First Resonance initially targeted aerospace companies, but has since expanded to other industries, including automotive and robotics. CEO Karan Talati said the company eventually plans to help build air taxis.
"We're bringing on companies even right now that start to get into the kind of blurry lines of what the future of mobility looks like," Talati said.
A screenshot of First Resonance's inventory management software.
The new round of funding will allow the company to double — "if not triple" — its headcount by the end of this quarter and develop its main product, the Ion factory management software, which allows manufacturers to automate and streamline operations.
The funding round was led by Blue Bear Capital, a Beverly Hills-based venture capital firm that looks to invest in automation, artificial intelligence and the industrialization of renewable energy.
First Resonance has now raised a total of $5.3 million since its 2018 launch.
The startup began working remotely last March. Its six-person team is made up of engineers that come from top manufacturers in town including SpaceX, Toyota and NASA.
Blue Bear Capital partners Ernst Sack and Vaughn Blake decided to invest in First Resonance because they saw the long-tail potential for First Resonance's software as the market for electric cars soar and the space market expands.
First Resonance CEO Karan Talati
Manufacturing in both of those areas requires a complex set of processes.
"At the global level, the revolution of next-gen manufacturing is critical to solving the climate and mobility challenges that we'll be facing in the years ahead," Blake said. "First Resonance' software ignites that revolution by enabling the manufacturing workflows required to electrify transport, reach orbit and propel satellites."
The software lets factories automate their manufacturing and manage their supply chains, freeing up more time for engineers to focus on futuristic designs, Talati said. It also uses data visualization and analytics to help builders troubleshoot design issues.
First Resonance is already backed by notable firms including Santa Monica-based Wavemaker Partners and Westwood-based Fika Ventures, but Blue Bear has a foothold in Texas, where aerospace activity and manufacturing are exploding, giving it an edge over other firms. Elon Musk has reportedly moved to Austin, and some of SpaceX's manufacturing has migrated to Boca Chica Village in Texas.
"It's been really great [to access] new customer acquisition or networks, with their extended team in San Francisco as well as Texas," Talati said, noting at First Resonance has plans to expand far beyond Los Angeles' borders.
On Friday, five years after launching, the manufacturing business debuted a clothing line with local designer Come Back As A Flower partly made with their recycled polyester. Their model is Aleali May, the first female to design a unisex sneaker for Air Jordan.
"We started with this idea of 'can you take an old t-shirt and use those materials to just make a new t-shirt, instead of using materials from the earth like cotton or polyester'," he said.
Clothing retailers from Zara to H&M have slowly been trying to reduce their massive waste as pressure mounts from consumers, policymakers and activists.
Cheap, fast fashion has fueled Americans consumption of clothes. A sizable amount of that ends up in landfills — about 11.3 million tons of textiles in 2018, according to the most recent figures from the Environmental Protection Agency.
Sethi said he is working with several large clothing retailers that are trying to figure out how to cut waste.
"I haven't found a single place that says, 'oh, we're not interested in moving to a more sustainable fashion industry'," he said.
Ambercycle was founded with government grants from the National Science Foundation and the Department of Defense, which lists environmental sustainability as a national security threat. A few angel investors and funds, including Y Combinator, the Lemelson Foundation and H&M Foundation, also backed ambercycle's initial $4 million round.
It's attracted the interest of Swedish clothing giant H&M, an investor that's also looking to utilize ambercycle's technology in future collections.
Sethi and his co-founder Moby Ahmed began working on the idea as undergraduate students at UC Davis. Back then, the pair planned on selling their technology to big chemical companies. But they noticed that recycling and garbage processes in the textile and fashion industries were lagging behind. So they started a business instead.
But it's not easy. Their patented technology breaks down the molecules of textile waste to generate small polyester pellets. First, reactors built in their factory downtown separate the fibers of each item while removing dyes and stains. Those pellets are then spun into polyester yarn used to make new clothes.
Ambercycle's patented technology breaks down the molecules of textile waste to generate small polyester pellets.
The startup's factory downtown can process about 50 garments a day, mostly old shirts and textile waste or excess from big name businesses. It's hardly enough to make garments in mass. Even ambercycle's own clothes are 90% virgin polyester. To make 100% recycled polyester, Sethi would need a new factory.
Sethi has plans to build a large commercial plant that can eventually manufacture 50,000 tons of material each year, the amount large garment factors typically produce. If he succeeds, it would be a rarity. Few clothing companies produce and source in the U.S.. Most instead rely on cheap overseas labor and material.
But the fundraising for that factory doesn't appeal to venture capital or other traditional sources, he said.
"The idea of building a plant is seen as unsexy," he said. "We haven't gotten too much interest from the traditional technology investor. This is not in vogue yet."
So, Sethi is looking elsewhere for funding as consumer interest in sustainable fashion brands grows.