By Jon Zemke, Southeast Michigan Startup, December 22, 2015
Coherix is a startup that has gone from darling to dog and back to darling again in the eyes of investors.
The Ann Arbor-based firm makes software that helps streamline the advanced manufacturing process. Its principal technology provides high-speed, high-definition 3D measurement and inspection services for manufacturers that increases productivity. It creates efficiencies through high-tech, optical-based measurement and inspection of the assembly processes.
Coherix launched in 2004 with ambitions of going for an initial public offering (IPO) before the end of the decade. It had the proof of product and investors behind it, and the bottom fell out of the U.S. economy in 2008 and landed squarely on Michigan’s economy like a ton of bricks.
“The rest of the world went through a major recession,” says Carlson. “Southeast Michigan went through a depression, a severe depression.”
At that point Coherix went from promising tech startup working to scale its growth to company in survival mode. Coherix burned through $9.6 million between 2008 and 2010 to keep the lights on. Its handful of employees took big pay cuts to make the numbers work enough so they could keep their jobs.
“If you made 50 percent of your salary at Coherix in that time you were high paid,” Carlson says. “A lot of us were making nothing.”
It turned out to be enough to survive. Coherix came out of the Great Recession stronger than before. Carlson expected investors to come flocking to sink money into a company that survived the worst economic downturn since the Great Depression. It didn’t happen that way. Most people turned away when they heard the words manufacturing, Michigan, and Detroit Three in Carlson’s elevator pitch.
“They ran away so fast like they thought you had the plague,” Carlson says.
So Coherix kept pushing on. Its lack of luck in North America prompted it to look abroad. Carlson found a receptive investment audience in Asia, specifically China where 40 percent of the country’s gross domestic product originates from manufacturing. It found more and more work there and started growing in earnest. That work led to a $12 million investment earlier this year from Chinese investors.
One third of that money will go toward building out Coherix’s operations in China. The rest of it will be spent building the business in Ann Arbor.
“In the mean time we’re going to do a lot of work with local manufacturers,” Carlson says. “They will get the first look at it.”
It currently employs 50 people, most of whom are employed in Ann Arbor. It is currently hiring people in Ann Arbor, China and Europe.
“Now we are back on track into growing and hiring people and do everything we wanted to do 6-7 years ago,” Carlson says.
Taking Coherix public in a few years is back on the table again. Carlson is optimistic about not only his company’s chances at growth but the overall region’s chances after it survived the Great Recession, mainly because neither wasted a crisis.
“Don’t waste a crisis,” Carlson says. “Fortunately we had a big one. Now a lot of people are excited to be entrepreneurs and investors and everything we should have been 30-40 years ago.”