Fusion Coolant Systems, the Canton, MI-based industrial tech startup spun out of the University of Michigan, has raised an $8 million Series C funding round. The investment was led by Material Impact, a Boston venture capital firm, and Michigan Capital Advisors, with participation from existing investors, including U-M’s Michigan Investment in New Technology Startups (MINTS), Amherst Fund, and Invest Michigan.
“This is growth capital,” says Steve Skerlos, Fusion Coolant founder and CEO. The company plans to use its new funding to expand operations, hire sales and engineering personnel “that maintains our insurgent culture,” and add equipment. “It’s time to hit the go button,” he adds.
The company has developed a patented system that uses supercritical carbon dioxide to cool industrial equipment and as a cutting fluid—a lubricant required in metalworking procedures like stamping and machining—allowing for “unprecedented heat removal potential and lubricity” while eliminating health and environmental safety hazards, it says. (Typically, water is used to cool industrial equipment during the manufacturing process, which can result in a toxic sludge of chemical runoff, Skerlos explains. Fusion Coolant’s product was developed to avoid those problems.)
“It’s faster, more efficient, and cleaner,” Skerlos says of the company’s process. Most of Fusion Coolant’s customers are in large manufacturing sectors such as biomedical, aerospace, and automotive. “The biomedical industry has figured out we have something, and it’s been our springboard to commercial success,” he says. “The technology can apply anywhere you cut metal or plastic.”
The five-person company has raised more than $10 million in total since it was founded in 2011. Skerlos says Fusion Coolant currently has about four dozen of its systems “running in the field.” Although he declined to name the customers due to confidentiality agreements, he says “three of the top four biomedical companies in the world have adopted our technology, and one of the two largest aircraft manufacturers, and we did this even though every company initially said they don’t buy equipment from startups.”
Add Skerlos to the list of people developing industrial technology who feel the manufacturing sector is heating up. “It’s gotten cool again,” he confirms. “Manufacturing is more closely tied to innovation and technology. As an educator, I’m hearing more students talking about it.” Plus, with technological advances making the manufacturing process more efficient, it’s easier to maintain and grow U.S. operations, he says.
As for Fusion Coolant, Skerlos says he expects the company to double its revenues from last year. “Now that we’ve proven our technology and gotten some amazing partners, we need to maintain our culture of changing the industry,” he says. “We want to grow quickly without losing our culture while we develop new applications.”
