Provided by Crain's Cleveland Business
Written by Chuck Soder
Stanton Advanced Ceramics LLC will receive an $800,000 investment from the North Coast Angel Fund LLC and other individual investors.
The Cleveland startup, which has developed a material to protect the insides of high-temperature furnaces, will use most of the money to hire four sales employees with technical backgrounds over the next two years. The rest of the funds will be used to further validate and adapt the technology for the aluminum and steel industries, said Karl-Heinz Schofalvi, founder and president.
Stanton’s only current employees are Mr. Schofalvi and CEO Robert Panthofer.
The material resists corrosion better than current lining material used in the aluminum industry, Stanton officials said, based on tests conducted during the past year by one of the top five aluminum producers in the United States.
A steelmaker began testing the material three months ago, Mr. Schofalvi said. He declined to identify the companies doing the tests.
The material could help manufacturers save money on maintenance and down time, he said.
Molten aluminum, for instance, eats through current ceramic lining materials near its surface, where it is exposed to oxygen, at a rate of four inches every six months. However, a six-month simulation that used hotter aluminum over 28 days failed to eat through a quarter inch of Stanton’s material.
Glass industry on the radar
Mr. Schofalvi expects similar results in steel furnaces, which must be shut down about once a week to have their linings replaced. The company later plans to explore the glass industry and other uses for the material.
The material lasts longer because cracks don’t spread through it quickly and because it has fewer impurities that cause corrosion, Mr. Schofalvi said.
The North Coast Angel Fund contributed $200,000 of the total $800,000 investment. A majority of the total came from North Coast and investments made by individual members, though individuals outside the investment group contributed as well.
North Coast decided to back Stanton because, in addition to its good test results and strong management team, the company could have a major impact on its targeted industries, said managing member Clay Rankin.
“It is a company we felt had enormous potential in an industry that is cost-sensitive,” Mr. Rankin said.
Stanton Advanced Ceramics was founded in 2000. Since 2004 it has received three investments totaling $800,000 from nonprofit venture developer JumpStart Inc. The company was JumpStart’s first investment.
Stanton is North Coast’s fourth investment.
The fund, officially formed in August 2006, is a group of 99 investors who contributed to a pool of money, which they use to invest in early-stage technology companies.