About two years ago, a tiny Finnish startup landed in Akron, hoping to tap the U.S. market.
Now, the wireless technology venture 7signal has eight employees, a growing customer base and recently received money from the new Akron BioInvestment Funds, designed to boost the city’s tech industry.
“The investment from the BioInvestment Funds was crucial for growth,” encouraging others to invest in the company, said Jeff Reedy, CEO of 7signal Solutions Inc. “It provided an indication that this city was behind the company.”
Reedy noted that the startup, which specializes in wireless technology for the health-care industry and higher education, has raised $2 million in its first round of investment funding, including money from the BioInvestment Funds.
BioInvestment Funds LLC, developed by the city of Akron, is celebrating its first year of operation and its first investments in early stage companies.
City officials launched the effort to route investors to fledgling businesses, with an eye, in particular, on Akron’s emerging biomedical corridor.
So far, BioInvestment Funds has awarded about $600,000 in financial backing to 7signal and four other companies.
The five startups were among 28 ventures that applied for money — awarded in the form of equity stakes and grants in the companies.
Zev Gurion, a business development consultant who works with BioInvestment Funds and the city, declined to disclose how much each company received.
While BioInvestment Funds is a city initiative, there’s no city cash in the organization. BioInvestment Funds is the for-profit arm of the city’s Akron Development Corp. Investors include companies, such as Akron’s FirstEnergy Corp., and nongovernmental institutions.
The startups receiving money must commit to maintaining operations in Akron or move them to the city.
Reedy, with 7signal, declined to say how much investment funding he received from BioInvestment Funds. He said the majority of the $2 million raised was from other investors in Ohio and Finland.
Nevertheless, he said the BioInvestment Funds money helped persuade him to join the company in mid-January. He previously headed Overture Networks, a networking company headquartered in North Carolina.
“I was recruited here,” the 55-year-old Reedy said, “and I was excited about the market and the team.”
At the same time, he said, “You’re always looking at who the investors in a company are. You want to make sure there is more than one and the investment is enough to build the company.”
7signal’s software makes wireless communications connect easily and operate more reliably inside buildings such as hospitals. The technology works with existing wireless networks, meaning that customers do not have to replace their current hardware.
Local customers include Akron General Medical Center and Akron Children’s Hospital.
7signal was founded in 2006 by Veli-Pekka Ketonen, a former engineer at the Finland-based mobile telephone giant Nokia. He is now 7signal’s chief technology officer.
In 2011, the company moved to Akron, setting up shop in the city’s business incubator, called the Akron Global Business Accelerator, in the former B.F. Goodrich complex on South Main Street.
Ketonen, wanting to establish U.S. operations, decided on Akron after learning about the area through what the city calls its BioFinland Technology Bridge Initiative.
Gurion, who is executive director of the nonprofit Akron Biomedical Corridor, said that in addition to helping startups already in Akron, BioInvestment Funds can be a valuable tool in attracting companies.
He said that medical technology company OrthoData Inc., one of the five companies receiving money, last month moved from Kentucky. Akron BioInvestment Funds helped the company pull together $1.1 million in additional backing from private investors.
Katie Byard can be reached at 330-996-3781 or email@example.com.