Zynnovation LLC is a Virginia state certified Small Woman and Minority (SWaM) company located in Ashland Va. Zynnovation has developed and is marketing a patented green product line: TreeDiaper® Multifunctional Advanced Plant Protection System. This National Science Foundation (NSF) sponsored new technology features rain/snow-water harvesting, super-slow-release irrigation, weed control, storm water retention, erosion control, and protection against extreme weather conditions for trees, shrubs and other plants. TreeDiaper® product line is the first and only landscaping product that combines these functions into one low-cost package. The company slogan is “Save plants, Save water, Save labor, Save the Planet”.

 

 

Fast Facts:  Founder: Dr. Hailing Yang, PhD Year: 2010 Industry: Landscape and Garden Supply Expected 2018 revenue: $702,000 Funding Requested: $500,000 Purpose of funding: Marketing, trade shows, intellectual property cost, sales team base salary, samples, professional fees, product development A message from the Founder: The Team Zynnovation was incorporated in 2010. The Founder & President of Zynnovation, Dr. Hailing Yang, holds a Ph.D. degree in Chemistry (Virginia Tech, 2006). Her technical expertise is in the area of polymer recycling, green products and polymer chemistry. The Co-founder, Dr. Wei Zhang, holds a Ph.D. degree in Chemical Engineering (Virginia Tech, 2005). His expertise is in polymer processing, green technology, and polymer recycling. Mr. Bill Daughtrey, with his 40+ years of business consulting experience, is serving as the Advisory Board chair. Mr. Tim Staub is serving as the Interim Chief Executive Office guiding the company on the marketing and business development. Mr. Staub brings in 30+ years of management and executive level operation experiences with him. Awards and Recognition Zynnovation received two National Science Foundation (NSF) SBIR awards for the development of disposable diaper recycling technologies, which was funding source for the proof of feasibility and some of field trials. Note: the current commercial version does not contain recycled components. Zynnovation was the winner of 2014 Environmental Stewardship Award from Chesterfield County Va and was selected as one of the RVA Companies to Watch 2016 Award by Venture Forum RVA! Innovation Seeking another life for disposable diapers after used, Zynnovation developed and validated a method to recycle disposable diapers as well as a product that would consume the recycled materials, which otherwise has no market value currently. The product is a multifunctional plant protection mat, trademarked as TreeDiaper® Multifunctional Advanced Plant Protection System. Inheriting many features from disposable diapers, the product provides a combination benefits in water saving, weed control, and extreme weather protections for trees or plants. Water conservation is maximized by capturing precipitation / irrigation water that would runoff otherwise. The conditioned soil environment with higher moisture, suppressed weed, moderated temperature, and less runoff (together minerals and nutrients) increases the survival rate and promotes faster tree/plant growth with less maintenance. Municipalities, landscapers, businesses, orchards, nurseries, vineyard, and homeowners can have substantial savings on maintenance, which may reduce replacement costs. Competition  One major competition is the slow release watering devices (e.g. Tree Gator®, Arbor Rain™, and Ooze Tube®)–which requiring periodically manual water refilling–the TreeDiaper® product (36R) can save nearly $30 per tree per month in labor alone in addition to 100s gallons of water per tree in a single season. The slow release water bags are not designed to collect natural precipitations and must be manually filled with irrigation water. In contrast, TreeDiaper® products can be charged by natural precipitation or irrigation. They can also serve as weed and moisture conservation barriers. TreeDiaper® product line can penetrate into multiple markets such as urban forestry management, property landscaping, home gardening, and agriculture productions in orchards, vineyards, and nurseries. Sales  Since the beginning of 2016, Zynnovation begin to market TreeDiaper® technology through TreeDiaper.com, social media, and professional tradeshows. The total 2016 sales revenue is $30,000, many of which were small quantities for trial purposes. The 200+ customers are in a variety of commercial, municipal and retail market segments. Starting in the spring of 2017, many customers came back to place much larger orders. The sales revenue for 2017 is ~$180,000 including the 5000 units of TreeDiaper36 as described below. Zynnovation inked with ACF Environmental, Inc, with a contract manufacturing agreement and a distributorship agreement in 2016. Thus, Zynnovation is marketing TreeDiaper® products as “Made in the USA”. After one and a half years of sales and marketing, Zynnovation has decided to focus on the municipal/commercial landscaping market. Testing the consumer/retail market will continue, but no special efforts will be provided unless they benefit the focused area also. Marketing and sales in municipal and commercial landscaping markets are heavily placed on channel partners and distributors. Internal and independent sales reps will be hired to do direct sales and also to manage distribution channel. Our current distributors have included ACF Environmental Inc, A.M. Leonard, Site One Landscape Supply, Arett Sales, Meyer Seeds, Ecoturf Midwest, and others. Sales are expected to follow seasonal trends of the landscape industry with highest potential in the spring and summer months. Manufacturing and inventory levels will be monitored to accommodate peak seasonal demands. Professional tradeshows remain as an important method to reach out to potential customers and channel partners. For example, we met the VP of Business Development of Rain Bird Corporation on a trade show in Nov 2017 and we are now in discussion of private-labeling products. Financial Considerations Zynnovation experienced a significant revenue growth from Year 1 (2016) to Year 2 (2017). Although it is not breaking even yet–due to high patent costs and marketing costs compared to revenue– it is expected to become profitable in 2018 and 2019. Our projections are based on the following key assumptions: The company has passed the initial slow growth period, during which establishing awareness and educating potential customers is more important than making profit; Our existing customer base and several key collaborating customers are producing third party test results, which have been and will be published. For these customers (with special discounts), profit was not the focus, but joint publications/endorsements were considered more important. Zynnovation has contracted out manufacturing to ACF Environmental Inc. Due to the combined distribution agreement with ACF, Zynnovation would not have to pay for inventory prior to get paid by customers. So financial costs and capital investments remains low. Private labeling partners will start to pay either distribution price or a royalty. During the first year, marketing costs consumed more than 100% sales revenues and more than 50% in the Year 2 because of the relatively low sales revenue and high cost for customer acquisition. It is expected to have the marketing cost no higher than 30% for Year 3 with the expectation of increased revenues and the cost remain similar amount. But it will continue to be reduced to 20% of the sale revenue in Year 4. Residual profits will be reinvested in expanding the product line and further research and development for next three years. Zynnovation is currently looking for $500,000 fund raising to empower our marketing efforts and speed up the commercial roll-out.