University of Illinois researcher's fuel cells spark investor's interest

The News-Gazette, Champaign-Urbana, Ill. --Sep. 12--CHAMPAIGN, Ill.

Sep. 12--CHAMPAIGN, Ill. -- Larry Markoski calls it his "dream come true."

For the last 3 years, the 34-year-old University of Illinois research specialist has worked to get his fuel cell business, INI Power Systems, off the ground.

Six weeks ago, his company landed a $3 million investment from MHI Energy Partners of Norwalk, Conn.

Thanks to that vote of confidence, Markoski's fledgling company has moved out of the UI's EnterpriseWorks building and into new quarters in Cary, N.C.

"It's been a huge thing for us," Markoski said Tuesday in a phone interview from North Carolina. "It's allowed me to tackle this business, fulfill some of my dreams and pursue this on a full-time basis. I can quit my day job and focus on what I really wanted to do."

His day job, until July, was working as a research specialist in chemistry at the UI's Beckman Institute. What he really wants to do: develop microfluidic fuel cells that can operate three to five times as long as similarly sized rechargeable batteries.

Now that INI Power Systems has moved to its own building in Cary, the next two years will be devoted to building a fuel cell for the Army.

"What we're building is a 20-watt fuel cell unit, initially for the Army, that's meant to power portable electronics like telecommunications, radios, GPS (global positioning system) units and perhaps laptop computers," he said.

"It's an unconventional design," he said. "It takes advantage of the phenomena that takes place in microfluidic channels, thereby solving some of the technical issues that have plagued direct methanol fuel cells since their inception."

Markoski said the investment from MHI Energy Partners "came about as a word-of-mouth, chance occurrence. They were in town looking at coal technology for OTM (the Office of Technology Management) at the university, and they decided to give us a look-see, just by chance, and it was love at first sight."

"It was a total cold call," Markoski said. "They were familiar with the fuel cell business but not with our technology."

Markoski said the investors had a similar business model in mind, so INI did not have to make any major change to its business plan.

"Larry's technology really intrigued us," said Tim Fogarty, managing director of MHI Energy Partners, a venture fund focused on energy technologies.

Mike Fritz, director of the UI's Office of Technology Management, said MHI's investment in INI Power validates the high-potential technology being developed at the UI.

"The exciting thing is the increasing external interest in UI technology," he said.

Fritz said two other start-up companies on campus, Renew Power and Chem Sensing, have attracted similar levels of investment, and another, Moire Inc., may do so soon.

MHI is a major investor in another local company, Dynamic Separations, "and is providing the leadership talent to get that company off the ground," he added. Dynamic Separations focuses on recovering the tiny particles of coal known as "coal fines."

Fritz said he was disappointed that INI Power ended up in North Carolina.

"We try to keep as much technology in-state as we possibly can, but there are circumstances when this stuff is going to happen," he said. "They still have a contractual relationship with some labs on campus. So although they're off to North Carolina, there will still be some activity here and collaboration on campus."

As INI's president, Markoski said he had "no regrets" about leaving Champaign-Urbana "but a lot of fond memories."

"It was a decision we had to make," he said. "I regret we couldn't do everything where we were, but this was a perfect time to move."

Markoski said the business moved to Cary "for a number of reasons, business and personal."

"It brought us closer to investors; to one of our funding agencies, which is the Army; to some of our subcontractors as well as potential customers; and to some of my wife's family," he said.

His wife, Julie INI's vice president of operations graduated in December 2003, having received a master's degree in business administration and a doctorate in chemistry.

A third employee, Alex Primak, the company's senior scientist, also made the move, and Markoski said he expects to hire two or three people in the next six to 12 months.

He said his company has about 24 months to prove itself.

"We need to demonstrate a device that can be taken outside the lab and demonstrate the effectiveness of how well it works," he said. "We need to show that our technology is a major step forward in the portable power arena."

The company is actually Markoski's second attempt to start a business. In 1998, he founded Chromax, a company that developed chromatography devices for chemists, but he eventually pulled the plug on that venture.

INI Power Systems derives its name from the "I-L-L ... I-N-I" chant heard at UI sporting events.

"No one out here knows what INI means but they will," Markoski said.

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