Author: Sarah Minnick

When Indianapolis-based The Heritage Group launched its New Ventures Group in 2018, it did so in the belief that it could leverage its expertise in materials science to boost entrepreneurship, generating benefits both inside and outside the company.

The strategy seems to be working even better than expected for the privately held, family-owned company that has an ownership stake in more than 30 operating companies, including Calumet Specialty Products Partners LP, Heritage Environmental Services, Monument Chemical and others.

To date, the company’s venture arm, HG Ventures, has invested nearly $200 million in a total of 30 companies, eight of which had been participants in The Heritage Group Accelerator.

And in 2021, HG Ventures became the first non-Europe-based investor chosen to partner with Innovate UK, a research and innovation funding initiative associated with the government of the United Kingdom.

“I would say the thing that surprised me the most was how strong the market for material-science venture investing turned out to be, and how well-positioned we have been to establish a brand in that area,” said HG Ventures Managing Director Kip Frey. The Heritage Group recruited Frey from North Carolina to launch HG Ventures four years ago.

The venture group has a threefold strategy:

• Invest in U.S. and international companies that focus on materials science (studying
  the substances things are made of and designing more advanced
  substances/materials).
• Launch an annual startup accelerator.
• Incubate employee ideas that show commercial promise.

The venture group’s investments focus on areas such as energy, sustainable materials, water, infrastructure and the circular economy—the concept of reusing and recycling materials rather than disposing of them.

HG Ventures’ investment portfolio includes companies like Zionsville-based 120Water, which offers water-sampling kits, software and services for water system management and compliance. It also includes Israel-based Valerann, which offers a trafficmanagement platform for road operators and traffic authorities.

The accelerator, whose fourth cohort of startups wrapped up last week, has brought a total of 37 startups to Indianapolis since 2018 for a 13-week, in-person accelerator at The Heritage Group’s headquarters just east of Eagle Creek Park. The startups come from around the world; to date, five have chosen to move their headquarters here.

The Heritage Group also decided this year to run its accelerator on its own, after a three year contract with accelerator operator Techstars came to an end.

The third part of The Heritage Group’s strategy, its in-house incubation process, has already resulted in one new company. That startup, Avenew Inc., is a road-management company that launched in February and is now part of The Heritage Group’s portfolio.

‘Amazing resources’

For The Heritage Group, part of its secret sauce is the expertise and resources it can offer the companies it invests in.

HG Ventures and The Heritage Group Accelerator both operate out of The Center, a 113,000-square-foot building that also serves as The Heritage Group’s corporate headquarters. The facility, in InTech Park, also is home to The Heritage Group’s in-house research and development laboratory, which helps its operating companies develop and test their products.

And The Heritage Group’s 6,000-person workforce includes chemists, engineers, scientists and others with specialized industry knowledge.

“We have 6,000 people. We’ve got amazing resources that we can bring to bear for entrepreneurs that show that it’s not lip service, adding value. It’s truly tangible value that we can bring to these companies,” said Ginger Rothrock, senior director of HG Ventures.

These types of resources can help HG Ventures in multiple ways, said
fellow venture investor David Kerr, managing director of Indianapolisbased Allos Ventures.

Allos and HG Ventures are co-investors in 120Water Inc., which is also a graduate of The Heritage Group Accelerator.

A venture firm that invests in the realm of materials science, clean technologies or hard tech—technology that includes both hardware and software—needs the know-how to find and evaluate potential investments.

One way to find this know-how is to work with consultants, universities or industry partners, Kerr said—but The Heritage Group has this expertise inhouse. “That’s where I do think it really does give Heritage Group an advantage, having ready access to those types of people.”

‘A complete mind shift’

These are the types of resources that caught the eye of suburban Seattlebased entrepreneur Jason Puracal, co-founder and CEO of ZILA Works. The company was one of seven startups from the United States and Canada who came to Indianapolis for this year’s accelerator.

ZILA, which launched in 2014, has developed a process for using industrial hemp to create bio-epoxy resin for use in products from sporting equipment to floor sealants. The company hasn’t yet started generating
revenue but has secured its first paid pilot test, which will take place this winter with Vermont-based Burton Snowboards, Puracal said.

He’d been through three previous accelerators in the U.S. and Canada before coming to Indianapolis for The Heritage Group Accelerator, he said, and this one is different.

“This is the first accelerator program that has had specific expertise that is relevant to our industry,” he said. “It’s been great to have the resources and the muscle of Heritage at our disposal.”

Most of ZILA’s partners before had been universities, Puracal said, so working with an industry-based accelerator has given him a whole new perspective.

“Academia runs at a certain pace, and Heritage has helped us shift our mental framework about, ‘Oh, really we can go much faster in this other setting,’” he said. “It’s
been a complete mind shift for us, and we’re trying to scale up as quick as possible now.”

One area ZILA had struggled with, Puracal said, was finding a manufacturer willing to make the company’s product. He said his company had reached out to 40 companies, all of whom said ZILA was too small for them to do business with. But through the accelerator, Puracal is now in conversation with The Heritage Group’s Monument Chemical as a potential manufacturer. “Monument has a different approach because of
the accelerator program.”

During their 13 weeks in Indianapolis, Puracal said, he and his fellow founders were also introduced to representatives from Purdue University, the Indiana Economic Development Corp. and other startup accelerators, as well as Indiana-based venture investors. The accelerator participants also traveled to events in Pittsburgh; Columbus, Ohio; and Louisville.

Being in person for the 13-week program has also allowed Puracal to meet other founders who have become both friends and sources of professional support.

Becoming known

The Heritage Group “seriously considered” 75 applicants for this year’s accelerator cohort, Frey said. Many more companies submitted applications, but the 75 represented the strongest.

New Ventures Group is also gaining traction on its venture investment side.

The Heritage Group’s CEO, Amy Schumacher, said HG Ventures has seen an increase in both volume and quality of investment opportunities that cross its threshold over the group’s four years in existence.

Schumacher is a great-granddaughter of John E. Fehsenfeld, who launched the company in 1930 under the name Crystal Flash. She, along with board Chair Fred Fehsenfeld Jr., had the vision for what became New Ventures Group.

“What has surprised me is how quickly HG Ventures has established themselves as a leader in this space,” Schumacher said.

Some of the investment opportunities are pitched by entrepreneurs, she said. Others come from fellow venture firms looking for co-investors for particular deals.

“They see the value we can bring to an opportunity,” Schumacher said.

The third part of New Venture Group’s strategy is to incubate business ideas that come from within.

As part of this effort, Schumacher said, The Heritage Group launched a year-long Concept to Commerce course, which focuses on how to commercialize an idea. Employees must be nominated to participate, and a second cohort is set to begin early next year.

“It was an overwhelming success,” Schumacher said.

New Ventures Group has already successfully taken one idea from concept to commercialization with Avenew, which quietly launched in February.

The company, which helps local governments manage their road and bridge infrastructure, was born out of an idea from Heritage Group employee Micah Vincent. Vincent, who was director of Indiana’s Office of Management and Budget before joining The Heritage Group, now serves as Avenew’s chief operating officer.

The startup’s CEO is Joe McGuinness, who formerly served as commissioner of the Indiana Department of Transportation. Before that role, McGuinness served as mayor of Franklin.

McGuinness said leading a startup is altogether different from being a government executive. The Heritage Group has helped him with tasks as big as business strategy and as small as creating and ordering business cards.

“They have provided a lot of support,” he said. “They allow you to sleep at night and not be looking around every corner.”

It took about 18 months to develop Avenew’s initial concept into a business, Rothrock said. Other ideas are now making their way through the incubation process, with anticipated business launches in one to three years, though Rothrock declined to reveal details.

ZwitterCo Transforms Performance and Economics for Industrial Wastewater Reuse with $33 Million Series A Funding

DCVC leads the largest Series A funding round for a water technology company with $33 million in financing to scale ZwitterCo’s revolutionary membrane technology that treats the toughest industrial wastewaters for reuse and is immune to irreversible fouling.

Boston, September 15, 2022 – ZwitterCo, Inc., the advanced membrane technology company, today announced the largest Series A funding round in history for a water technology company. The $33 million financing, led by DCVC, will expand the development and production of its revolutionary zwitterionic membrane technology.

ZwitterCo’s technology delivers what the water industry has been seeking for decades: a rugged polymeric membrane that is immune to irreversible fouling. Traditional membrane performance degrades with every cleaning cycle until the membranes no longer work and must be replaced. For tough-to-treat wastewaters, membrane replacement occurs frequently, increasing the operational complexity and cost of running wastewater plants. ZwitterCo membranes, by contrast, perform as new after every cleaning cycle.

ZwitterCo leverages its patented zwitterionic copolymers to build highly advanced membranes that solve the toughest wastewater separation challenges. The performance advantages of ZwitterCo’s membranes make them unique. They can be used in a wide variety of new applications and operating environments, given their ability to repel thousands of times more organic compounds than standard membranes. The company is building a suite of membrane products with these and other capabilities, bringing the precision and reliability of filtration to historically underserved markets.

“ZwitterCo has unlocked the true potential of zwitterions for water treatment, resulting in a leap in membrane performance,” said Chris Drover, co-founder, and CTO of ZwitterCo. “The mechanisms behind fouling and degradation that plague traditional membranes do not apply to our products.”

A zwitterion is a special class of molecule that is “hydrophilic” or highly attractive to water molecules. ZwitterCo’s patented zwitterionic copolymers self-assemble into hydrophilic channels, acting like flumes at a water park, ushering through H₂O molecules, and repelling everything unable to flow through its narrow pores, including organic compounds such as oils, fats, greases, or proteins.

ZwitterCo’s first product, a superfiltration (SF) membrane, targets challenging industrial wastewaters for treatment and reuse. “Today, over 4 billion people experience severe water scarcity at various times during the year,” said Alex Rappaport, co-founder and CEO of ZwitterCo. “As the world works to adapt to population growth and climate change, reusing wastewater safely and economically is imperative.”

Since introducing their SF in 2021, ZwitterCo has booked over a dozen commercial projects and completed dozens more successful pilots. As a result, ZwitterCo is already tackling some of the hardest wastewater treatment challenges, including digestates, leachates, O&G-produced water, poultry & dairy, bioprocessing, and food & beverage wastewaters. Additionally, ZwitterCo membranes are used in novel process applications where fouling recovery, ruggedness, and exacting tolerances are essential, such as protein extraction from bio-fermentation.

The Series A funds will allow the company to add applications development, increase its pilot fleet, and build inventory to meet the strong demand for ZwitterCo products. The funding will also commission ZwitterCo’s state-of-the-art innovation center just north of Boston, accelerating the development of new membrane products based on ZwitterCo chemistry.

One-sixth of the world’s freshwater withdrawals, an estimated 500 billion gallons a day, become industrial and agricultural wastewater. Accelerated depletion of our groundwaters and aquifers, as well as protracted droughts, are worsening water scarcity and threatening food production. As a result, safe and economical wastewater reuse has never been more critical.

“At DCVC, we invest in Deep Tech companies that address urgent, global problems while providing outsized returns for our investors,” said Jason Pontin, a Partner at DCVC and Chairman of ZwitterCo’s Board of Directors. “ZwitterCo’s novel membrane chemistry will help solve water scarcity around the globe by making it easy and affordable for a wide variety of industries to adopt water reuse.”

DCVC led ZwitterCo’s Series A financing, with participation from new investors Heritage Group Ventures, Genoa Ventures, and Mott Corporation. Existing investors MANN+HUMMEL Corporate Ventures, Burnt Island Ventures, and R-Cubed Capital Partners also participated in this round.

 

About ZwitterCo

ZwitterCo’s breakthrough membrane technology enables filtration for the most challenging separations. The company leverages the remarkable power of zwitterions to create an intensely hydrophilic membrane that resists fouling from organic molecules such as fats, oils, and proteins. The unique properties of their membranes give a pathway to the next generation of water treatment, precision separation, and resource recapture. ZwitterCo has been recognized by the Department of Energy, the National Science Foundation, and the Massachusetts Clean Energy Center as a leader in clean water technologies. For more information, visit zwitterco.com.

Vartega Announces New Facility, Increased Capacity, and Funding

Pecos Logistics Park in Denver, CO

Golden, CO – August 16, 2022 – Vartega – a recycler of carbon fiber and composite materials – is expanding its footprint and is increasing production capacity 10X from its current facility in Golden, CO. Vartega’s new 50,000 square foot manufacturing facility and headquarters will be located in Building 2 of the recently completed Pecos Logistics Park (owned by institutional investors advised by J.P. Morgan Global Alternatives) in Denver, CO.

The facility was selected to meet the growing demand for recycled carbon fiber and Vartega’s EasyFeed carbon fiber bundles used as a low-cost alternative to virgin material for automotive and other industrial applications. With a planned capacity of 2,000 metric tons per year, Vartega will continue to serve its growing customer base in North America as well as address new opportunities in Europe and Asia.

The expansion coincides with a recent capital infusion led by Belle Impact Fund with participation from Autodesk Foundation, Keiretsu Forum, Texas HALO Fund, SWAN Impact Network, New Climate Ventures, HG Ventures, Denver Angels, and other former and new investors. In addition to supporting the new facility and increased capacity, the oversubscribed $5M Series Seed II funds will be used to help grow the Vartega team and support Vartega’s objective to achieve ISO 9001 certification in 2024.

“The Vartega team has worked diligently over the past several years to develop products and processes that solve challenging waste problems,” says Andrew Maxey, CEO of Vartega. “We’re grateful for the considerable trust that our customers and investors have put in us to meet the needs of a changing world. Advanced materials recycling is no longer nice to have, it’s a must have. Our new facility will be a world class manufacturing environment that will allow our team to operate safely and efficiently to deliver a reliable source of high-quality recycled carbon fiber while contributing to our community and providing a meaningful benefit to all our stakeholders.”

A future open house and ribbon cutting will celebrate Vartega’s progress and key partners.

About Vartega

Vartega is making carbon fiber more accessible by solving the world’s toughest advanced materials recycling challenges to create circular supply chains, decarbonize transportation, and enable a sustainable future. Vartega’s carbon fiber and specialty thermoplastics are used in sporting goods, consumer electronics, additive manufacturing, and vehicle lightweighting. Learn more at www.vartega.com.

About J.P. Morgan Global Alternatives

J.P. Morgan Global Alternatives is the alternative investment arm of J.P. Morgan Asset Management. With more than 50 years as an alternatives investment manager, US$218 billion in assets under management and more than 700 professionals (as of March 31, 2022), J.P. Morgan offers strategies across the alternative investment spectrum including real estate, private equity, private credit, hedge funds, infrastructure, transportation, timber and liquid alternatives. Operating from offices throughout the Americas, Europe and Asia Pacific, our independent alternative investment engines combine specialist knowledge and singular focus with the global reach, vast resources and powerful infrastructure of J.P. Morgan to help meet each client’s specific objectives. For more information, visit jpmorgan.com/am.

Simplifyber Secures $3.5M Seed Investment to Reinvent How Clothing is Made, with Sustainable, Advanced Manufacturing

Led by fashion designer Maria Intscher-Owrang, company will leverage its additive manufacturing technology to bring economically competitive biodegradable garments to market

NEW YORK, July 6, 2022 /PRNewswire/ — Simplifyber, Inc., creator of the world’s first fully-molded garment and shoe uppers made directly from a cellulose-based liquid, announced today the closing of a $3.5M round of seed funding, led by At One Ventures, with participation from Techstars, Heritage Group Ventures, The Helm, W Fund, Jetstream Ventures, Plug & Play Ventures, REFASHIOND Ventures, CapitalX Ventures, Keeler Investments Group and others.

The company has developed a novel approach to clothing and accessory manufacturing that removes traditional spinning, weaving, cutting, and sewing and replaces it with a sustainable, less resource-intensive process, and fully biodegradable solution – cutting out 60% of the steps and reducing the 35% of materials in the fashion supply chain that ends up as waste.

“I saw how additive manufacturing (e.g., 3D printing) was disrupting nearly every other industry, but not in fashion. I set out to find the people that could make this a reality,” remarked Simplifyber co-founder and CEO Maria Intscher-Owrang, who led a 20+ year career as a fashion designer and director at leading fashion houses, including Vera Wang, Calvin Klein, Alexander McQueen, Dirk Bikkembergs, and Edun.

“We discovered a way to create clothing using soft plant fibers,” she explained. “We start with a liquid cellulose – made in a lab, not in a mill – which is then poured on specially-designed molds and dried, eliminating fabric waste altogether and allowing on-demand, stock-free service.”

Simplifyber’s cellulose formula is 100% natural, derived from a combination of wood pulp and other plant-based material and non-toxic additives, so the result is a fully biodegradable product that can be easily returned to nature, recyclable as paper and as clothing.

“With its single-step process for clothing making, Simplifyber has the potential to beat the unit economics of polyester, becoming an economically and environmentally viable solution against plastic waste,” said Laurie Menoud, Partner, At One Ventures. “We’re looking forward to partnering with the team to bring this solution to scale. We believe Simplifyber could be the apparel of the future: They are not only beautifully designed but have a low carbon footprint and are price-accessible, which is a significant differentiation from other sustainable clothing brands.”

With its manufacturing of daily wear items such as T-shirts, Simplifyber aims to replace wovens and knits, which together represent a $25B market globally. Additionally, the company has collaborated on a pilot with HP to create molded shoe uppers, also from a custom formula derived from natural fibers.

 

About Simplifyber

Simplifyber creates the “Apparel of the Future” through its soft, cotton-like biodegradable clothing and footwear that are made by injecting liquid into molds, without the need for cutting, sewing, or weaving; transforming the world’s Apparel and Footwear Industries through its proprietary fully-biodegradable material formula and sustainable additive manufacturing system.

Contact: press@simplifyber.com

SOURCE Simplifyber, Inc.

INDIANAPOLIS – June 28, 2022 – HG Ventures, the corporate venture arm of The Heritage Group, today announced its participation in a $25 million Series B raise for Circulor, the only proven technology solution that tracks materials, emissions, and compliance within manufacturing and recycling supply chains. Circulor’s suite of technologies gives users data-driven insights into their business to enable responsible sourcing. Through blockchain and AI software as a service (SaaS) technology, Circulor’s platform advances traceability, transparency, and risk management solutions.

“Circulor is helping companies track emissions and prove the sources of their raw materials, which enables decarbonization and mitigates supply chain risks,” said John Glushik, Managing Director at HG Ventures. “HG Ventures is excited to support Circulor’s team in their mission to develop complete industrial supply chain traceability and resiliency.”

Manufacturers in the automotive, extractive, recycling, and construction industries are looking for solutions to track the sources of their materials and decarbonize their operations. Leaders in these industries are seeking a supply chain that is traceable, ethical, and sustainable. Circulor enables them to be transparent about the source of their raw materials, increase the use of recycled plastic, reduce the flow of plastics into oceans, cut greenhouse gas emissions, and decarbonize their materials.

“We’re thrilled to partner with HG Ventures to advance secure and responsible supply chains,” said Douglas Johnson-Poensgen, Circulor CEO. “Digital transparency allows companies to track their material use and be more ethical and informed, and we’re proud to be working with such an experienced partner as we grow.”

HG Ventures invests in growing businesses that are disrupting traditional industries—be it through new processes, technology or materials. The team excels in partnering with visionary entrepreneurs to achieve dramatic business growth. HG Ventures is the corporate venture arm of The Heritage Group, which has more than 5,000 employees and 30 operating companies worldwide and is committed to a sustainable world.

Media Contacts:
Regan Keller
Antenna Group for HG Ventures
hg.ventures@antennagroup.com

Franziska Grammes
Circulor
fg@circulor.com

About HG Ventures:
HG Ventures is the corporate venture arm of The Heritage Group, headquartered in Indianapolis, Ind. HG Ventures supports innovation and growth across The Heritage Group by investing and partnering with innovative, high-growth companies to support a sustainable future. The team leverages the world-class expertise of The Heritage Group operating companies and research center to offer a unique value proposition to its portfolio company partners. www.hgventures.com.

About Circulor:
Circulor empowers organizations to have full visibility of their supply chains. The London-based company offers the most mature, proven, and complete technology software solution available to track materials with high environmental and human rights impacts as they change state within manufacturing and recycling supply chains. With Circulor, businesses can follow the physical flow of critical materials from extraction to final production, as well as associated ESG characteristics and embedded carbon across Scope 1, 2, and 3 emissions. The tech company was founded in 2017 in the UK, with offices in the US, Germany, Singapore, and Australia. The company has been named a Technology Pioneer by the World Economic Forum, Global Cleantech 100 and a Future Unicorn by DIGITALEUROPE.
More information can be found at www.circulor.com. Follow us on LinkedIn and Twitter.

INDIANAPOLIS – Biosynthetic® Technologies, LLC today announced that it has raised $7.5 million in a series A-1 funding led by HG Ventures, the corporate venture arm of The Heritage Group, headquartered in Indianapolis, Ind.

Biosynthetic Technologies is developing and marketing a new class of high-performance bio-based oil, or Estolides, that is biodegradable, non-bioaccumulative, and non-toxic. The patented Estolides can be used as a sustainable alternative to petroleum in lubricants, metalworking fluids, personal care items, and many other applications. These products also provide improved environmental, social, and governance (ESG) calculations sought after by corporations on a global scale.

Funding from this series will be used to scale operations, sales and manufacturing, support work on global regulatory compliance, and enable a deeper lifecycle assessment. The money also helped fund Biosynthetic Technologies’ acquisition of Innoleo®, LLC, a distributor of quality Oleo derivatives.

“We are excited to partner with HG Ventures,” said Mark Miller, CEO of Biosynthetic Technologies. “In addition to capital, HG Ventures has brought passion, expertise, and assets to support us as we’ve executed our strategy for success. The market traction for our products across a wide range of industries and applications has provided us with a bright future. Everyone is seeing the need for more sustainable products, moving toward carbon neutrality, and improving ESG standards. As such, Biosynthetic Technologies is uniquely positioned to expand our business globally.”

“Biosynthetic Technologies’ focus on delivering innovative solutions for a sustainable future in industrial markets aligns with HG Ventures’ mission of supporting cutting-edge innovators in markets where we can help them grow,” said John Glushik, Managing Director of HG Ventures. “We appreciate the opportunity to support Biosynthetic Technologies in a manner that enables transformational growth and expansion of their product offering of sustainable materials.”

For more information on Biosynthetic Technologies fundraising efforts please contact Mark Miller at memiller@biosynthetic.com

Media Contact
Debby Neubauer
Biosynthetic® Technologies
O: (317) 556-1050 M: 317-697-7304
dneubauer@biosynthetic.com

About Biosynthetic® Technologies LLC
Biosynthetic® Technologies manufactures a revolutionary new class of biobased synthetic compounds called Estolides that are made from organic fatty acids found in various bio-derived oils. These highly functional biosynthetic oils have numerous uses in lubricant, automotive, marine, pharma and personal care applications and can be used as the primary base oil of a formulation, a component of a base oil co-blend, or even as an additive. In addition to their high-performance properties, these renewable oils are biodegradable and nontoxic. Biosynthetic Technologies strives to make their mark on the world by delivering innovations for a sustainable future. For more information about Biosynthetic™ Technologies, please visit www.biosynthetic.com and follow us on LinkedIn.

HG Ventures
HG Ventures is the corporate venture arm of The Heritage Group, headquartered in Indianapolis, Ind. HG Ventures supports innovation and growth across The Heritage Group by investing and partnering with innovative, high-growth companies to support a sustainable future. We leverage the world-class expertise of The Heritage Group operating companies and research center to offer a unique value proposition to our portfolio company partners. www.hgventures.com.