The Star Tribune reported Friday that venture capital investment in Minnesota, driven largely by our historical sweet spot of medical technology, was down last year amid concerns about health care reforms and regulatory issues.
We've got a lot of eggs in that high-risk, high-return basket.
But there has been growing interest among early stage investors in so-called "green tech," which ranges from battery and biofuel substitutes to alternatives for petroleum-based chemicals we use in everything from dry cleaning to manufacturing to fighting fires.
One such fledgling company, EarthClean, just raised another $1 million from individual investors, and is more than two-thirds of the way to its $3 million goal.
Minneapolis-based EarthClean has signed a West Coast distributor for its TetraKO firefighting gel. It's also gotten testimonials from several Minnesota fire departments and has commenced production of what could be its first $1 million worth of product through a contract manufacturer over the next year.
"We signed ATIRA Systems, a full-service distributor in Oregon that serves the western states and we just shipped them our first order," CEO Doug Ruth said this week, in advance of an announcement scheduled for Monday. "We've placed another production order and we expect to have two [Minnesota] contract manufacturers working this year, and we are negotiating distributor agreements [in other states and overseas]."
Since last summer, EarthClean, working with fire departments from Blaine to Southern California, has provided free product that is blended with water and used to suppress grass fires, dumpster fires, barn fires and car fires. TetraKO contains corn starch and "a secret sauce." When mixed with water, the product turns into a biodegradable gel that sticks to burning objects, creating a fire-suppressing coating to extinguish fires faster than plain water, foams or phosphorus-based retardants.
"I have never seen anything like TetraKO," Jeffrey Denholm, the CEO of Portland, Ore.-based ATIRA Systems, said last week. "[We] represent ... fire retardant and suppression products. We look forward to delivering this unique technology to the fire industry throughout our region."
In November, EarthClean received the top prize in the Cleantech Open North Central Region competition and placed third overall in the national competition. Cleantech Open is the Academy Awards of green-technology business competition.
"We're working with a number of fire departments, including Oakdale, Blaine, Spring Lake Park, Andover, Excelsior, Wayzata, and Fridley," Ruth said. "They all have fire engines full. They provide feedback. And it's been good."
EarthClean originated as a back-of-an-envelope idea by a Woodbury firefighter, his dad -- a retired 3M engineer -- and a couple of chemical experts from H.B. Fuller.
The market potential is significant; hundreds of millions of dollars worth of chemical retardants are sold annually to fire departments and private services.
Ruth said TetraKO has been independently certified as nontoxic and biodegradable by accredited laboratories.
There are some interesting testimonials and demonstration videos on the website at www.tetrako.com.
Neal St. Anthony • 612-673-7144 • email@example.com