With financial backing, Fluence Analytics ready to grow

HOUSTON—Polymer manufacturing solutions provider Fluence Analytics has completed a $7.5 million venture funding round with multiple global partners. The capital raised will support continued growth and research and development efforts in the years ahead.

Fluence Analytics, a Houston-based startup formed in 2013, operates in continuous polymer reaction monitoring, offering a system that continuously monitors and measures polymerization reactions in real time.

Its most recent round of venture funding included a new business collaboration agreement with Japanese-based electrical engineering and software company Yokogawa Electric Corp. In addition to signing the collaboration agreement, Yokogawa Electric also participated in the $7.5 million financing with other investors, including Energy Innovation Capital, JSR Corp. and Diamond Edge Ventures, which is a division of Mitsubishi Chemical Holdings Corp.

EIC is a traditional venture investor while Fluence Analytics has past relationships with Diamond Edge and JSR, both past customers. All three companies are providing financial investments only as part of the capital round.

Yokogawa Electric and Fluence Analytics said that, under the collaboration agreement, they will work together to expand and accelerate the deployment of ACOMP systems to customers worldwide. Yokogawa Electric will be Fluence Analytics' exclusive distributor of ACOMP systems in Asia, the Middle East and North Africa. It will provide field engineering, sales and system integration with customers.

"We were looking for a strategic partnership that went beyond capital only, and that's what we found with (Yokogawa Capital)," Fluence Analytics CEO Alex Reed said. "They have a strong sales and service organization and can help us deploy (solutions) to customers faster."

Kenji Hasegawa, a Yokogawa Electric vice president and head of the Yokogawa Products headquarters, said in a statement that his company's expertise will enable the reduction of cycle time, eliminate the production of off-spec products, and produce an estimated $1.5 million in cost savings per year based on average reactor size for Fluence Analytics as part of the agreement.

Fluence Analytics also can benefit from its new partner's emphasis on technology and data analytics, as well as its distribution arm. Given that Yokogawa Electric has more than 16,000 employees globally—Fluence has 20—it is a promising union for Reed's team.

Fluence Analytics has a small team of employees located in New Orleans, all of whom are safely working in other locations in the aftermath of Hurricane Ida. A handful of other employees work remotely, a practice Reed said the company is comfortable promoting for qualified new talent.

Reed also noted that Fluence Analytics saw "high double-digit growth" in 2020 even with the pandemic.

"We pride ourselves on being able to provide optimized efficiencies and production for our clients," Reed said. "In certain regions of the world they have a large footprint in chemicals ... (and) that is a strategic fit for us as well."

Both companies also share an interest in efficiency, sustainability and striving to help clients do more with less. One example is to enhance the ability of clients to rerun feedstock back through the existing plant, Reed said.

The latest round of financing has come since the pandemic started, and it took less than 12 months to finalize, according to Reed, who noted that all discussions were handled remotely.

"It was an interesting process and much (smoother) than I would have thought going in," he added.

Fluence Analytics will use the funds from the new financing to accelerate the design and production of its next-generation, industrial ACOMP, increasing its ability to reduce cycle times and eliminate the production of off-spec products. It also will invest in other product enhancements that leadership hopes will give the company a competitive advantage, such as industrialization for hazardous locations, expanding the smart manufacturing system's output of measurements, adding more analysis algorithms and enhancing its data mining correlation framework.

"In the short term, it will provide us with new resources to scale and support existing clients," Reed said.

The company also will scale up production efforts, invest in sales and marketing and increase personnel. Reed anticipates he may double the size of his work force in the next two to three years with a need for field engineers, instrumentation experts, software automation professionals and a range of other positions.

Most competitors of Fluence Analytics are larger companies, and the funding round and partnership with Yokogawa Capital also will help the company maintain the technology it needs to remain cost and operationally competitive, Reed said. Among its goals is to offer more real-time measurement and process control capabilities.

"Even two years ago, there were a number of buzz words being used throughout the industry, but now customers want those high-tech features," Reed said, mentioning data sets and elastomer apps as two examples. New data sets can help build correlations to plant data, allowing companies to launch new materials more effectively.

"The pandemic has accelerated this emphasis on technology," Reed said.