Automation Alley Puts More Cash Into Civionics, Lighthouse Molding

Automation Alley, the Troy, MI-based technology business association and accelerator, announced today that it has put additional money into two of its incubator clients, Civionics and Lighthouse Molding, through its pre-seed fund.

Each company received $25,000 earlier this year when they started in Automation Alley’s 7Cs program to help advanced manufacturing startups grow. Today, Civionics snagged another $25,000 and Lighthouse Molding scored an additional $50,000. To date, Automation Alley has invested $8.9 million in 47 startups through its pre-seed fund.

Tom Kelly, Automation Alley’s chief operating officer, said he’s thrilled with how the 7Cs program has gone so far. “It gives me great comfort that the clients in the program love it,” he said. “And I recently met with the president of one of the top ten Tier 1 auto suppliers, and he said that we’re really onto something.”

The 7Cs program launched last December with the goal of helping early-stage startups get to market within two years by offering mentorship, coaching, investment resources, and help connecting participants with their first customers. (The “7Cs” stands for concept, context, community, clarity, customers, capital, and commercialization.) Unlike some programs, it doesn’t have set cohorts incubating for a pre-determined block of time. Instead, 7Cs companies can join the incubator at any time, and then they have a year from their start date to “consume services,” Kelly said.

Companies accepted into the 7Cs program are required to repay the initial $25,000 investment at the end of two years, thus making the cash available for Automation Alley to invest in future accelerator clients. However, Kelly said each 7Cs company is eligible to receive up to an additional $100,000 investment from Automation Alley’s pre-seed fund after they’ve gone through the program.

Kelly said Automation Alley decided to make additional investments in Civionics and Lighthouse Molding because both are poised for rapid growth.

Civionics, a University of Michigan spin-out, was founded in 2009 to bring to market sensor systems that use low-energy wireless technology to collect and analyze data from traditionally hard-to-monitor structures like long-span bridges, naval vessels, and wind turbines. Civionics initially thought its technology could be used to monitor civil infrastructure—hence the company’s name—but instead hit on using its sensors to track the efficiency and condition of manufacturing equipment.

“I’m surprised it took us so long to figure it out with so much manufacturing in Michigan,” Civionics CTO Andrew Zimmerman told Xconomy in February, adding that all of the manufacturers using Civionics’ technology so far are based in-state. “We’ve already gotten lots of traction.”

Lighthouse Molding, headquartered in Sterling Heights, MI, has developed a technology called low pressure overmolding, used in manufacturing electronics, that Kelly said makes the process faster and cheaper. Automation Alley is further funding Lighthouse Molding because, as Kelly put it, they have a great problem: too many orders and too little product, so the company will use the money to shore up inventory.

Kelly said the Lighthouse team is so happy with the progress they’ve made during their stint in 7Cs that they traveled to the state capital recently to testify on behalf of the Michigan Economic Development Corporation, the governmental organization that funds the program.

Kelly said there are currently six companies in the 7Cs program, and the goal is to have 10 each year. “So far, so good,” Kelly responded when asked how the program’s inaugural year is going. “I really think we’re onto something big here.”

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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