Office of the Vice President for Global Communications

Friday, January 18, 2013

Student venture fund leads company to acquisition, announces new investment

The Frankel Commercialization Fund, in collaboration with The Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies, has announced that the first company in which it invested has been acquired by an industry leader in solid-state high performance lasers.

Arbor Photonics, a portfolio company of the fund and U-M spinoff whose technology originated within the Department of Electrical Engineering and Computer Science, has been acquired by nLIGHT Corp.

Meanwhile, the student-led venture fund has invested in Fusion Coolant Systems, Inc., a Detroit-based developer of an advanced coolant and lubrication system that makes manufacturing more efficient.

The Frankel Fund first invested in Arbor Photonics in 2007, contributing $85,000 to the initial round of financing. As a result of the recent acquisition the fund will now own stock in nLIGHT, an industry leader in solid-state high performance lasers.

The Wolverine Venture Fund, the university's venture stage investment fund, has also invested in the company, participating in the company's Series A round of financing in 2009.

The Frankel Commercialization Fund is a pre-seed fund established to identify and accelerate the commercialization of ideas generated within and around the university community.

"Our students have been exposed to tremendous experiences through the course of our relationship with Arbor Photonics," said Thomas Porter, managing director of the Frankel Fund and executive-in-residence at the Zell Lurie Institute.

"From learning about technology commercialization during their evaluation of the initial investment to their continued involvement in the company as board observers through this acquisition process, students simply cannot get this type of real-world experience elsewhere. We're pleased to see our very first portfolio company make this next move."

Added Arbor Photonics CEO Phillip Amaya: "The Frankel Fund played a critical role in Arbor Photonics' growth. They have been with us almost every step of the way, from first commercializing the technology with their first investment, through building the team and further developing the product.

Meanwhile, the fund's $80,000 investment in Fusion Coolant was part of a $600,000 series A round that also included the Amherst Fund, Spark's Michigan Pre-Seed Capital Fund and previous investors. The deal marks the fund's seventh investment and the third investment in a manufacturing enhancement technology company.

The company has developed a disruptive metalworking innovation that cools and lubricates metal in a novel way that eliminates the cleaning process for tools and extends machining tool life.

"With the lead funding from The Frankel Fund, we're now able to accelerate our growth and excited to deliver increased value to customers seeking ways to improve productivity while saving money," said Fusion Coolant CEO Tom Gross.

Daniel Itsara, an MBA student and a fellow on the Frankel Fund's Tech team, said fund members are excited Fusion Coolant's potential to transform the manufacturing industry.

"Not only does the company have a unique technology with customer traction, but it also has a superbly qualified team that has the understanding and capability to meet the challenges of integrating it into the production environment," he said.