Alan Kim | The Roanoke Times
Virginia Tech graduate student and intern Ken Stratton works last summer at Synchrony Inc., an engineering firm based in Roanoke County. The company is going to move into a 58,000-square-foot facility in Valleu Tech Park.
Roanoke County's Synchrony Inc. sure is growing up.
Almost three months after the 14-year-old technology company feted plans to move into a new, 58,000-square-foot facility in Valley Tech Park, President and CEO Victor Iannello announced Thursday that the company has secured $10 million in Series B financing from two locally managed funds.
Synchrony develops and produces magnetic bearings, controls and power systems for high-speed rotating machinery for use in such things as aircraft power systems, rocket engines, oil extraction and U.S. Navy river patrol craft.
Iannello, who initially funded the company with his family's savings, said the eight-figure investment will help the company do several things.
Victor Iannello
"First of all, it allows us to continue to improve the production infrastructure that we have, to be able to deliver the products to our customers with the quality and delivery times that they're going to need," Iannello said. "But perhaps, more importantly, we can now begin to talk about supplying these systems on a global basis."
Synchrony board member Matt Crisp said the majority of the announced funding comes from New River Management V, a $250 million private investment fund managed by Radford-based Third Security. Crisp is vice president of Third Security.
The rest of the funding -- which Iannello estimated at about $1.2 million -- comes from NewVa Capital Partners, a private equity/venture capital fund created in 2004 by Carilion Clinic, the Virginia Tech Foundation and Third Security as a way to support entrepreneurs who are either already operating in Southwest Virginia or willing to relocate to the region.
It is the second round of investment Synchrony has received from the groups.
In February 2006, the company received $5 million from NewVa and a Third Security fund -- money Iannello said then would help his company move from being primarily focused on research and development to taking its products to market.
"Our simple credo is that if you like something, you should want more of it, and we like this company," Randal Kirk, chairman and CEO of Third Security, said in an announcement. "Since our initial investment, we've carefully analyzed the global market for Synchrony's products, closely monitored the company's operations including the recent expansion of production capacity and tracked its steady progress through such innovations as Fusion," a bearing product.
Crisp said the investment is an equity investment but declined to disclose how much ownership Third Security now has in the company.
Following its 2006 investment, two Third Security employees joined Synchrony's board of directors. Crisp said the investment firm would maintain that level of representation on the board.
Now that a new round of financing is in place, Crisp said he expects Synchrony to ramp up in scale.
In particular, Iannello said he plans to build up inventories of a high-speed integrated drive train and the Fusion bearing, a product he called "the only active magnetic bearing that doesn't require any external electronics," as well as develop global sales through partnerships with other companies.
On the home front, Iannello said Synchrony will more than double the number of its employees from its current 28.
Synchrony isn't the only company in the region to benefit from New River Management V, Third Security's sixth and largest investment fund.
Intrexon, a private life sciences company in the Virginia Tech Corporate Research Center in Blacksburg, received $25 million in Series C financing from the fund in May.
Courtesy of The Roanoke Times