A local venture capital firm recently led a seed funding round for a Michigan tech startup producing an innovative water filtration system.
Grand Rapids-based Michigan Capital Network, along with members of the firm’s five angel investing groups, led the $4 million raise for Midland-based Accelerated Filtration Inc.
The startup delivers packaged turnkey filtration solutions for removing fine suspended solids in variable water streams. The company’s patented VelRay X technology offers fine particle filtration for large and small water processing challenges across a range of industries and applications.
For Michigan Capital Network, which invests in the life science, software, and advanced manufacturing sectors, Accelerated Filtration’s technology is a “win-win” for manufacturing efficiency and environmental benefits.
“We think this has long-term benefits for the world in general, but even in the U.S., this has excellent municipal applications as well as reducing wastewater from industrial applications,” said Paul D’Amato, CEO and managing director at Michigan Capital Network. “It’s a perfect fit for our organization.”
Michigan Capital Network’s Bluewater Angels group, which is based in Saginaw and serves the mid-Michigan region, spearheaded the investment. Several members of Bluewater Angels are former executives at the Dow Inc. chemical company headquartered in Midland, where the technology originated.
Accelerated Filtration’s technology was “developed at Dow to address a critical step in the water treatment process, but with their merger (with DuPont in 2015 and subsequent split), Dow decided it wasn’t a fit for their operation anymore,” D’Amato said.
John Mallard and Scott Burr, a former longtime engineer at Dow, took over the project and founded Accelerated Filtration (AFI) in 2020. The startup, which currently employs seven people, leases space inside heating and cooling company J.E. Johnson’s facility in Midland.
The $4 million seed funding will enable AFI to double its manufacturing footprint and ramp up its global business development efforts.
The first units of VelRay X filtration systems are slated for delivery to Australian and Canadian customers starting next month.
While the technology’s primary function is to filter fine suspended solids from variable water streams, it also addresses growing global water challenges, enabling greater capability in processing source water, treating wastewater, and recycling and reusing processed water.
“We sit here in a water-rich region — one of the most water-rich regions in the world — and it’s easy to forget that there are 2 billion people in the world that don’t even have access to clean drinking water and that 40% of the world is affected by water scarcity every day,” said Burr, who serves as AFI’s president and CEO.
Burr noted that as global populations rise, both urban and industrial sectors will be competing for limited water resources, and this cost-effective technology can help manage demand for water supplies.
“We believe that if we can help the industry become better water stewards, then naturally in areas that are experiencing high population growth coupled with high economic growth, if the industry is there, it can be more sustainable with the water supply,” Burr said.
D’Amato said Michigan Capital Network is closely following manufacturing’s growth in Michigan, and that the firm will seek additional investment opportunities with companies like AFI that are pioneering advanced manufacturing technology.
Additional participants in the recent seed round included Lansing-based Red Cedar Ventures, a subsidiary of the MSU Foundation, as well as Oxcart Equity Partners, Closed Loop Partners, Anthropocene Ventures, ID Ventures, and Northern Michigan Angels.
AFI previously secured $1.5 million in pre-seed funding in 2022.
More from Crain’s Grand Rapids Business:
Corewell Health financial results improve for the first quarter
Zoning change would permit taller buildings in downtown Grand Rapids
Gentex suffers a ransomware attack