Ioxus forges triple-digit growth

ONEONTA — At the start of 2014, Ioxus, Inc. leased an additional 24,000 square feet of manufacturing space. The high-tech company, which is nearing production capacity, expects to open a second Oneonta facility in April for electrode and module assemblies of its ultracapacitors.

Ioxus was founded in 2007 and in headquartered in Oneonta in the former National Soccer Hall of Fame. Its two plants in Oneonta (40,000 and 24,000 square feet, respectively) are complemented by a research and development lab near Schenectady and another manufacturing plant in Japan (30,000 square feet), acquired in 2012 for its expertise in producing lightweight, high-power, and high-energy density cells using a prismatic pouch design. 

“Ioxus is the only fully integrated ultracapacitor design and manufacturing facility in North America,” says Mark E. McGough, the company’s president and CEO. “We produce a family of energy-storage products for transportation, renewable-energy, and industrial applications. Our proprietary ultracapacitors provide modules in a wide voltage range and in different configurations.”

Capacitors are electric-circuit elements designed to store an electric charge temporarily and have been used for more than 100 years to augment batteries by quickly absorbing and discharging energy. “Ultracapacitors are now 1,000 times more powerful than batteries and are capable of cycling (charging and recharging) a million times,” exclaims McGough. “They are both reliable and also operate in a wide temperature range.” 

Ioxus is owned by a group of venture-capital funds. In June 2008, the company raised $5 million in its series-A offer. The series-B offer 27 months later raised $25 million. The series-C offer, which opened in July 2013 and is still open, has raised $16 million to date. Ioxus is already considering a series-D offer. The investors include Braemar Energy Ventures; Northwater Capital Management Inc.; Aster Capital, comprised of Alstom SA, Schneider Electric SA, and Solvay SA; and Energy 

Technology Ventures, a joint venture of General Electric, ConocoPhillips, and NRG Energy, Inc. The series-C offer was led by The Westerly Group.

Growth story

The recent venture-capital investment has helped to propel the exponential growth at Ioxus. While Ioxus doesn’t release its revenue figures, Inc. magazine listed it at $5.4 million (2012 figures) with a 467 percent growth rate over the previous year. The magazine also labeled Ioxus as the 38th fastest-growing energy company. 

As of early February, Ioxus employed 140 people companywide. “We just hired another 11 employees this week,” notes McGough. “We anticipate hiring another 30 to 40 this year.” Current employment places 100 in Oneonta, 15 in Schenectady, and 25 in Japan. New hires in 2014 will support the expanded Oneonta operation.

Ioxus’s growth is also propelled by the growing demand for ultracapacitors. “In the short-term,” McGough points out, “Ioxus is focused on ‘winning’ applications. In the transportation industry, we are shipping our ‘ultracaps’ to hybrid-diesel bus manufacturers. Our iMOD modules improve the buses’ fuel economy by 55 percent. They are particularly effective in accelerating from a stop to 5 miles an hour, when the diesel is burning a lot of fuel and generating little torque. We also have a customer setting up a demonstration project for the Long Island Railroad, which serves commuters in the greater metro area.

“In the renewable-energy business, our products control blade pitch in the giant wind turbines that are dotting the land, and drive solar heliostats that are used in solar-panel systems for tracking the sun. The industrial applications for our modules include auto-guided vehicles, cranes, and lift trucks.”

While focused on current markets, Ioxus sees huge, longer-term growth, especially in the auto industry. “Hybrid cars represent a fraction of the 63 million cars built worldwide every year,” declares McGough. “In the U.S., which represents nearly a quarter of the world’s demand, the industry is driven by the new CAFÉ standards (corporate average fuel economy) established by the EPA. To meet these standards, car manufacturers need to make their vehicle fleets more efficient. Ioxus can offer hybrids, gas, and diesel cars a product that not only boosts fuel economy but also is priced economically in the $80 to $180 range.”

McGough estimates today’s world market for ultracapacitors at around $350 million, growing to $7 billion by 2020. Ioxus projects its market share to be in the 10 percent to 20 percent range by 2020. In the U.S., the company sells its products directly to its customers, in China it sells both directly and through distributors, and in Europe relies only on distributors. Ioxus’s customers are located throughout the U.S., China, Japan, and Europe.

Hiring talent

Ioxus has assembled an impressive management team. McGough has been the president since September 2010. Chad Hall, a co-founder of the company, is the vice president for marketing and product management; Ken Rudisuela is chief technology officer; Henry Barber serves as the CFO; Philip Meek is COO; Nick Cataldo is senior vice president for sales and marketing; and Hiroyoshi Okutani is general manager of the company’s Ioxus Power Systems division in Japan.

McGough is equally concerned about creating a dynamic production staff. “I interview every candidate before hiring,” stresses McGough. “I can’t afford any deadwood … Everyone has to come to work every day and do an ‘A’ job. We draw our production workers [primarily] from Delaware and Otsego counties … They need to be educated, reliable, capable of cross-training, and willing to grow [in the job]. Ioxus is building world-class products that need to be consistent. That means constant training … Since last year, we have put a priority on learning.

“To find Ph.D.s, we need to draw from a wider area. This is a research company at heart where 25 to 30 members of our staff are currently employed in research. We search out candidates in New York and Boston and overseas. We’re the most advanced R&D company in the market and it’s our cutting-edge technology that keeps us ahead of the competition.” The lobby wall at headquarters is filled with the company’s patents, attesting to the emphasis on research.

McGough formerly served as the president and CEO of Pentadyne Power Corp., Envinta Corp., and Energetics, PLC. He also was a division president at Maxwell Technologies, where he launched a new business unit focused on ultracapacitors. Maxwell is a major competitor of Ioxus. 

McGough has been instrumental in raising most of the venture capital for Ioxus, and he spearheaded the acquisition of Power Systems Co., Ltd. in Japan.

He is often asked why Ioxus chose Oneonta for its headquarters. “First, it’s inexpensive to manufacture here,” posits McGough. “Second, the workforce is dependable. There is a solid work ethic among the area residents. Third, New York state has bent over backwards to help us get started. We have received grants for our research and worker training, loans from the county, and grants from NYSEG to fit out the plant. Both U.S. Senators and our state senator were proactive in reaching out to us to see what we needed. I think we should be the poster child for ‘Start-up New York.’ And fourth, when we spun off from Custom Electronics, my goal was to build a world-class company right here in Oneonta.” Ioxus also received $1.4 million in federal funds through the office of U.S. Sen. Charles Schumer (D–NY).

McGough says his goal in the short-term is to quickly build a company with a few hundred million dollars in sales and solid margins. If his projections for a 10 percent to 20 percent share of a $7 billion market in 2020 are accurate, Ioxus could well be a $1 billion company, helping to spearhead the economic revival of the Oneonta community.

Contact Poltenson at 

npoltenson@cnybj.com

ONEONTA — At the start of 2014, Ioxus, Inc. leased an additional 24,000 square feet of manufacturing space. The high-tech company, which is nearing production capacity, expects to open a second Oneonta facility in April for electrode and module assemblies of its ultracapacitors.

Ioxus was founded in 2007 and in headquartered in Oneonta in the former National Soccer Hall of Fame. Its two plants in Oneonta (40,000 and 24,000 square feet, respectively) are complemented by a research and development lab near Schenectady and another manufacturing plant in Japan (30,000 square feet), acquired in 2012 for its expertise in producing lightweight, high-power, and high-energy density cells using a prismatic pouch design. 

“Ioxus is the only fully integrated ultracapacitor design and manufacturing facility in North America,” says Mark E. McGough, the company’s president and CEO. “We produce a family of energy-storage products for transportation, renewable-energy, and industrial applications. Our proprietary ultracapacitors provide modules in a wide voltage range and in different configurations.”

Capacitors are electric-circuit elements designed to store an electric charge temporarily and have been used for more than 100 years to augment batteries by quickly absorbing and discharging energy. “Ultracapacitors are now 1,000 times more powerful than batteries and are capable of cycling (charging and recharging) a million times,” exclaims McGough. “They are both reliable and also operate in a wide temperature range.” 

Ioxus is owned by a group of venture-capital funds. In June 2008, the company raised $5 million in its series-A offer. The series-B offer 27 months later raised $25 million. The series-C offer, which opened in July 2013 and is still open, has raised $16 million to date. Ioxus is already considering a series-D offer. The investors include Braemar Energy Ventures; Northwater Capital Management Inc.; Aster Capital, comprised of Alstom SA, Schneider Electric SA, and Solvay SA; and Energy 

Technology Ventures, a joint venture of General Electric, ConocoPhillips, and NRG Energy, Inc. The series-C offer was led by The Westerly Group.

Growth story

The recent venture-capital investment has helped to propel the exponential growth at Ioxus. While Ioxus doesn’t release its revenue figures, Inc. magazine listed it at $5.4 million (2012 figures) with a 467 percent growth rate over the previous year. The magazine also labeled Ioxus as the 38th fastest-growing energy company. 

As of early February, Ioxus employed 140 people companywide. “We just hired another 11 employees this week,” notes McGough. “We anticipate hiring another 30 to 40 this year.” Current employment places 100 in Oneonta, 15 in Schenectady, and 25 in Japan. New hires in 2014 will support the expanded Oneonta operation.

Ioxus’s growth is also propelled by the growing demand for ultracapacitors. “In the short-term,” McGough points out, “Ioxus is focused on ‘winning’ applications. In the transportation industry, we are shipping our ‘ultracaps’ to hybrid-diesel bus manufacturers. Our iMOD modules improve the buses’ fuel economy by 55 percent. They are particularly effective in accelerating from a stop to 5 miles an hour, when the diesel is burning a lot of fuel and generating little torque. We also have a customer setting up a demonstration project for the Long Island Railroad, which serves commuters in the greater metro area.

“In the renewable-energy business, our products control blade pitch in the giant wind turbines that are dotting the land, and drive solar heliostats that are used in solar-panel systems for tracking the sun. The industrial applications for our modules include auto-guided vehicles, cranes, and lift trucks.”

While focused on current markets, Ioxus sees huge, longer-term growth, especially in the auto industry. “Hybrid cars represent a fraction of the 63 million cars built worldwide every year,” declares McGough. “In the U.S., which represents nearly a quarter of the world’s demand, the industry is driven by the new CAFÉ standards (corporate average fuel economy) established by the EPA. To meet these standards, car manufacturers need to make their vehicle fleets more efficient. Ioxus can offer hybrids, gas, and diesel cars a product that not only boosts fuel economy but also is priced economically in the $80 to $180 range.”

McGough estimates today’s world market for ultracapacitors at around $350 million, growing to $7 billion by 2020. Ioxus projects its market share to be in the 10 percent to 20 percent range by 2020. In the U.S., the company sells its products directly to its customers, in China it sells both directly and through distributors, and in Europe relies only on distributors. Ioxus’s customers are located throughout the U.S., China, Japan, and Europe.

Hiring talent

Ioxus has assembled an impressive management team. McGough has been the president since September 2010. Chad Hall, a co-founder of the company, is the vice president for marketing and product management; Ken Rudisuela is chief technology officer; Henry Barber serves as the CFO; Philip Meek is COO; Nick Cataldo is senior vice president for sales and marketing; and Hiroyoshi Okutani is general manager of the company’s Ioxus Power Systems division in Japan.

McGough is equally concerned about creating a dynamic production staff. “I interview every candidate before hiring,” stresses McGough. “I can’t afford any deadwood … Everyone has to come to work every day and do an ‘A’ job. We draw our production workers [primarily] from Delaware and Otsego counties … They need to be educated, reliable, capable of cross-training, and willing to grow [in the job]. Ioxus is building world-class products that need to be consistent. That means constant training … Since last year, we have put a priority on learning.

“To find Ph.D.s, we need to draw from a wider area. This is a research company at heart where 25 to 30 members of our staff are currently employed in research. We search out candidates in New York and Boston and overseas. We’re the most advanced R&D company in the market and it’s our cutting-edge technology that keeps us ahead of the competition.” The lobby wall at headquarters is filled with the company’s patents, attesting to the emphasis on research.

McGough formerly served as the president and CEO of Pentadyne Power Corp., Envinta Corp., and Energetics, PLC. He also was a division president at Maxwell Technologies, where he launched a new business unit focused on ultracapacitors. Maxwell is a major competitor of Ioxus. 

McGough has been instrumental in raising most of the venture capital for Ioxus, and he spearheaded the acquisition of Power Systems Co., Ltd. in Japan.

He is often asked why Ioxus chose Oneonta for its headquarters. “First, it’s inexpensive to manufacture here,” posits McGough. “Second, the workforce is dependable. There is a solid work ethic among the area residents. Third, New York state has bent over backwards to help us get started. We have received grants for our research and worker training, loans from the county, and grants from NYSEG to fit out the plant. Both U.S. Senators and our state senator were proactive in reaching out to us to see what we needed. I think we should be the poster child for ‘Start-up New York.’ And fourth, when we spun off from Custom Electronics, my goal was to build a world-class company right here in Oneonta.” Ioxus also received $1.4 million in federal funds through the office of U.S. Sen. Charles Schumer (D–NY).

McGough says his goal in the short-term is to quickly build a company with a few hundred million dollars in sales and solid margins. If his projections for a 10 percent to 20 percent share of a $7 billion market in 2020 are accurate, Ioxus could well be a $1 billion company, helping to spearhead the economic revival of the Oneonta community.

Contact Poltenson at 

npoltenson@cnybj.com