A business development tool called “Economic Gardening” helped a Tri-City tech firm land a multimillion dollar investment, its founder told Washington Gov. Jay Inslee.
The governor met Tuesday with Junus Khan, founder of Kennewick-based Carbitex Inc., and representatives from four participants in Washington’s first Economic Gardening initiative to learn how the data-driven economic development program is faring.
Khan disclosed that Carbitex secured millions in venture capital from Bay Area investors while it was going through the Tri-Cities Regional Chamber of Commerce’s Economic Gardening pilot project.
The chamber brought the program to Washington two years ago and is wrapping up a pilot that involved five local companies, including Carbitex.
In April, Inslee signed legislation sponsored by Sen. Sharon Brown, R-Tri-Cities, to include the program as part of the Washington Department of Commerce’s suite of tools to support growing businesses statewide. Yakima is the latest to sign on, launching its own program a week ago.
Economic Gardening helps CEOs such as Khan identify challenges and conduct research. The concept originated in Colorado in the 1980s.
Khan founded Carbitex Inc. in his garage in 2012 to advance carbon fiber technology. It outgrew his garage in six months. Today, it employs 17 and exports more than 95 percent of its product. He signed onto the Economic Gardening pilot last year.
The project validated Carbitex’s own research and helped focus resources on the fundraising effort, Khan told the governor.
In April, it sold $3 million in equity financing to Paxion Capital Partners of Menlo Park, Calif., and Westlake International of San Mateo, Calif., according to a form D filed with the U.S. Securities and Exchange Commission.
Khan told Inslee Carbitex will grow to 30 employees in the coming year, thanks to the investment.
Inslee called Carbitex a “poster child” for an economic development program that focuses on existing businesses, rather than firms that might be convinced to relocate to Washington.
“I love the idea of using ‘big data’ to help small companies become big companies,” Inslee said.
The chamber launched the Economic Gardening pilot in 2014 with $35,000 from Battelle and GESA Credit Union. Five companies agreed to participate. In addition to Carbitex, they are Paragon Corporate Housing of Richland, Pay Plus Benefits Inc. of Kennewick, Plastic Injection Molding Inc. of Richland and elevate of Richland.
Lori Mattson, president and CEO of the chamber, said the initiative is ready to move into the next phase with five new companies. It targets “second-stage” companies with less than $50 million in revenue and 100 employees.
The program provides 36 hours of support in planning, strategic thinking, marketing and data analysis, among other services.
John Crook, president of Paragon, said that as his company turns 20, it is thriving with offices in Boise, Salt Lake City, Portland and soon, Seattle.
Crook thought Paragon had a strong online presence until its Economic Gardening coach presented it with an analysis of the company’s web performance relative to its competitors.
“I gave the report to my marketing director and said, ‘Here’s your 2016 blueprint,’ ” he said.
Inslee, a Democrat, is running for re-election this year.