The Iowa Economic Development Authority awards funding to startups in the form of low-interest loans through its Innovation Continuum, which includes five funds that are designed to offer companies non-dilutive funding at every stage of business growth. The funds are: Proof of Commercial Relevance (POCR), Demonstration Fund and the Innovation Acceleration Fund, which offers Launch, Propel and Innovation Expansion awards.
These financing options are geared toward companies operating in the fields of advanced manufacturing, biosciences or information technology. Each fund in the continuum also requires the company to supply matching funds, which could come from family and friends funding, outside investors or federal funding programs like the Small Business Innovation Research program.
Starting this year, IEDA has provided additional funding through the U.S. Treasury’s State Small Business Credit Initiative (SSBCI). Iowa received $96 million from SSBCI, and $22 million was allocated to increasing the amount of funding available through each of IEDA’s innovation funds. For example, before the SSBCI funding, companies could receive a POCR loan of up to $25,000; now POCR loans of up to $50,000 are available.
After the application process, which includes an interview with a panel of experts in the industry the company operates in, companies present to the IEDA Technology Commercialization Committee (TCC). The TCC then makes recommendations to the IEDA board for final approval of awards.
The SSBCI Review Committee also reviews and scores applications and makes recommendations to the executive director of IEDA for final approval of awards that are funded through the SSBCI allocation. Both committees meet every two months.
Below are the startups and organizations that received funding through IEDA programs in the fourth quarter of 2023.
IEDA Innovation Fund
FES Solutions – Cedar Rapids: $50,000 Proof of Commercial Relevance loan. FES Solutions developed a market-ready fire extinguisher stand for construction companies. The company identified the need for a consistent product that was typically made with leftover project materials. The prototype has the potential to offer a more durable and lighter weight solution.
Ten5 Inc. – Des Moines: $50,000 Proof of Commercial Relevance loan. The startup created a communications platform for the trucking industry to improve driver safety and fleet productivity and lower driver and dispatcher turnover rates. The platform uses a driver voice application that allows the driver to communicate hands-free using voice input only.
State Small Business Credit Initiative
Hummingbirds – Des Moines: $250,000 Innovation Acceleration Launch Fund loan. Hummingbirds is an SaaS-enabled marketplace that helps brands find and work with local people to drive awareness and sales. Customers can create a campaign inside the software, and local content creators (called “hummingbirds”) express interest in the campaign. Customers select interested hummingbirds and provide a complimentary perk to experience their brand and share about it on social media.
High Quality Jobs Program and Targeted Jobs Withholding Tax Credit
Independence Foods – Independence: $1.5 million in direct financial assistance through IEDA’s High Quality Jobs program (HQJ). Independence Foods, which will manufacture a wide range of food products, plans to purchase an existing pet food facility in Independence and make upgrades to accommodate production capabilities and requirements. The project represents a capital investment of $14.8 million and is expected to create 229 jobs incented at a qualifying wage of $25.90 per hour.
Alpla Inc. – Austria/Iowa City: Alpla Inc., an Austrian manufacturer of plastic packaging systems and bottles, received tax benefits under the HQJ program to build a learning and development facility adjacent to its existing Iowa City plant to support a new apprenticeship program. The project represents a capital investment of nearly $13 million and is expected to create 36 jobs, of which six are incented at a qualifying wage of $30.65 per hour.
Kooima Ag Inc. – Rock Valley: Kooima Ag Inc., an independent manufacturer of replacement parts for ag equipment machinery manufacturers, received tax benefits through the HQJ program to expand its Rock Valley facility to accommodate growth, including both warehouse and production space. The project represents a $4.5 million capital investment and is expected to create 12 jobs, of which 11 are incented at a qualifying wage of $24.77 per hour.
Acadia Healthcare Company Inc. – Council Bluffs: Received tax benefits through the Targeted Jobs Withholding Tax Credit program to support construction of a new 71,000-square-foot facility to provide resident care, specialized care and outpatient programming. The behavioral health service provider has locations in 39 states and more than 250 treatment facilities. The project represents a $64.5 million capital investment and is expected to create 144 jobs, of which 54 are incented at a qualifying wage of $26.35 per hour.
Combined, these four companies are expected to create 421 jobs and represent a $96.8 million capital investment.
Past coverage: Funding recap: IEDA awards $2.7M to 10 Iowa startups in Q3
Funding recap: IEDA awards $4.3M to startups, service providers in Q2