MacroFab has secured fresh investment to the tune of $42 million. Photo via macrofab.com

A Houston company has nearly doubled its total raised with its latest funding round.

MacroFab, a Houston-based electronics manufacturing platform, has announced $42 million in new growth capital led by Foundry and joined by BMW i Ventures, as well as existing investors Edison Partners and ATX Venture Partners. The platform was first launched by Misha Govshteyn and Chris Church in 2015.

“Given MacroFab’s compelling solutions to electronics manufacturing challenges and Foundry’s successful history with parallel companies, our investment is a perfect fit," Foundry Partner Seth Levine says in a news release. "This is a unique opportunity to be part of next generation cloud manufacturing and we’re excited to be joining forces with Misha and his team."

MacroFab built a platform that manage electronics manufacturing and enables real-time supply chain and inventory data. The platform can help customers go from prototype to high-scale production with its network of more than 100 factories across the continent.

“Electronics manufacturing is moving toward resilience and flexibility to reduce supply chain disruptions. These are long term trends recognized by Foundry and BMW i Ventures, who joined this round as investors,” says Govshteyn, MacroFab’s CEO, in a news release. “We are in the earliest stages of repositioning the supply chain to be more localized and focused on what matters to customers most — the ability to deliver products on time, meet changing requirements, and achieve a more sustainable ecological footprint. MacroFab is fundamental to building this new operating model.”

The company has seen significant growth amid the evolution of global supply chain that's taken place over the past few years. According to the company, shipments were up 275 percent year-over-year. To keep up with growth, MacroFab doubled its workforce, per the release, and opened a new facility in Mexico.

“Most companies have felt the pain of inflexible and fragile supply chains," says Daniel Herscovici, partner at Edison Partners, a growth equity firm focused on technology-enabled and SaaS solutions. "MacroFab’s cloud manufacturing platform is transforming contract manufacturing, enabling ‘Made in North America, faster design iteration, and increased supply chain resiliency, among its benefits. Edison Partners shares the company’s vision for addressing this more than $100 billion global market."

Misha Govshteyn, CEO of MacroFab Misha Govshteyn is the founder and CEO of MacroFab. Photo courtesy of MacroFab

MacroFab's latest $15 million round will help it expand and grow throughout North America. Photo via macrofab.com

Houston-based electronics manufacturing biz raises $15M in new funding

money moves

A Houston company that has optimized electronics manufacturing by setting up a digital platform connecting a network of factories across North America has raised its latest round of funding.

MacroFab closed a $15 million series B round led by New Jersey-based Edison Partners. ATX Venture Partners also participated, along with strategic investor Altium Limited, a leader in the electronics design software space.

The new funds will go toward keeping up with MacroFab's growth, specifically in expanding in North America and an increased investment in research and development, sales and marketing, and the opening of a new distribution center for international logistics this summer, according to a news release.

"MacroFab customers found themselves in a perfect storm last year, and went from being curious about cloud-enabled manufacturing to going all-in," says Misha Govshteyn, MacroFab CEO, in the release. "The turbulence started with the trade war and tariffs, and only accelerated with massive delays in delivering products from overseas and the ongoing microchip availability crisis.”

Govshteyn says the pandemic has affected traditional manufacturing processes. While some companies utilized manufacturing in China, international travel meant for impossible in-person troubleshooting. Digitization became increasingly optimal.

"Supply chain leaders are turning to MacroFab and our digital platform as a way to move faster," Govshteyn continues in the release. "If you're not as big as Apple, but want to build across multiple factories in parallel, our platform is the only way to do so without incurring immense costs".

MacroFab was founded in 2013 and has raised both seed and series A financing led by ATX Venture Partners and Techstars. Govshteyn and his co-founders — Chris Church, who serves as chief product officer, Chris Granberry, the company's COO — previously co-founded Alert Logic.

The trio of entrepreneurs reconvened to address an opportunity in a market that was home to an antiquated process within manufacturing. Lately, MacroFab's clients are looking to reduce waste.

"A typical electronics factory is only 60 percent utilized, according to New Venture Research, which is startlingly inefficient," Church says in the release. "A number of our customers focused on Environmental and Social Governance (ESG) issues see our ability to tap into this capacity as a step towards ecologically sustainable production."

The deal includes a new board member for MacroFab. Daniel Herscovici, partner at Edison Partners, will join MacroFab's board of directors

The company has "a proven track record of building successful SaaS and cloud infrastructure businesses together, and are now bringing supply chain innovation to the market at a time when global electronics manufacturing is facing disruption," Herscovici says in the release. "MacroFab is at the center of driving the digital transformation needed to unlock factory capacity, manufacturing agility and efficiency, and even new economic and labor markets for electronics makers across North America."

MacroFab's raise also included a new strategic partnership with Altium, one of the largest players in the electronics design space, per the release.

"Altium shares MacroFab's vision for digital transformation of manufacturing in the electronics industry," says Ted Pawela, chief ecosystem officer at Altium. "Our investment in, and partnership with MacroFab is a huge step forward in connecting design, supply chain, and manufacturing to accelerate innovation."

Houston-based MacroFab has created the Uber or Airbnb of electronics manufacturing. Getty Images

Houston electronics manufacturing company gears up for growth

On the line

It takes an unnecessarily long time for electronic devices to get from idea to reality — and much of that is due to inefficiency in manufacturing. Just getting a prototype together takes weeks of back and forth between the engineer and the manufacturer.

"The business model for contract manufacturing hadn't changed in 30 years," Chris Church says. "It was phone calls, emails, going out and playing golf, going to lunch, and negotiating everything endlessly."

Houston-based MacroFab is addressing these antiquated and outdated ways of manufacturing and changing the way electronics manufacturing is done. For its revolutionary work, the company has consistently seen its revenue at least double — sometimes tripling or quadrupling — every year, and projects to at least triple in 2019.

Addressing an underserved market
Church — who has a background in hardware development, specifically within robotics — created MacroFab in 2013 and launched the platform in 2015. Misha Govshteyn joined the board in 2014 and became CEO last summer. The duo co-founded cloud-based security-as-a-service company, Alert Logic, in Houston in 2002.

Using its custom software, MacroFab enables customers to upload their designs through the website, where they can then receive projected timeline and pricing information from the get go. The company has its own manufacturing area in its office for prototypes and small orders, but its network of large manufacturers is a key part of the MacroFab's growth equation.

The company has about 20 manufacturing plants as partners that can pick up manufacturing jobs from MacroFab customers when the plant has space on its lines up for grabs. Rather than let available capacity go to waste, these plants can easily pick up the design and materials to start production.

"It's not dissimilar to what Uber is doing with cars — there's a lot of people with cars that could give you a ride if they knew you were out there," Govshteyn says. "It's that matchmaking function is essentially what we're doing with our customers."

The manufacturing partners benefit from jobs they otherwise wouldn't have, and the MacroFab customers get access to a plant that they didn't have to do the legwork to find. Govshteyn says a he's heard horror stories from people who had orders that were unceremoniously dropped by a manufacturer because another one of its clients just placed a large order.

"That shouldn't happen. If a factory gets too busy, it should be easy enough to take that job and move it somewhere else," Govshteyn says. "But, right now, there's not a way to do that."

Using cloud technology, the MacroFab platform can easily share the design and translate it to any given factory, Church says. They also have a technology that combine smaller orders together so there's no wasted resources, which brings down the cost for the customer.

While usually a company might have to find a new manufacturer as they scale up and start making larger orders, MacroFab customers don't have to start from scratch to find a new plant that can take their order — MacroFab will do the matchmaking for them.

"We've created and are continuing to build a marketplace for excess manufacturing capacity," Church says.

MacroFab owns the customer experience and the sales aspect — ensuring a more positive and consistent experience — while the manufacturers can just take the jobs and go.

Scaling up
The manufacturing marketplace is a newer focus for MacroFab — the company just launched it in beta this year — and is a big proponent of the company's growth. Before, the company was limited to what it could produce in its own factory taking on prototype and small orders. Now, with access to the manufacturers, the company has served 1,700 customers, building 500,000 units for about 4,000 different products. Those figures, Church says, are scaling up so rapidly as they expand to new partners.

"This is the first quarter where more gets produced outside of our factory than inside of it," Govshteyn says. "By this time in Q1, 75 percent of our revenue will [come from outside manufacturing plants.]"

Since manufacturing plants haven't historically collaborated, Govshteyn says the reception from manufacturers has been "cautiously optimistic." But then they realize they are getting customers for free — all they have to do is meet the requirements and deliver on time, he says.

"It's great for them to see that their factory is only half used, but then they can fill it up with jobs from MacroFab," Govshteyn says.

Houston has been a great city for MacroFab with its port manufacturing and logistics, two things Govshteyn says MacroFab is focusing on.

"At the end of the day, we're a manufacturing company, and I think we'll dabble in logistics," he says. "There's a lot worse places to start a logistics-heavy company."

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Houston doctor wins NIH grant to test virtual reality for ICU delirium

Virtual healing

Think of it like a reverse version of The Matrix. A person wakes up in a hospital bed and gets plugged into a virtual reality game world in order to heal.

While it may sound far-fetched, Dr. Hina Faisal, a Houston Methodist critical care specialist in the Department of Surgery, was recently awarded a $242,000 grant from the National Institute of Health to test the effects of VR games on patients coming out of major surgery in the intensive care unit (ICU).

The five-year study will focus on older patients using mental stimulation techniques to reduce incidences of delirium. The award comes courtesy of the National Institute on Aging K76 Paul B. Beeson Emerging Leaders Career Development Award in Aging.

“As the population of older adults continues to grow, the need for effective, scalable interventions to prevent postoperative complications like delirium is more important than ever,” Faisal said in a news release.

ICU delirium is a serious condition that can lead to major complications and even death. Roughly 87 percent of patients who undergo major surgery involving intubation will experience some form of delirium coming out of anesthesia. Causes can range from infection to drug reactions. While many cases are mild, prolonged ICU delirium may prevent a patient from following medical advice or even cause them to hurt themselves.

Using VR games to treat delirium is a rapidly emerging and exciting branch of medicine. Studies show that VR games can help promote mental activity, memory and cognitive function. However, the full benefits are currently unknown as studies have been hampered by small patient populations.

Faisal believes that half of all ICU delirium cases are preventable through VR treatment. Currently, a general lack of knowledge and resources has been holding back the advancement of the treatment.

Hopefully, the work of Faisal in one of the busiest medical cities in the world can alleviate that problem as she spends the next half-decade plugging patients into games to aid in their healing.

Houston scientists develop breakthrough AI-driven process to design, decode genetic circuits

biotech breakthrough

Researchers at Rice University have developed an innovative process that uses artificial intelligence to better understand complex genetic circuits.

A study, published in the journal Nature, shows how the new technique, known as “Combining Long- and Short-range Sequencing to Investigate Genetic Complexity,” or CLASSIC, can generate and test millions of DNA designs at the same time, which, according to Rice.

The work was led by Rice’s Caleb Bashor, deputy director for the Rice Synthetic Biology Institute and member of the Ken Kennedy Institute. Bashor has been working with Kshitij Rai and Ronan O’Connell, co-first authors on the study, on the CLASSIC for over four years, according to a news release.

“Our work is the first demonstration that you can use AI for designing these circuits,” Bashor said in the release.

Genetic circuits program cells to perform specific functions. Finding the circuit that matches a desired function or performance "can be like looking for a needle in a haystack," Bashor explained. This work looked to find a solution to this long-standing challenge in synthetic biology.

First, the team developed a library of proof-of-concept genetic circuits. It then pooled the circuits and inserted them into human cells. Next, they used long-read and short-read DNA sequencing to create "a master map" that linked each circuit to how it performed.

The data was then used to train AI and machine learning models to analyze circuits and make accurate predictions for how untested circuits might perform.

“We end up with measurements for a lot of the possible designs but not all of them, and that is where building the (machine learning) model comes in,” O’Connell explained in the release. “We use the data to train a model that can understand this landscape and predict things we were not able to generate data on.”

Ultimately, the researchers believe the circuit characterization and AI-driven understanding can speed up synthetic biology, lead to faster development of biotechnology and potentially support more cell-based therapy breakthroughs by shedding new light on how gene circuits behave, according to Rice.

“We think AI/ML-driven design is the future of synthetic biology,” Bashor added in the release. “As we collect more data using CLASSIC, we can train more complex models to make predictions for how to design even more sophisticated and useful cellular biotechnology.”

The team at Rice also worked with Pankaj Mehta’s group in the department of physics at Boston University and Todd Treangen’s group in Rice’s computer science department. Research was supported by the National Institutes of Health, Office of Naval Research, the Robert J. Kleberg Jr. and Helen C. Kleberg Foundation, the American Heart Association, National Library of Medicine, the National Science Foundation, Rice’s Ken Kennedy Institute and the Rice Institute of Synthetic Biology.

James Collins, a biomedical engineer at MIT who helped establish synthetic biology as a field, added that CLASSIC is a new, defining milestone.

“Twenty-five years ago, those early circuits showed that we could program living cells, but they were built one at a time, each requiring months of tuning,” said Collins, who was one of the inventors of the toggle switch. “Bashor and colleagues have now delivered a transformative leap: CLASSIC brings high-throughput engineering to gene circuit design, allowing exploration of combinatorial spaces that were previously out of reach. Their platform doesn’t just accelerate the design-build-test-learn cycle; it redefines its scale, marking a new era of data-driven synthetic biology.”