When Carol Hirschmugl and Marija Gajdardziska-Josifovska discovered a new material in 2010 while working for the University of Wisconsin-Milwaukee, it was a fraction of the size of the end of a single hair.
Since founding a company in 2016 to commercialize that discovery into a new material that could enable safer, faster-charging and higher-capacity lithium-ion batteries, their focus has been scaling up production of the novel material, called COphite.
Today, the company — COnovate Inc. — can make around a cup of the powdered material per day, CEO Hirschmugl said. The company on Thursday said it has raised nearly $1 million from investors to finance further production scale so it can demonstrate the material's effectiveness to potential customers.
The financing round, which was in the form of a simple agreement for future equity (SAFE), was led by Green Bay's Tundra Angels, Milwaukee Venture Partners and Jennifer Abele. A mix of other new and previous COnovate investors also participated in the financing round.
COnovate is preparing to enter the battery market as the industry is shifting from using relatively standardized batteries to "designer batteries," built uniquely for different applications, Hirschmugl said. This creates a need for new battery materials like COphite, she added.
The Milwaukee startup is initially targeting its material for use in power tools, drones and electric bicycles. Ultimately it's after the fast-growing electric vehicle (EV) market, Hirschmugl said.
COnovate also announced Thursday that Craig Rigby joined the company's board as chairman. Rigby is vice president of technology at Milwaukee-based automotive battery technology firm Clarios, which was part of Johnson Controls until 2019. Rigby isn't representing Clarios on the board, Hirschmugl said.
Having outgrown its current space at UWM, COnovate is looking to rent 3,000 to 5,000 square feet of mixed-use industrial space, Hirschmugl said. The nine-person startup currently occupies about half that amount.
COnovate will use the new capital to continue scaling its material production; by the end of this year, it aims to produce about four flour bags' worth within a couple of days, Hirschmugl said. At that point, it will seek third-party validation to get independent data about the material's effectiveness in batteries.
"By the summer we'll be making a kilogram a day," Hirschmugl said. "You have to be at least at this 10-kilogram scale for it to be of interest (to) a chemical company."
COnovate, which is also working on a bio-renewable version of its material, plans to raise a priced equity financing round later this year, according to Thursday's announcement.
Tundra Angels, which is part of the Greater Green Bay Chamber's economic development arm, also led COnovate's first financing round, which the company announced last spring.
COnovate was the first Wisconsin-based angel investment for Abele, the senior executive director of strategic partnerships at UWM and senior adviser to Milwaukee acting Mayor Cavalier Johnson. She noted that her investments are personal and not related to UWM.
To back more companies like COnovate, Abele said she intends to start a venture capital firm that would invest in startup founders that are traditionally left out of many VC financing deals, including women.
