Ames Seed Cap Invests in Pyrone Systems, Inc.
On November 9th, 2022, the Ames Seed Capital Board of Managers approved a $100,000 investment for a new business named Pyrone Systems, Inc, which is developing a bio-pesticide that uses pogostone as the key ingredient.
Mosquitoes, ticks, and other insects have become resistant to pesticides and insecticides currently on the shelves. Pyrone Systems is positioned to offer a unique solution to this problem by developing a new way to produce pogostone, which is a naturally occurring molecule produced by the patchouli plant.
For centuries, the patchouli plant leaves have been known to have a repellent property and were commonly used when shipping textiles from Southeast Asia to Europe. The patchouli plant, however, produces pogostone in such low quantities that an area eight times the size of Texas would be required to produce the amount of insecticides used in the U.S.
Pyrone Systems has solved this problem through the development of Pyrone-1, which they make using genetically modified yeast. They take the yeast and mix it with the byproducts from making vegetable oil. The initial lab results have shown an increase in Pyrone-1 production, which is exciting for Pyrone Systems as they approach commercialization. Preliminary data suggests that pogostone is non-toxic to humans, birds, bees, and the environment.
Pyrone Systems was founded in October 2021. Dr. Brent Shanks, a co-founder of Pyrone Systems, currently serves as Chief Technical Officer. He is also a Distinguished Professor and the Director of the Iowa State University Center for Biorenewable Chemicals (CBiRC) at Iowa State University. He sees the potential of Pyrone-1 going beyond insect control.
“What takes Pyrone-1 to the next level is our proprietary chemistry and know-how that was originally developed in CBiRC,” said Shanks. He noted that their technology has unlocked potential in seven new markets, including a $7 billion corrosion inhibitor market that is facing regulatory pressure and the $120 billion lubricant market that wants to decarbonize. “We’re moving fast as the Pyrone Systems team has extensive expertise in developing biology and chemistry, scaling up operations, navigating regulatory requirements and creating key sales and marketing collaborations.”
The rest of the Pyrone Systems leadership team includes Chief Executive Officer, Dr. Alex Hutagalung, Chief Business Officer, Steve Bessette, and Chief Financial Officer, Brian Conn. The company is planning to first produce pesticides for commercial and residential uses, and then believes it can produce, cost efficiently, enough to serve agricultural markets.
Mike Upah, Director of Ames Seed Capital (ASC) for the Ames Chamber of Commerce, said that the ASC executive committee saw the potential in what Pyrone Systems was doing. “When positive referrals come from multiple, respected sources, it accelerates interest and helps prioritize one project over others.” He noted that it is a great time to invest in bio-based products and that the company founders have an understanding of the industry with a sound commercialization strategy.
Ames Seed Capital
Founded in 1987, Ames Seed Capital is a venture fund based in Ames, Iowa, and operated by the Ames Chamber of Commerce and Economic Development Commission. The firm invests a pool of funds committed by private sources (entities and individuals) for the purpose of providing equity-based financing for business start-ups and/or expansions. These investments primarily focus on companies in the biotechnology, software, energy, and financial service sectors located in Central Iowa, but they are not limited to these parameters.
The Fund is an Iowa company created to implement a program of the Ames Economic Development Commission (AEDC) and initially established by the AEDC to fund start-up companies developed at Iowa State University with commercial potential. Ames Seed Capital is managed by an elected volunteer Board of Managers.
To date, Ames Seed Capital has raised 7 funds with the first taking place in 1997 with $451,000. Fund 3 was $449,5000 and had 55 investors who invested in five companies. This created a high rate of return and each investor received nearly $5 back for every one dollar invested.
Fund 4 invested in 13 companies, Fund 6 totaled $1.7 million and included 63 investors, and Fund 7 saw the firms largest investment total of $4.25 million with 101 investors.
Currently, the fund has invested a total of $4.9 million in 29 businesses and has an additional $3.4 million in Fund 7 to invest. The current portfolio includes 14 companies.
Here are a few notable investments from Ames Seed Capital:
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