Helped by mentor's big bet, Activated Research gains traction

Brad Cleveland, the retired Proto Labs CEO who died of brain cancer in September at 56, gave money a good name.

A computer scientist by training with exceptional organizational skills, Cleveland invested $600,000 in borrowed money when he joined fledgling Proto Labs in 2001.

He made tens of millions after it went public in 2012 and headed toward a market value of $2 billion, employing hundreds of Minnesotans at several plants — thanks to a global market for its internet-enabled technology that allows rapid prototyping of parts for manufacturers.

Cleveland and his wife, Pat, donated millions to the Mayo Clinic, where he was treated for years, to charities and a few promising businesses.

One of them, Activated Research Co. (ARC), is led by Andrew Jones, who was a chemical engineering student Cleveland mentored a decade ago at the University of Minnesota.

ARC has gotten traction. Cleveland and Jones wanted to make a difference with research that Jones commenced as a doctoral student at the University of California, Berkeley.

The Clevelands invested $750,000 to capitalize ARC in a Cleveland-owned building in Eden Prairie.

The company's first product, the Polyarc system, is an add-on component to a gas chromatograph that helps researchers in drugs, biofuels, biotechnology and other industries analyze precisely and with improved speed and accuracy the exact composition of chemicals.

"Brad was a tremendous enabler who helped us start a company that can make a real difference … and we both had a passion for next-generation energy sources and making them more efficient," said Jones, 29, who also is an owner with several employees. "The Polyarc system helps scientists analyze the substance of everything around us, the chemical composition of fuels, foods and more. What we do better … is make it easier for scientists to do that by giving them a predictable response. We are the first company in the world to use 3-D printing, or 'additive manufacturing,' to develop a micro-reactor and sell it."

ARC has sold units to more than 50 large concerns, including the National Renewable Energy Laboratory, Sasol USA, the energy-and-chemical conglomerate, and the University of Minnesota.

It believes there is a $1 billion sales opportunity for its patent-pending technology within the $7 billion global gas-chromatography market.

The Polyarc system has received industry accolades, including the 2016 R&D 100 Award, the 2016 Minnesota Cup winner in the energy/clean tech division and the Analytical Scientist's Innovation Award.

Kim Herzog, another U-minted chemical engineer and director of strategy and development at ARC, said the company expects to reach positive cash flow next spring, hit $1 million in total revenue soon and grow sales "exponentially" thanks to a growing order book.

The average system costs $6,000, plus refillable reactors, or "cartridges" for $1,295 that are replaced about every six months.

"Andrew and Kim are quite a duo who inspired Brad," said Pat Cleveland, Brad's widow. "He always said his favorite thing was working with people who were more intelligent than him. Brad loved working with them. He saw this as his last adventure.

"Brad always thought that ARC had the potential to be bigger than Proto Labs. He thought this is what you do with money. He started the 'Ole Cup' competition at St. Olaf College, his college. He endowed millions at Mayo. Charities. You turn money into something that benefits others."

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.