Tiller says $118 million investment “great next step for Genera,” but there are many more opportunities ahead
(EDITOR’S NOTE: The following article is based on a recent interview with Kelly Tiller about the nearly 12-year journey that resulted in Genera securing more than $118 million in new investment capital that will be used to build a manufacturing facility. Tiller will share her experience as an entrepreneur during a fireside chat at this year’s “Startup Day” on September 24 in Knoxville. More details about the event can be found here.)
By Tom Ballard, Chief Alliance Officer, PYA
“This is a great next step for Genera, but there are a lot of other opportunities ahead,” Kelly Tiller, President and Chief Executive Officer, says of the recent announcement that the Vonore-based enterprise has secured more than $118 million in new investment capital.
Those funds will allow the start-up that traces its roots to the “Tennessee Biofuels Initiative” to build its first manufacturing facility to produce the Earthable® line of sustainable agricultural fiber products. If all goes as expected, the first products in a line of compostable food service packaging products like plates, bowls, and takeout containers are expected to be on the market by fall 2020.
Tiller says that, at least initially, the products that Genera produces will be sold through distributors rather than a direct to consumer sales force. Not only is that less costly, but it also builds on strong, existing relationships nurtured over the years.
“We have developed great customer partners,” she says in describing the more than decade-long journey that started with the initiative championed by the late David Millhorn, then Executive Vice President at the University of Tennessee (UT), and funded through an appropriation from the State of Tennessee during the administration of then Governor Phil Bredesen.
“He (Millhorn) had real vision and was not afraid to take on hard challenges,” Tiller says of the UT executive who died in December 2017.
During our recent interview, Tiller emphasized the importance of strong relationships as a key to the success that Genera is now celebrating. Those relationships cross the spectrum – from the customer partners cited above to the team that she has built and even the firm that led the investment round.
“We first partnered with WindSail (Capital Group) in 2014,” Tiller said (see that announcement here.) “They were a good partner, but this (a manufacturing facility) is a different role for them.” She added that the “high-level of respect and trust” the two organizations developed over the ensuing years proved invaluable as Genera sought funding to add a manufacturing component.
Like most of the recent successful investments that companies in the region have secured, Genera’s took time.
“There is one common denominator,” Tiller says. “These (fundraising for cutting-edge technology start-ups) are a long journey; it doesn’t happen overnight,”
She’s proud of the fact that, while the company had some pivots over the decade, “we stuck to our core . . . mutual benefit to farmers and rural communities along with a commitment to sustainability and the environment.”
In describing the journey up to now, Tiller reminded us that Genera started-out as a biomass provider for biorefineries. “Many just assumed that the biomass needed to feed the plants would just show-up. Genera recognized the gap that could exist. Our focus has always been between the farm and the frontend of the manufacturing process.”
Those plans took a slightly expanded direction a few years ago.
“Initially, we thought we could grow a thriving business focused primarily on being a biomass supplier,” Tiller explained, noting that the growth in the rate of demand for biomass from Genera’s customers was less than anticipated for a variety of reasons.
“We then took a serious look at the future and decided to vertically integrate,” she added, meaning Genera’s involvement did not stop after delivering biomass to those who would use it to manufacture products, but actually become a manufacturer itself.
“That decision gives us more control over commercialization and development,” Tiller said. “It was a defined switch in our thinking.”
The results speak for themselves.
As we do with many interviewees, we asked Tiller for those famous lessons learned along the way.
“It’s really challenging when you have something that does not fit a known space,” Tiller observed. “The market is looking for cookie cutters.”
Clearly, the “Tennessee Biofuels Initiative” and the work of Genera were more out-of-the-box.
“It doesn’t matter how good or de-risked your idea is, it takes longer than you expect and is harder than you imagined,” she said, noting the importance of perseverance and having the right team.
On the latter point, Tiller is especially proud of her core team of six to eight individuals, the most junior having been with Genera seven or eight years. That longevity has served the start-up very well.
“We work cohesively as a real complementary team,” she said, noting that she heard about the strength of the team from many of the investors Genera pursued.