While VisionTech Angels invests in companies from across the United States, we have a sweet spot for Indiana startups. So I was excited when Shane Bivens and Stuart Lowry of ArcticRx reached out to me about pitching to our investors. They had just won the 2023 Innovative Small Business of the Year Award from the Indiana Small Business Development Center and Indiana Economic Development Corporation (IEDC) for their ultra-low temperature transport technology. That definitely got my attention. When they shared details on market trends and unmet needs along with ArcticRx’s product-market fit and traction to date, I invited Shane and Stuart to meet with our Screening Committee. The group was impressed and invited them to present at our June 22nd pitch events. Here’s a preview.
BP: How did you find out about VisionTech Angels?
SB: When we started fundraising, we talked to a lot of people and your name kept coming up. “Talk to Ben” is something we heard a lot. When the stars aligned, we reached out to you and VisionTech Angels.
BP: Tell me a little about yourselves and your background as entrepreneurs/startups.
SB: I got my start in college when someone said, “You look like a guy who could build a website.” So I did. Since then, I’ve been involved in a number of startups and helped organizations scale.
SL: I am a not-for-profit Thoroughbred. I’ve spent nearly all of my career working with non-profits and government agencies, including IEDC, Heartland Film and the Indianapolis Parks Department. I met Shane while working on a food equity concept and we just clicked. I’m a left brain-right brain kind of person and co-founding a disruptive startup like ArcticRx that can do so much good in the world made sense for me.
BP: What’s the backstory on ArcticRx? You launched in 2020 while we were in the throes of the pandemic. Are the two related?
SB: Stuart and I were originally focused on another startup product called ChefsFridge we launched in 2019. We were working on our technology, had investors and then COVID hit. There was an immediate need in the pharmaceutical industry for thermal shippers that could keep coronavirus vaccines at a very specific cold temperature from the date shipped until they reached the final destination. So we pivoted to what is now ArcticRx. There was such an urgency for a solution due to the lack of good cold chain shipping options within the United States and across the world. This urgency caused companies to be more open to change, thus we found the perfect moment to bring ArcticRx to market.
SL: You probably saw the headlines where hospital freezers were breaking, and they were scrambling to give the vaccines before they spoiled. In all of this insanity, Shane and I saw an opportunity to pivot to a new shipping container that could be used as both a shipping and storage container for highly temperature sensitive pharmaceuticals. It would help pharmaceutical companies and governments solve huge, costly issues domestically and create new health equity opportunities in other countries across the global, with a special focus on Africa.
BP: You’ve created what you call “The World’s first Engineered Reusable Non-electrified 21-day ULT Transport and Storage Pod.” Explain.
SB: First, I’d like to mention the annual growth rate of cold-chain dependent pharmaceuticals is twice that of shelf-stable medications. So it’s a significant market opportunity. But the other side of the equation is current options don’t cut it in terms of performance, energy use and sustainability.
Our shippers are rugged and capable of protecting temperature-sensitive products for more than 21 days of shipping and storage without a battery or other external energy source. They are made with a durable plastic shell, are Styrofoam free, reusable, stackable for ease of shipping, and lightweight. They can be moved by hand if needed. And we’ve created our technology by tapping into the wealth of expertise found right here in Indiana such as thermal engineering, aerospace and the defense industry, and smart manufacturing.
BP: What role does sustainability play?
SL: This is definitely a key driver of our strategy. People hate Styrofoam because it’s not recyclable and yet it’s used everywhere to ship products requiring refrigeration. Based on our meta-analysis, a massive number of current thermal shippers will be regulated out of the market in the next five years because of Styrofoam and other sustainability goals.
SB: Sustainability is integral to ArcticRx. Many cold chain shipping containers are single-use disposables with a large carbon footprint. There’s a lot of waste and expense in shipping containers and frankly people are tired of it. Our products are specifically designed for reusability and for multi-year use. Ideally, they’d be used for two-way shipping. We envision they will be sent to one destination with one product and returned with another. Another plus is our containers do not require a battery or other energy source nor do they need to be transported in refrigerated trucks, saving fuel and lowering carbon footprints.
BP: How is your solution different from others on the market?
SB: We like to say our shippers are not an evolution of current technology, but a revolution because we are redefining the category. They’re sustainable, reusable, more affordable than current options, and lastly, stay fully refrigerated for 21 days without a power source.
SL: There is nothing else like it on the market in the passive transport space.
BP: Is it transferable to other industries besides pharmaceuticals?
SB: We’re focused on pharmaceuticals which require cold storage now, but definitely the technology can be leveraged across health care for transporting a wide range of products such as blood bags or organs for transplant. ArcticRx will be ideal for relief efforts, war fighter support, medical supplies, and perishable foods.
BP: What kind of intellectual property protection do you have?
SL:We have a patent attorney and have completed our freedom to operate analysis and have the green light to apply for patents. Our patent searches showed that we’re free and clear. In fact, our attorney says we’re in rare air as we don’t have any redesign or rework changes.
BP: Where are you in terms of commercialization?
SB: We have been very mindful in our development as a company. Since October 2020, we’ve had three distinct phases: engineering, prototyping and contract manufacturer identification, and now sales and marketing. All of our prototypes have been built, tested, and proven so now we’re in the market and having client discovery conversations. We have a number of proposals with defense contacts, global companies and contacts in key African countries. We’ll get into more specifics during our pitch.
SL: It’s a really exciting time! When we get on calls with people—and that includes Indiana companies, other U.S. companies, hospitals, global departments of defense, UNICEF, and many foreign entities—there’s a lot of excitement about what we’re doing. The lead procurement director at UNICEF and others in our conversations have said, “Wow! You’re going to change the world.” They see the possibilities.
BP: What is your revenue model?
SB: Our plan is to do long-term leasing to logistics companies with terms of one, three and five years. It’s a common approach in logistics where companies maintain “pools” of reusable packaging that are then leased to companies shipping various products. We will also work with companies on custom applications where we are the “white glove service” for their product packaging and delivery.
BP: What round is this?
SB: This is our seed round and our goal is to raise at least $800,000.
BP: What is your planned use of funds?
SL: It’s pretty straight forward. We want to quicken our speed to market and that means hiring key people, field testing with potential customers who are anxious to get started, and finally having the capital for manufacturing and warehousing expenses. Right now it’s only Shane and I—which has been great by the way—but we’re at the point where it’s time to move faster and prepare to scale. We’re excited about the field trials and seeing how our products perform with the customers’ products and in their supply chains.
BP: Give me three reasons why VisionTech Angels members should invest.
SL: First, we’ve taken the best of Indiana—its manufacturing resources, tech talent, and pharmaceutical companies that will benefit from our products—and created a company that’s ready to take off in a high-end market. We have multiple runways for diversification. Second, we’re a very collaborative company. We always give before we get. Third, we have strong connections within global defense departments and have done technology demonstrations with several military branches that can benefit from our technology. Our first hires will be military veterans. We’re one of the only companies in the state that is part of the U.S. Department of Defense SkillBridge Program that incentivizes veteran hires.
SB: I’ve got another reason.
SB: We have Indiana’s superpower in spades. We get things done!
BP: Thanks guys! Looking forward to your pitch on June 22.
VisionTech Angels’ Pitch Events will be virtual on Thursday, June 22 at Noon and live at 6 p.m. ET at KSM at 800 E 96th St #500, Indianapolis. Pitch events are open to our members and accredited investors interested in joining our group. To register, check your email for an invitation, go to our Events page where you’ll find the RSVP links, or email Ben Pidgeon at firstname.lastname@example.org.