writer: Jon Zemke

Talascend staffing firm gets new COO

The leadership team at Talascend is growing as the Troy-based staffing firm adds a new COO.

Andrea Hopkey arrived this month with 20 years of staffing industry experience, working in the engineering/construction, manufacturing, telecommunications, IT/technical, chemical, and oil and gas industries. She has worked at Adecco, and most recently as president responsible for all aspects of the business at Allstates Technical Services.

"She has a tremendous amount of staffing experience with some major players," says Jason Dawson, executive vice president of global administration for Talascend. "She has expertise in places we are growing, such as oil and gas."

Talascend got its start in 1946 as Modern Engineering. It specialized mainly in engineering and design work early in its life but has transitioned mostly to staffing in recent years. The company employs about 150 core staff after making some new hires of recruiters and other positions in the last year.

It routinely places 3,000 people in contract staffing jobs around the world, however, most of its staffing work is U.S.-based. Dawson still sees U.S.-based work as the firm’s biggest growth spot. Talascend has experienced double-digit growth since the end of the Great Recession, and Dawson doesn’t see why that streak would stop anytime soon.

"We see '14 already growing again," Dawson says.

Source: Jason Dawson, executive vice president of global administration at Talascend
Writer: Jon Zemke

Detroiter turns old family recipe into Ellis Island Tea

Nailah Ellis-Brown has always had entrepreneurial ambitions but never a way to get the there. That is until she launched Ellis Island Tea.

The Detroiter decided to draw upon her heritage to make that happen. She took an old family recipe for herbal tea made with hibiscus passed down from her great grandfather, Cyril Byron. The Jamaican immigrant came to the U.S. through Ellis Island in the early 20th Century and worked as a master chef on the Black Star Line, a shipping line started by Marcus Garvey.

Byron leveraged that experience to start his own catering service in the 1940s in New York, a minority-owned business that fed his family for 20 years. Ellis-Brown says that when Byron died he passed down the herbal tea recipe with the instruction that it is to be sold, not told.

"I always wanted to be an entrepreneur but I never had a product or service to offer,” Ellis-Brown says. "I thought, 'Why don't I put this on the market? This could be my ticket to entrepreneurship.'"

Ellis-Brown started selling the bottles of the herbal tea from her home. Ellis Island Tea can now be found in 15 stores in Michigan, including every Whole Foods in the Great Lakes State. She hopes to have her products in 30 stores by the end of this year, including a few outside of Michigan.

Ellis-Brown also recently moved into 4,000-square-feet of space at the Russell Industrial Center on the Detroit-Hamtramck broder. That is now the center of production for Ellis Island Tea and she hopes it will serve as the launchpad for her business going national.

"I wanted to be in Detroit," Ellis-Brown says. "That is where I was born and raised. It means a lot to me to say brewed in Detroit."

Source: Nailah Ellis-Brown, owner of Ellis Island Tea
Writer: Jon Zemke

Reclaim Detroit trains over 300 in anticipation of deconstruction campaign for city

Reclaim Detroit has trained a workforce of over 300 people as it prepares to begin deconstructing the city's vacant buildings. The non-profit organization was selected after submitting to a Detroit RFP, becoming the official deconstruction contractor of the Detroit Land Bank Authority.

The city is using the federal government's Hardest Hit Fund to clear Detroit of many of its blighted buildings. Exact numbers of just how many houses will be deconstructed should be available at the end of the month when the Detroit Blight Removal Task Force has gone through its recently collected data.

Reclaim Detroit is a group that opts for deconstruction over demolition. Work crews go into a house and salvage as much of the original materials as possible. Rather than end up in a landfill, the reclaimed wood is for sale at Reclaim Detroit's store and warehouse at Focus: HOPE.

In addition to being environmentally friendly, the reclaimed wood is a popular design trend these days. A number of Detroit businesses, including Great Lakes Coffee Roasting Company and Whole Foods Market, feature the reclaimed wood. Craig Varterian, executive director of Reclaim Detroit, says that the group will even be outfitting a McDonald's soon. It's a sign that deconstruction is becoming more and more desirable these days. Varterian is excited, too, that in Reclaim Detroit's winning the city's RFP, Detroit chose deconstruction over demolition.

"We're thrilled to have this," says Varterian. "This is the first time that the city has given the nod to deconstruction practices as mainstream."

Varterian says that in working with the Detroit Land Bank, the group will be using a more cost-efficient hybrid method of deconstruction. Crews should be able to complete a house in three to five days. Mechanical demolition will then be used to finish the job.

Source: Craig Varterian, executive director of Reclaim Detroit
Writer: MJ Galbraith
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