GRAND RAPIDS — Backed by a fresh injection of capital, a high-tech manufacturer in Grand Rapids plans to position itself for global growth.
eAgile Inc., a maker of radio frequency identification (RFID) products and software, hopes to raise up to $3 million to expand its overseas business serving the pharmaceutical, nutraceutical and food industries.
The global expansion strategy focuses on growing eAgile’s new eSeal line of intelligent packaging products, expanding its sales office in Switzerland, and purchasing additional equipment to support the company’s projected growth, said CEO Gary Burns, who co-founded the firm in 2009.
“We find there’s a real need to provide a safe supply chain in today’s world,” Burns told MiBiz. “The technology is there and is making it easy to implement our mission. … What we’re focused on is called the medical Internet of things (and) making sure that we can provide a safe and secure medical, over-the-counter drug and food supply chain.”
The eSeal product, the first full-scale production run of which launched in January 2016, embeds RFID technology into the caps and closures of pharmaceutical, nutraceutical, and food containers and other products. The technology allows companies to monitor those products throughout the production process and as they pass into the hands of consumers.
“We have a great business model and a family of products, but we know we need to grow them and implement them globally,” Burns said. “That requires capital.”
To date, the company has raised $600,000 in equity from one investor toward its total $3 million goal, according to documents filed in late January with the U.S. Securities and Exchange Commission.
eAgile plans to court all of its investors from Michigan, Burns said. While the company expects to complete the raise by the end of this month, he said it may take longer as investors come to the table.
“Until it’s done, it’s not done,” Burns said.
Since the majority of its pharmaceutical customers are located outside the U.S., eAgile plans to deploy capital to expand its sales office in Zurich, Switzerland. The company may also begin manufacturing in that country as it grows its European customer base, Burns said.
The company, which operates from a 40,000-square-foot production and assembly plant at 1100 Hynes St., also plans to invest in new production equipment and expects to expand its 30-person workforce in Grand Rapids. Burns declined to disclose how many employees eAgile planned to hire in 2016.
The RFID technology eAgile developed, along with its supporting software, provides health care providers, pharmacists, caretakers and consumers with myriad data points ranging from recall and dosage information to logging whether or not the end-consumer is taking the product correctly, Burns said.
The software that monitors eAgile’s RFID technology can be integrated into an organization’s existing infrastructure and be monitored from a smartphone.
“It’s the right patient, right time and correct amount,” Burns said. “That’s difficult even in hospital scenarios to get all those things right.”
As RFID technology matured after being introduced in the early 2000s, Burns and Peter Phaneuf launched eAgile in 2009. Their first venture, RF IDentics Inc., was acquired by California-based Avery Dennison Inc. in 2006.
In 2011, the co-founders decided to carve a niche for RFID technology in the health care and pharmaceutical industry.
“We looked at marketplace and said, ‘Where does this provide the best benefit?,’” Burns said. “It’s really through securing the supply chain and reducing errors in health care.”
In 2015, RFID technology comprised a $10.1 billion industry and is expected to grow to $13.2 billion by 2020, according to an industry report published by IDTechEx, a market research firm.
Since launching operations, eAgile has grown approximately 25 percent per year, however Burns declined to provide current sales figures.
Grand Rapids-based Charter Capital Partners LLC cited eAgile’s track record in the RFID industry and the business experience of its leadership team as two deciding factors as it invested in the company, said John Kershen, managing director of the investment banking firm.
A Charter Capital affiliate raised $100,000 from two investors for a fund for eAgile, according to a December filing with federal securities regulators.
“Even though it’s a relatively small company, they’ve really established themselves on a worldwide basis in the field of RFID technology,” Kershen said.
Burns said eAgile’s success with its raise underscores the entrepreneurial climate and willingness of investors to bet on emerging technology in Michigan.
Typically, high-tech capital is best raised on the West Coast or in Boston, Burns said. However, he noted that his company has had no trouble courting investors from across the state.
“We’re very fortunate to live in a community that supports entrepreneurship,” he said. “It’s a great place to start and grow a business.”