FRX Polymers Inc. (FRX; Chelmsford, MA), a startup company creating inherently flame retardant polymers and additives from phosphorous, has secured its first round of institutional investment, garnering $6 million in new venture capital funding from Israel Cleantech Ventures (ICV) and Capricorn Venture Partners (CVP). ICV and CVP split the investment, which was finalized on July 27. Although many startups have been negatively impacted by the global economic crisis and freezing of credit markets, Marc Lebel, FRX president and CEO, told MPW his company was not adversely affected. “It’s interesting,” Lebel said. “I didn’t find [attracting investment] difficult actually—I think there’s a lot of money out there, particularly in the U.S., Europe, and Israel. In those three regions, there is money, and there are funds that are flush with cash, and they are looking for good investments.”

Eric Koester, an associate in law firm Cooley Godward Kronish’s Business department and member of its Emerging Companies practice group, as well as organizer of SPE’s Clean Technology Business Forum held at the Global Plastics Environmental Conference (GPEC), sees the FRX monies as a positive for the industry after a relatively slow last half of 2008 and the first half of 2009 for new venture capital and institutional investment.

“It is a good sign for technology-based businesses to see an investment from some outstanding funds into FRX Polymers,” Koester said. “Investors continue to look for capital-efficient businesses that can scale and gain sizeable market share. It is a good sign for the plastics technology sector to see new funds being deployed.”

FRX Polymers, which was honored at last year’s GPEC, is currently in the commercialization stage for its family of polyphosphonate homopolymers and copolymers. The company says that in addition to being tough, transparent, and offering high melt-flow rates, the materials are inherently flame retardant, offering products an alternative to brominated and halogenated flame-retardant additives that are gaining increased regulatory attention. FRX says the high molecular weight of its products prevents them from migrating out of the carrier resin when used as flame retardant. The company pegs the flame-retardant plastics industry at $15 billion/yr.

After starting work at the beginning of 2008, Lebel said FRX continues the process of qualifying the product, with approval approaching for a glass-filled polybutylene terephthalate (PBT) for consumer electronics, as well as fiber application.
The company continues to supply small lots from its pilot plant in Massachusetts, but is currently building a semi-works facility in Switzerland. Set to be online in late 2009 or early 2010, that facility will start with 50 tons/yr capacity. A second and third phase expansion will boost output to 1000 tons/yr by the end of 2010, according to Lebel. —Tony Deligio