58 early-stage tech companies receive $3M in support from state’s tech startup stabilization fund
A total of 58 early-stage tech companies are receiving direct investments or loans from the state’s Tech Startup Stabilization Fund to assist them during the COVID-19 outbreak, the Michigan Economic Development Corporation announced Thursday.
Announced in mid-April, the Tech Startup Stabilization Fund has been administered by ID Ventures in Detroit to support early-stage tech companies in Michigan with fewer than 50 employees and a demonstrated need for support due to the economic impacts of the pandemic.
“This outbreak presented unprecedented challenges for businesses of all sizes over the past three months, and we are proud to help support Michigan’s small businesses to not only survive COVID-19, but continue innovating long after,” said Mark A. Burton, CEO of MEDC. “The technologies and discoveries these small businesses are pursuing will have an invaluable impact on our ability to strengthen and rebuild our state’s economy over the coming months as we work to enable economic prosperity across all corners of our state.”
The Tech Startup Stabilization Fund prioritized support for early-stage companies that are headquartered in Michigan and that demonstrated a strong customer value proposition, comprised a team with proven execution capability, and pre-COVID-19 were on a path for an additional round of funding, in addition to other criteria. Support through the fund ranged from $10,000 to $125,000 depending on demonstrated need and allowed recipients to retain their workforce, advance vital high-tech research initiatives and support operating costs, in addition to meeting other critical needs.
Among the 58 high-tech companies to receive support through the fund, many represent regionally diverse areas in the state, including Houghton and Hancock in Michigan’s Upper Peninsula, Grand Rapids, Jackson and Troy. While 53% of the companies represent the advanced information technology sector, the range of industries represented includes life sciences, mobility and advanced manufacturing – all key industries within the MEDC’s overall strategic plan.
Based out of Ann Arbor, for example, the mobility company Bedestrian provides a last mile driverless delivery system, offering autonomous, robotic deliveries within and around hospital and healthcare facilities. With support from the Tech Startup Stabilization Fund, Bedestrian has been able to sustain the economic impacts of the outbreak while leveraging its autonomous delivery vehicle to support frontline workers and accelerating the development of its solution to meet the delivery needs for hospitals throughout Michigan communities. In doing so, Bedestrian is minimizing the amount of person-to-person contact and mitigating the potential spread of the COVID-19 virus.
“I’m very glad that Bedestrian is among the roster of innovative companies to receive an award from the Tech Startup Stabilization Fund. And I’m thankful to the ID Ventures team’s efficient administration of this fund at this critical time,” said Bedestrian CEO Shadi T. Mere. “This fund shows that Michigan is responding proactively, not only to weather COVID-19, but to help innovative startups emerge stronger and spur the next economic growth cycle.”
The single Upper Michigan project awarded was Stabilux Biosciences, a Life Sciences industry out of Houghton.
Martin Dober, Managing Director of ID Ventures, said, "The companies that received funding from the Tech Startup Stabilization Fund represent some of Michigan's most exciting startups that were on a strong growth trajectory before the pandemic. This support, along with talented CEO leadership, has been critical for these companies to help weather the current crisis and continue their pre-COVID momentum."
Applications for the fund were available for three weeks, attracting 214 applications from companies throughout the state. During this time, the New Economy Initiative approved a $150,000 grant for the fund, aiming to provide additional support for more vulnerable minority and women entrepreneurs in southeast Michigan.
The Tech Startup Stabilization Fund builds off MEDC’s comprehensive support for small businesses and entrepreneurs around the state during COVID-19, including:
The $1.5 million Michigan Entrepreneur Resilience Fund through a partnership with Michigan Women Forward, which helped entrepreneurs and small businesses negatively impacted by COVID-19 recover from the outbreak, as well as assist them in meeting increased demands in support of COVID-19 response efforts.
Modifications to the Business Accelerator Fund to provide greater support to business accelerators in Michigan’s statewide SmartZone network that are serving startups and high-tech companies impacted by the COVID-19 outbreak.
The $3 million Pre-Seed III Fund to be administered by Michigan State University Foundation to better support entrepreneurs and tech startups with capital support, coaching, assistance with grant funding and more, providing vital support to early-stage companies to help put them on a path to survive the economic crisis and scale accordingly when the COVID-19 outbreak subsides.
To learn more about MEDC’s COVID-19 response programs and the impact they are having on economic recovery efforts, visit michiganbusiness.org/covid19response. Other resources for economic reopening efforts as well as businesses across Michigan struggling with economic losses as a result of the COVID-19 virus can be found online at michiganbusiness.org/covid19. The MEDC has also developed a FAQ for Michigan businesses and communities at michiganbusiness.org/covid19-faq.
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