Innovation + Job News

A St. Paul med-tech startup has secured a $1 million bridge loan to keep it going until it can finish its next round of fundraising.

NxThera is developing a minimally invasive ablation procedure for treating enlarged prostate and prostate cancer. Unlike existing ablation treatments, NxThera's device uses vapor rather than radio-frequency or microwave energy.

"The best way to describe it is that we're using vapor to kill tissue," says Bob Paulson, a former Medtronic executive who now NxThera's chief executive.

Paulson says the procedure takes less than two minutes, compared to the 30 minutes or more needed for ablation treatments using radio frequency or microwaves instead of vapor.

"As it phase-shifts from vapor to liquid, it releases stored thermal energy and kills the tissue, but kind of does it gently," says Paulson. It's faster and less painful, and leads to fewer complications, he says.

The company is still proving out those results. It started its first human patient study earlier this year in Chile, and the results have been "extremely favorable" so far, according to Paulson.

NxThera was founded in March 2008 by Michael Hoey, a former physiology professor at the University of Minnesota, along with patent attorney John Shadduck.

The company is currently finalizing its product design and working on completing its next round of fundraising, which will pay for a full-scale U.S. clinical study.

"As you may have heard, it's kind of a tough market to raise money these days," says Paulson. "We haven't slowed down any of our development. It's taking longer to get the dollars to finalize the financing, but we'll get there."

Source: Bob Paulson, NxThera
Writer: Dan Haugen

A Fridley company's thin, flexible electronic displays could be the next big thing in credit-card fraud prevention.

Aveso recently secured a $1.04 million investment that will finance the company through the end of the year. By then, it's hoping some of the world's largest credit card companies will have signed on as customers of its credit-card product, Primero.

The product is a printed, blue-and-yellow electronic display that can be affixed to the front of a card. Aveso sees a big potential market for one-time passwords, which unlike regular credit card security codes could continually change.

"This is the next level of security authentication, by having the display on the card," says Nick Wood, Aveso's chairman of the board.

Aveso was spun out of Dow Chemical in Midland, Mich., in 2004. Its founder decided to set up the company in Fridley.

Earlier versions of the display couldn't withstand the heat and stress that credit cards are subjected to, but Aveso has figured out how to make the technology more durable.

Most credit-card fraud occurs when the card is not present, says Wood. The credit-card industry has already started using one-time passwords, but they're currently displayed on a separate keychain device.

Wood says he believes Aveso's product is going to be a disruptive technology. Two of the world's largest credit-card companies are evaluating the technology, and the product now meets the industry's quality standards, says Wood.

The company expects to ship between 50,000 and 100,000 units this year, mostly trials, he says, and probably 3 million next year. It is projecting that it will be profitable in 2012.

Source: Nick Wood, Aveso
Writer: Dan Haugen

The Minneapolis Biomass Exchange had added a pair of new directors to its board, giving it new expertise in the areas of cleantech and finance.

Doug Cameron is founder of Alberti Advisors and previously worked for Piper Jaffray, Cargill, and Silicon Valley cleantech venture firm Khosla Ventures.

Rajesh Aggarwal is a professor of financial markets and institutions at the University of Minnesota's Carlson School of Management.

The Minneapolis Biomass Exchange is a web application where buyers and sellers of biomass fuel can post for-sale and want ads for fuel crops. Biomass is a term for plant-based materials such as wood chips or corn stover that can be burned as a fuel. (For more on the Minneapolis Biomass Exchange and its business model, see our previous article on the company here.)

Cameron says he's been interested in biomass for most of his career, specifically with its logistics and how we can use more of it in a smarter way.

"The Minneapolis Biomass Exchange was interesting from that standpoint, but also I was just very impressed with the people behind it," says Cameron. "It was a pretty easy decision for me when they asked me if I would be interested in a board seat."

In his new role with Alberti Advisors, Cameron plans to spend about a third of his time working with "small, exciting, interesting, emerging companies," another third working with financial organizations like venture funds and capital firms, and another third working with larger corporations that also have an interest in cleantech.

Founder/CEO Kevin Triemstra said Cameron and Aggarwal provide knowledge and experience that will help the company reach its goals.

Source: Doug Cameron, Alberti Advisors
Writer: Dan Haugen

OrthoCor Medical kicked off sales last month for its first device: a knee wrap that uses heat and electromagnetic pulses to alleviate pain and swelling.

The product, called the OrthoCor Active Knee System, sells for about $200 and runs on a rechargeable battery and disposable, single-use heat "pods."

The Twin Cities company has been gearing up for sales since December, when the U.S. Food and Drug Administration approved the device for sale. In February, OrthoCor disclosed plans to raise $1 million from investors to grow its sales and marketing force. CEO John Dinusson said in an interview last week that fundraising has since exceeded $1.5 million.

(OrthoCor was the first business certified under Minnesota's new angel investor tax credit program.)

While investors appear to be enthusiastic, insurers remain skeptical. Clinical data about the product's effectiveness is limited, which will hinder any efforts to win reimbursement from insurers. Instead, the company is counting on chiropractors to be the primary distribution channel for the device.

"We know that we have a huge patient population," says Dinusson. An estimated 26 million people in the United States suffer from knee pain, and many become less active instead of seeking treatments, says Dinusson. He hopes their product can change that trend.

OrthoCor has five employees, including inventor Kin-Joe Sham. The devices are manufactured at Sham's father's company in China, and Dinusson has been contracting independent sales reps. Several other products are in the pipeline, including devices for relieving wrist, ankle, elbow, and lower back pain.

Source: John Dinusson, OrthoCor Medical
Writer: Dan Haugen

Call it organic growth. A south Minneapolis design shop is finding success in a downturn by focusing on food co-ops and other "mission-oriented" clients.

In fact, the past few years have been the best on record for Spunk Design Machine, a 14-year-old creative boutique in the Nokomis neighborhood.

Founder Jeff Johnson says the shop's work is up at least 30 percent from a year ago, and much of it is in a niche he's coined "mission-oriented branding."

"I feel incredibly excited and bullish about this trend," says Johnson. "All of the clients that are doing mission-oriented branding seem to be succeeding."

They're organizations like the Seward Co-op, Peace Coffee and Galactic Pizza, which, like Spunk, pay attention to a triple bottom line that looks at financial, environmental and community factors. From Johnson's vantage point, it seems that companies selling good products with a clear message are "rocking it" despite, or perhaps because of, the recession.

"We've been just really fortunate that we've been attracting a lot of those clients in the past couple of years," says Johnson. Its current roster includes about 30 clients.

Among the projects he's most proud of: a compostable pizza box he designed with Galactic Pizza. Standard pizza boxes can't be recycled because of the grease content. The solution they came up with was to collect and compost the used boxes. The entire box is a $1-off coupon. After they're turned in, they're composted in a bin behind the store, and then the finished compost is sold for roadside planting projects.

Spunk Design Machine opened a New York office a couple of years ago, but Minneapolis remains its home base. Johnson says he's yet to come across a better town to build a creative business: "Minneapolis is just filled with a lot of dorky, humble, very smart people who make amazing stuff."

Source: Jeff Johnson, Spunk Design Machine
Writer: Dan Haugen

A local cleantech startup announced last week that it's signed a patent licensing agreement with the University of Minnesota.

NewWater was co-founded last year by two recent College of Science and Engineering  graduates, Joe Mullenbach and Alex Johansson. The licensing deal allows the company to move forward with its efforts to develop and commercialize an atrazine filter for drinking water that's based on university research.

"Having exclusive access to this intellectual property allows us to openly discuss our plans with potential development partners," says Mullenbach.

We wrote about NewWater earlier this summer after it was selected as a semifinalist in both the Minnesota Cup and Cleantech Open contests.

The University of Minnesota said in a press release that NewWater is the tenth startup spun off from its technology in the past 18 months. As part of the deal the school holds an equity stake in the company.

The technology is based on enzymes developed by University of Minnesota biochemist Lawrence Wackett and microbiologist Michael Sadowsky. The enzymes initiate a bacterial process that decomposes atrazine into harmless by-products, according to the announcement.

Atrazine is among the most widely used herbicides on the planet. The U.S. Environmental Protection Agency is re-evaluating atrazine in light of recent studies that have linked low levels of the chemical in drinking water to birth defects, low birth weights, and menstrual problems.

Mullenbach says NewWater's filter will be able to help municipalities save money and meet more stringent drinking water standards than is possible with the activated carbon filters currently used.

Source: Joe Mullenbach, NewWater
Writer: Dan Haugen

 

Mono, a fast-growing Minneapolis advertising and branding agency, has entered into an agency-of-record relationship with cable news network MSNBC.

According to an NBC Universal press release, mono "will be MSNBC's creative and strategic partner for marketing campaign development and advertising efforts."

"Mono has a strong track record of success and we're thrilled to have them as our strategic and creative partner." Sharon Otterman, Chief Marketing Officer of MSNBC, said in the announcement.

Mono's managing partner, James Scott, said that his firm is "thrilled" to help MSNBC continue to build momentum in the competitive news space, but neither company is saying much else about the deal.

It could be that they're just plain too busy. Mono is one of the fastest growing agencies in the country, adding more than 20 employees in the last 12 months. It expects to add at least 12 more in the coming months. A spokesman says new business is up 65 percent year-to-date compared to 2009, with new clients including Parsons The New School for Design, HGTV, Johnson & Johnson's Rolaids brand, and MSNBC.

Mono was recently named one of the best small agencies in the country by Advertising Age magazine.

The company has a track record in television, too. Mono's very first client was Sesame Street, and it also was behind USA Networks' "Characters Welcome" campaign.

Source: Jim Scott, Mono
Writer: Dan Haugen

A biofuels company spun off from the University of Minnesota disclosed last week that it's raised more than $357,000 in investment capital.

BioCee, which was founded in 2007, is working on a method for creating liquid hydrocarbon fuel from bacteria, water, sunlight, and carbon dioxide.

The company also disclosed in a filing with the U.S. Securities and Exchange Commission that it is seeking to raise another $500,000 in the next year.

Co-founder Luca Zullo said it's the company's policy not to comment on fundraising and financial matters.

The company previously received a $2.2 million grant from the U.S. Department of Energy, as well as a $150,000 small business research grant from the National Science Foundation.

BioCee is also a semifinalist in this year's inaugural Cleantech Open North Central competition, which covers a seven-state region.

Source: U.S. Securities and Exchange Commission
Writer: Dan Haugen

A local mobile marketing startup bubbled up to the semifinals this month in a contest-like request by PepsiCo for promising new media communications technology tools.

MixMobi ended up losing its fizz as the field was narrowed from 40 to 20 companies, but founder Lisa Foote says their platform is gaining traction at home and elsewhere.

MixMobi has developed a light, versatile platform that lets retailers, restaurants, and other businesses create and send simple offers and promotions to customers' cell phones.

Unlike other mobile marketing platforms, MixMobi's promotions work on any phone with a web browser. They're delivered via tweets, short links, or, most recently, QR bar codes.

The company's technology is being used to run the QR code promotions in the July and August issues of Minneapolis/St. Paul magazine. It's also the engine that powers the location-based advertising on the DriveAlternatives app, which we wrote about earlier this month.

"We're the engine that helps them, but we're very happy being in the background," says Foote.

Foote says it seems like the company is getting more traction. The interest in mobile coupons and promotions is on the rise. MixMobi solves a lot of problems for agencies, which are getting more and more requests to push promotions on multiple different mobile platforms.

Foote started the company in 2008 with her husband, Brad Roberts, and chief technology officer Kelly Heikkila. The company launched publicly in February and has already earned positive reviews from blogs and analysts, including Mashable.com and Juniper Research.

The next step for MixMobi may be augmented reality, the new technology that layers visuals, directional signals, and other information onto digital images of the real world. The company was in talks with a major augmented reality developer about laying MixMobi offers into its augmented reality worlds.

Source: Lisa Foote, MixMobi
Writer: Dan Haugen

A local catalog and e-commece veteran is signing up some big-name users for his new company's social commerce platform.

Jeffery Giesener is the founder/CEO of ShoppeSimple, a web app that lets retailers broadcast deals to customers via e-mail, web sites, and social media.

ShoppeSimple recently added PBS, Rite Aid, and four other clients to be announced in August. Merchants pay a commission for each sale generated by the platform. Consumers can sign up for free and anonymously to receive the deal alerts via RSS, Twitter, Facebook, Google or Yahoo homepages, or other channels.

The ability for consumers to sign up for alerts without handing over personal information is an important part of ShoppeSimple's design. As an employee at DoubleClick during the early 2000s, Giesener saw first-hand how not being careful about protecting consumer's privacy can lead to complications.

"I kind of said: how would I build a marketing channel, knowing what I know but respecting consumer privacy and delivering something that was never in place before?" says Giesener.

Since consumers choose what alerts they want to receive, and how and where they want to receive them, retailers are able to reach an audience that is already interested in their products.

ShoppeSimple has 10 employees. In addition to rolling out pages for new clients, the company is also working on raising capital to support its growth. It also plans to advertise to consumers in 2011.

Source: Jeffery Giesener, ShoppeSimple
Writer: Dan Haugen

A gene database developed at the University of Minnesota could help reduce the time and cost involved with vetting new cancer drugs.

The school is in the process of copyrighting the database, known as OncomiR, and has plans to license it to pharmaceutical companies and other researchers.

"Our final goal is to make this database the one-stop shop for any information related to this gene," says Rasik Phalak, 24, who created the database while earning a computer science masters degree.

OncomiR and Phalak are also semifinalists in the student division of this year's Minnesota Cup entrepreneurship contest.

As a graduate student, Phalak helped Dr. Subbaya Subramanian, a med school researcher, organize his data related to microRNA. MicroRNA is a gene type scientists think may contain clues about the causes of cancer growth.

OncomiR organizes all of Subramanian's data into a single database. Phalak also developed a web application that allows drug researchers to search via a web browser.

"With this, they'll get a good starting point, which will help to eventually reduce the time and the cost involved in the entire process," says Phalak, who plans to continue to populate and update the database.

Source: Rasik Phalak, OncomiR
Writer: Dan Haugen

One week after launching the state's new angel investor tax credit program, state officials had received 20 applications for certification as of Monday.

All businesses, investors, and angel funds must be certified before applying for a tax credit allocation. Officials have already received one application for credit allocation.

The statute says state officials can only release the names of businesses and investors that have been certified.

Six entities had been certified through Monday. They include:

    --OrthoCor Medical, Inc., a company that makes a device for treating knee pain

    --Investors Donald Schreifels, Sheri Aggarwal, and Charles Floyd

    --and the Twin Cities Angel II, LLC, fund

Spokeswoman Kirsten Morell said more applications are coming in every day.

Source: Kirsten Morell, Department of Employment and Economic Development
Writer: Dan Haugen

A revolving investment fund at the University of St. Thomas helped five promising Minnesota technology companies get through a tough year.

The William C. Norris Institute at St. Thomas' Opus College of Business invested $280,000 during its 2010 fiscal year, which ended June 30. That included an investment in an undisclosed cleantech startup that's still in stealth mode, as well as follow-up investments in four companies that were already in the program's portfolio:

    �Apinee, which makes an environmentally friendly wood treatment

    �Dejen Digital, a web portal that aims to streamline music and dance tryouts

    �Seeonic, which makes an RFID-equipped retail display to help track inventory

    �and Xollai, which is developing a system for landing unmanned aircraft

Norris Institute Director Mike Moore said it was a difficult year for everyone.

"It was just survival. If a company matched its sales from the year before, or just lost a little bit, that was more than could be expected," Moore said.

The fund was created by the late Control Data Corp. founder and CEO William Norris in 1988 to support early-stage technology-based companies in Minnesota that address social needs as well as business opportunities. In 2001, the program became part of the St. Thomas business school, where students now help perform due diligence and other tasks related to running the fund.

Moore said this year he hopes to make first-time investments in four or five companies. Entrepreneurs can find guidelines and information about submitting business plans at http://www.stthomas.edu/norrisinstitute

Source: Mike Moore, William C. Norris Institute
Writer: Dan Haugen

Exos Medical Corp. introduced a high-tech alternative to plaster casts last year that can be re-conformed as injuries swell and subside.

The company hopes its new Arden Hills facility will allow it similar flexibility. And right now, sales are swelling.

CEO Fariborz Boor Boor described sales as "nothing short of phenomenal" for a new medical technology, which often have slow adoption curves. (A recent filing with the U.S. Securities and Exchange Commission listed revenue at less than $1 million.)

Meanwhile, Exos' products have been worn by some high-profile athletes, from NFL quarterbacks to Olympic skier Lindsay Vonn, and also noted on national tech blogs by Fast Company and BoingBoing.

"Actually, part of our growth challenge right now is meeting the demand, so we're taking steps to make sure we have product to sell," Boor Boor said.

Exos moved on April 1 from a 4,000-square-foot space in White Bear Lake to a 12,000-square-foot facility in Arden Hills, tripling its floor space. Meanwhile, it's grown from just five employees at the start of the year to more than 20 today. It expects to be at around 30 employees by the end of the year.

The company's technology is a lightweight foam and polymer product that can be molded and hardened into casts, braces, and splints. Unlike plaster casts, they're breathable, waterproof, and adjustable during the course of healing.

"Beyond that, the comfort level of our products is unprecedented," Boor Boor said. "That really was our focus, making sure we could make a product that was comfortable for the patient and easy for the practitioner to apply."

The cost is "a bit higher" than traditional casts, he said, but the price becomes competitive when you factor in that traditional casts often have to be replaced.

The company was created in Aug. 2007 as a spin-off from Boor Boor's previous endeavor, a med-tech incubator called Enova Medical Technologies.

Source: Fariborz Boor Boor, Exos Corporation
Writer: Dan Haugen

From indie radio to indie T-shirts: A former Twin Cities radio personality is turning music-inspired clothing into an at-home small business.

Pop Frocks started last fall when Mandy Cox bought a T-shirt press and started making toddler and infant clothing inspired by her favorite rock and soul music legends. The goal was not only cool clothes for her then 1-year-old son, but also building a business that would reconnect her with her former music career.

Cox started out her radio career in the mid-'90s as an intern at the late-great Rev 105, and later took that experience to KFAI, where she hosted an overnight music program. She also worked behind the scenes at 89.3 The Current during the first year of the station's existence.

As she settled down a bit and had a kid, she found herself missing her old music lifestyle. "I really missed that, and thought: what can I do from the house that can bring this element back into my life?"

When the Electric Fetus recently invited her to participate in one of its MinnEconomy events (Pop Frocks is one of this month's featured artists), Cox decided to create a whole new series of shirts all inspired by Minnesota artists.

"It all started off by asking (89.3 The Current DJ) Mary Lucia if I could put her face on a T-shirt," says Cox. Since then she's received enthusiastic OKs from more than a dozen local bands and personalities, from punk pioneers The Suicide Commandos to current buzz-band Communist Daughter.

"I'm totally jazzed about the way it's turned out," says Cox. "It's nice to get that e-mail from [Duluth musician] Alan Sparhawk saying, yes, go ahead! Do it! Send me one for my daughter!"

The limited-edition collection (Cox is limiting each design to between 30 and 50 shirts) is for sale at The Electric Fetus and will soon also be available on the Pop Frocks website.

Source: Mandy Cox, Pop Frocks Apparel
Writer: Dan Haugen