New technology drives the economy and creates jobs, and innovation creates new technology. But all of these need capital to get going. Northern Kentucky has put all the pieces together with Jacobs Automation, a young company that has developed Maglev technology - the same technology that drives the high speed trains in Japan - for manufacturing.
Over the past year, a group of investment funds has backed Jacobs with $1.7 million in early financing. That capital will help continue Jacobs' commercialization efforts as it rolls out its products to global consumer product manufacturers.
"We're poised to grow rapidly," says Keith Jacobs, a mechanical engineer who founded Jacobs Automation in 2002. "This will revolutionize the way manufacturing is done."
The Maglev technology that Jacobs developed will enable manufacturers to be much more flexible with their packaging, something that has taken on greater importance over the past 10 to 15 years as one brand of product can now be offered in a variety of sizes and configurations.
In the past, a consumer products company would have needed to stop all production at a factory to re-configure manufacturing lines for updated products. This could mean hours of downtime and lost productivity. With the Maglev technology, that time has been cut down to minutes, as only a few software changes are necessary to make the needed size and shape adjustments.
"This creates a whole new world of possibilities," says Jacobs. "Now you can be more flexible. A bar of soap can be made (and packaged) in five different sizes with minimal changeover time."
Kentucky investors saw the value in Jacobs' idea, and have poured capital into the company, enabling its growth. This is the type of business that will spur economic development in Northern Kentucky, and they are eager to be a part of it.
More than six angel funds participated in this financing round for Jacobs. They included the Northern Kentucky Growth Fund, the Bluegrass Angels, Queen City Angels, Commonwealth Seed Capital, Blue Chip Ventures, and the Kentucky Science and Technology Corporation.
Casey Barach, vice president of entrepreneurship at the
Northern Kentucky e-zone, a division of Northern Kentucky Tri-ED, says Jacobs has attracted a lot of attention for its innovation, but he foresees it as just the first of many such local success stories.
"It's a great company with great leadership," Barach says of Jacobs. "It will create a number of solid high-tech jobs. We hope other companies see this and want to come work with Jacobs."
"Technology and advanced manufacturing goes back to the roots of the region. We grew up on manufacturing, so it's exciting to see this advance the way it has."
As news spreads that Kentucky has venture capital ready to be invested in promising technology, Barach says he hopes more such opportunities come along.
"We need to get the word out, so other folks will say, 'Hey, maybe I should look at the Northern Kentucky region for my business,'" says Barach.
Investment managers say they are enthusiastic about supporting solid opportunities such as Jacobs.
"This is the exactly the kind of thing Northern Kentucky needs to support," says David Heidrich, manager of the Northern Kentucky Growth Fund. "There definitely is a community of entrepreneurial capital available. We are looking for local businesses to invest in to promote growth."
David Goodnight, a member of the Bluegrass Angels, says the wide support that Jacobs received shows that the right combination of entrepreneurship and private financing can come together to create opportunities.
"That broad level of support speaks to the strength of the Northern Kentucky community and to Jacobs, " says Goodnight. "There is a tremendous community effort required to get these companies going. Each of these efforts are building on the momentum of the others."
Bob Frey of Queen City Angels says bringing together groups of investors from around the state took some effort, but that effort is beginning to pay off.
"Most new jobs are created by small companies, but they are very risky," says Frey. "You need private investors to take some of that risk. We're trying to get more companies to start up in Northern Kentucky, and until now they've lacked the investment vehicles to do so. Now that we've brought these investment groups together, I hope we have a lot more opportunities like Jacobs in Northern Kentucky."
For more information on the Northern Kentucky Growth Fund or any others listed, contact [email protected].
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