During my visit to San Marcos in March, I visited a diverse group of manufacturers both as to products and size of company. The first company I visited, Urban Mining Company, is still in Austin waiting to relocate to San Marcos when their 100,000-square-foot building is ready later this year.
Right after being picked up from the airport by my hosts, we met with Scott Dunn, who is the CEO of Urban Mining Company. Dunn said that he had attended the United States Naval Academy and then received a degree from the University of Southern California. He said, “I started the company in late 2015, and we moved into our first space in January 2016.
We sought major investors from around the county because we wanted to be able to commercialize our technology very quickly. Out of 90-100 investor groups, there were only a few that fit our bill. We spent a lot of time and money protecting our Intellectual Property with patents. We knew that we had original technology and had to be able to protect it. In June 2016, we secured $25M Series A Funding for to build our recycled rare earth magnet manufacturing facility. After careful consideration, we chose San Marcos because it offers the skilled workforce and infrastructure needed to support our fast-growing operation. Once the facility is complete, we will be adding more than 100 manufacturing and technology jobs to the region.”
He explained, “I spent a lot of time in China to build relationships and skills to be able to buy down time from factory owners in China that had over capacity. Because of where we are right now, we are able to get a supply of components to use for recycling the rare earth materials. We are the only company producing Neodymium Iron Boron (Nd-Fe-B) rare earth permanent magnets in the United States. Our company’s patented Magnet-to-Magnet process repurposes domestic source materials from end-of-life products, such as hard disks or motors, to manufacture high-performance Nd-Fe-B magnets, using zero chemical inputs and wastewater. The magnets are then used to support the development of technology applications across the consumer, medicine, defense, aerospace, clean energy, and industrial sectors.
He added, “Most people don’t understand the ubiquity of magnets. The only rare earth mine and production facility in the U. S., MolyCorp Inc., went into bankruptcy in 2010, and the assets were bought by Chinalco’s subsidiary, Shenghe Resources in 2011. The equipment was dismantled and moved China. It’s critical that we develop this technology because China has the goal of controlling the supply of rare earth products by 2025. If they succeed, then they could control the world. “
He concluded, “We are working with Tesla, GM, Ford, and many other OEMs like Raytheon, Northrop Grumman, and Boeing to develop products for the commercial and military/defense industries. I believe that reusing rare magnets is critical to a cleaner future, and we have created a closed loop supply chain to upcycle these materials into products that can have a positive impact.”
When we visited Texas State University’s incubator, STAR Park, we met with Dr. John C. Carrano, founder and CEO of Paratus Diagnostics, a firm that specializes in medical devices for point-of-care diagnostics.
I asked Dr. Carrano how long he has been in the incubator. He responded, “We have been here just over two and a half years, but I actually founded the company in 2012. We are well past the startup phase and are about 18 months away from being cash positive. It’s a long and complex product development cycle for medical devices. Medical diagnostics is not viewed by investors as a get-rich-quick kind of venture, but it is going to be a $10 billion industry in the future. “
I asked him about his background that led him to start the company, and he said, “I retired from the Army in 2005 after 24 years. I am originally from Long Island, NY, but obtained my B.S. from West Point and my Ph.D. in Electrical Engineering from the University of Texas at Austin. I was recruited to teach at the United States Military Academy at West Point in the Department of Electrical Engineering and Computer Science. Then, I was recruited to be a program manager at DARPA where I led several major Defense Department programs related to bio-sensing after the Anthrax attacks occurred in Washington, D. C. Prior to founding Paratus, I was Vice President of Research and Development at Luminex Corporation., a medical device company, and developed an implantable device to diagnose a medical threat.
He explained, “Our goal as Paratus Diagnostics is to develop point-of-care diagnostic solutions to make healthcare more accessible and affordable. Our hand-held Paratus PreparedNow® System and the ParatusSDS® Cartridge, allows clinicians to make decisions during a patient visit – resolving issues associated with lengthy delays waiting on lab results and improving patient outcomes. There is a big need to diagnose periodontal gum disease because of the serious health consequences if it goes untreated, so our first diagnostic test will be a periodontal test as there is zero competition in this market. Our device tests for the six highest risk periodontal pathogens and two key cytokines using saliva. The results are provided in 20 minutes and displayed on a smart phone by color bar graphs.
We have 26 full-time employees and will probably be up to 37 by year end. We have raised $5 million in private equity from angel investors. We also have grants and plan to launch the product into the marketplace in about 18 months.”
At the STAR Park incubator, we also met with Tim Burbey, President of Blueshift Materials.
He said, “Dr. Garrett Poe and I founded the company in 2013 with the mission to commercialize Polymer Aerogels. In July 2014, we became a member of the FLEXcon Holdings family of companies. In 2015, we officially launched our AeroZero® line of products, which consisted of rolled film and monoliths. This was the first commercially available Polyimide Aerogel in the world. Its creation derived from customer demand for a clean, lightweight, small footprint insulation material that can easily be incorporated into composites. We wanted to be ale to make the material in a continuous way as it had always been done in a batch process. We call the products aerogels because they are similar to a foam and are 85% air. It starts out as a polyimide resin and through a proprietary process, it is transformed into the various aerogel products.”
He said, we moved into the STAR Park incubator in the fall of 2016 and also have an applications engineering lab facility in New Braunfels, TX (about 20 miles southwest). We also polymerize our own materials from polyimide at our facility in San Antonio, TX. We have a good relationship with the Materials Science, Engineering, and Commercialization (MSEC) program at Texas State University and have hired graduates.”
He showed me several different shapes and styles of the products they can make now, from blocks to film to powder. It had good properties for thermal management. Since it is 100% plastic, it is very good for incorporating into composites.
He explained, “Our product designs have applications across the aerospace, cryogenic, membrane separation, radio frequency, electronics, and automotive industries. We make a film for a Formula One race car by adding it to Kapton. We work with a lot of electronics and RF product companies. Our materials have RF transparency, so will allow signals to go through, but they also provide thermal management. Our polymer aerogels can withstand extremes of temperature from as hot as 300 degrees C down to as cold as -200 degrees C. Our polymer aerogel has a high strength to weight ratio, especially when bonded to other materials and as a composite core. Our new process for make aerogel film will only take minutes to make vs. weeks, which will greatly reduce cost and open new markets.”
He added, “We are developing new products by teaming with a research company in Palo Alto to look at using different polymers besides polyimide. In June 2016, we got a $3 million Department of Energy DOE grant to develop transparent and thermally insulating Aerogel for single pane windows as part of a project to restore historic windows in the Northeast.”
On the second day of my trip I also met with Paul Brown, President of Bautex Systems LLC, which is focused on transforming the building industry by providing builders and architects with smarter, stronger, more versatile building materials and solutions. He is a serial entrepreneur, who earned his undergraduate degree from the Plan II honors program at The University of Texas at Austin and his MBA at Duke University’s Fuqua School of Business. He has enjoyed a diverse career working in industries ranging from technology and telecommunications to construction products.
He said, “I had moved back to Austin, TX during the dot.com bust and was involved in a VOIP company. I love to build and started building houses. I found a technology very similar to the Bautex technology,” and he invested in the company. But, he wanted to do manufacturing in the right way, and that company needed a better manufacturing process. “Oliver Lee is my business partner, and we did the original research in 2007.
We found the right machine in Europe, so in 2008, we had some custom molds made and took them over to Europe. We rented factory time for two weeks and replaced the wood filler with polystyrene to make blocks. We mixed the ingredients together and poured it into the mold. It was an expensive and slow process. We added sand to the blocks and reduced cycle time to 30 seconds to make four 32 X 16-inch blocks in the mold. We had a goal of a weight of less than 50 lbs.
We spent a couple of years doing R & D before we moved to San Marcos, TX. We started shipping products in 2013 and now have six plants along the I-35 corridor.”
He explained, “The Bautex Wall System, comprised of a proprietary cement mixture and expanded polystyrene (EPS), is used to build interior and exterior walls for commercial and residential construction. The benefits to the contractor is that it is complete system that simplifies construction by combining structure, enclosure, continuous insulation, and air and moisture protection in a single, integrated assembly. With the Bautex Wall System, architects can specify an integrated solution that can be installed by a single contractor, saving time, effort and cost. We are two and a half times what the new building energy codes started requiring in 2016. Our system provides 26% more energy savings.”
He said, “We need a new paradigm for construction in this country. The process of building has to be better. When you analyze building construction, 90% of the work to build a house is non-value-added. We need to reduce the costs of construction, and the buildings need to perform better. We had five buildings that were within five miles of Hurricane Harvey, and they did well.”
He added, “Six of the ten fastest growing counties are in Texas, but the access to labor for the construction industry is not here. There is a shortage of masons in Texas. Panelization in construction is appealing to a new generation of contractors. His concern with panelization is that the industry has stayed with the same old technology. In 2020, a new building code will take effect, and each code changes pushes the bar higher.
We are now building one- to three-story buildings, and we can build faster than traditional construction methods using our Bautex Wall System. We have been nearly 99% commercial, but now we are going after residential work.“
Notice that three of the four companies we visited have developed products using new materials for diverse applications. These companies are examples of the spillover of research in technologies related to the MSEC program at Texas State University.
