Neither Tim Shaw nor his business partner had a science background when they hatched the idea for cultivating a smarter way to grow microalgae — the raw material behind everything from biofuels to food.
But they did have decades of business experience and a desire to break free from corporate life and strike out on their own. Most importantly, they’d had an “aha” moment about how to develop a product that wasn’t out there.
They started Columbia-based BrightWave, which developed “photobioreactor” tanks, or PBRs, to cultivate algae indoors on an industrial scale. The company is part of a Baltimore pipeline that includes 385 venture-funded startups launched from 2020 through last year, according to a new study of the tech ecosystem.
Despite investment declines after the pandemic and looming federal research cuts, the study shows, a steady flow of entrepreneurs are branching out, taking risks in digital health, cybersecurity, artificial intelligence and other fields.
BrightWave’s low-cost technology features self-cleaning, in-water grow lights and uses smaller footprints than traditional methods. It allows growers to move cultivation indoors from large outdoor sites, where contamination can be a problem. And it will enable clients such as manufacturers to co-locate algae-growing operations at their plants.
“A lifetime of business experience has taught us to be adaptable,” said Shaw, who’d helped companies build supply chains in 25 years at UPS, while co-founder Ken Peretti sold software. “What’s been cool is that we are literally selling these photobioreactors into about a dozen different industries.”
BrightWave, founded in 2019, launched its first products two years ago and is on track to expand distribution of its patented PBR systems to customers on four continents, in pharmaceuticals, food, animal feed, cosmetics, cement, biofertilizers, fuels and wastewater treatment. Last year, it won a $3 million contract with the United Kingdom-based Northumbrian Water Group, a wastewater services company that plans to transform algae grown in sewage into sustainable aviation fuel.
Regional advantages
Startup founders point to regional advantages such as proximity to defense and research facilities, a strong base of contractors and access to specialized talent.
“The support, the community, the access to really good talent has always been important,” said Sean Carton, an entrepreneur who has co-founded and helped grow two Baltimore businesses and is launching a third, tech consultant Applied Understanding.
The region has followed national trends with recent decreases in venture funding, which peaked in 2021 at more than $1 billion, according to the 2025 Baltimore Tech Ecosystem Report by UpSurge, an organization that helps technology startups and merged with the Greater Baltimore Committee this year. In some sectors, such as life sciences and therapeutics, venture capital had flowed freely, analysts said, thanks to low interest rates, demand for digital technologies and an increased appetite for risk.
“You saw a lot of those types of investments happening in the Baltimore region as well that ended up yielding some great outcomes,” said Kory Bailey, GBC’s chief ecosystem officer. “In years after that …investors were being a little more cautious.”
Funding each of the past three years in the region has been steady yet well below 2021’s high of $1 billion for 87 startups. Last year, it totaled nearly $665 million. Meanwhile, the number of new businesses getting that capital has decreased each year, from 89 in 2022 to 60 last year.
Building a startup ecosystem where the region can compete with other cities will hinge on attracting more private investment and focusing on strengths such as national security and global economic competitiveness, more likely to win federal support under the Trump administration, Bailey said. The region is well-positioned to do so, he said, thanks to anchor health care systems and defense facilities, along with access to airports and the Port of Baltimore.
But “if we want to accelerate that growth and be on pace with other regions that have really leaned into their sector strengths, we’ve got to be more intentional about how we elevate the innovations and leaders that are happening now,” Bailey said.
By tracking startups, the business group expects to focus on and drive investment to companies in the hottest sectors, hitting milestones for job creation, investment and revenue. That can be difficult, as many entrepreneurs launch or fizzle out with little fanfare or public reporting. GBC hasn’t been able to track startup failures, Bailey said, “Startups inherently all don’t win.”
Ongoing reductions in federal spending in research and education is “concerning,” he said. But he is hopeful opportunities for growth will expand through the private sector, philanthropy or other entities committed to the region’s prosperity.
In its latest report in March, UpSurge tracked 486 operating technology startups, about the same as in a 2024 report. Most offer health care services or products and often form through the transfer of technology from incubators at places such as Johns Hopkins University, University of Maryland, Baltimore and Blackbird Labs.
Besides Baltimore city’s 336 tech startups, clusters have emerged in Howard County, with 68, Baltimore County, with 55 and Anne Arundel County, with 43. After health care, key industries include information technology, such as cybersecurity and AI applications, followed by finance, manufacturing, media, education, energy and advertising. GBC wants to expand the database to non-tech service startups.
‘Taking that leap’
Baltimore-based Elos Thermal, started by two 2019 graduates of Archbishop Curley High School, is one of those that’s taking off.
Thunlwyn Garcia and Anthony Dragisics played soccer at two different Division 1 colleges and commiserated about competing in adverse weather. Garcia, who studied entrepreneurship at Mount St. Mary’s College, approached Dragisics, then a Villanova University business major, with an idea for insoles that could regulate temperature while offering pain relief.
With money borrowed from parents, they used 3D printers in their dorms to make prototypes. In their senior year, they secured a patent, convincing them to push ahead full-time after graduating in 2023.
“It was a big decision for sure, taking that leap,” said Dragisics, 24, an Ellicott City native. “We felt confident this had a place in the market.”
From Spark Coworking Baltimore at Market Place downtown, where the partners said they’ve learned from more experienced entrepreneurs, they plan to launch Elos insoles nationally in October through Amazon and specialty retail shops. They’ve so far sold about 500 units to skiers, hikers, runners and other athletes in a limited launch in February on Elos’ website. Production is now handled in Asia.
“Finding good partners has been the most challenging,” Dragisics said. “We underestimated how long it takes to form good relationships and partnerships.”
Building a startup
Shaw, of BrightWave, said his algae-growing products have global appeal, but he found expertise to start the business much closer to home. The co-founders became interested in algae because of its growing popularity as a biofuel.
In 2019, the new company rented space near algae specialists at the Institute for Marine and Environmental Technologies, part of the University of Maryland’s Center for Environmental Science, working with scientists on research and development and building prototypes.
They sought advice from the state Department of Commerce, which led them to Early Charm, a Pigtown-based company that creates, owns and operates businesses that commercialize new technologies. Early Charm provided more business leads.
They assumed they’d have to go overseas for manufacturing, but found Early Charm’s subsidiary, Sanosona, could take on production and assembly. BrightWave also found local plastics, packaging and other suppliers.
Initially, “it was almost a foregone conclusion that if we want to do this right and keep our manufacturing costs down, it was going to have to be offshore, and it turned out to be the complete opposite,” Shaw said.
One of the biggest challenges was attracting institutional investors. Deals with private investors came close but fell through. After months of dead ends, the founders ended up funding their startup.
“Hard tech is a tough sell for investors,” Shaw said. “Investors wanted to see monthly baked-in revenue. That wasn’t our model.”
While uncertainty over grant funding is concerning for firms similar to BrightWave, Shaw says his firm, expecting $3 million in revenue this year from the U.K. deal, is set up to weather the storm. It has avoided relying on grants and seeks both public and private sector customers, many from overseas.
Carton, who says his new tech consulting firm will pursue a people-first approach, expects challenges ahead for startups that lose federal funding or work with clients affected by cuts. But starting out has become easier, in some ways, he said, with services and information more available online. That can reduce the time and expense of registering a business, finding contractors or traveling to in-person meetings, lowering barriers to entry.
In the past, he co-founded a web development firm in 1996 that became digital agency Carton Donofrio Partners, which employed 100 people at its peak but no longer exists. He later helped start ad agency idfive, a marketing and communications agency in Baltimore’s Mount Vernon neighborhood.
“The appeal is setting your own path,” Carton said. “These days, it sort of feels like, yeah, it’s risky, but so is anything. Being employed anywhere these days is not a guarantee.”
Have a news tip? Contact Lorraine Mirabella at lmirabella@baltsun.com or (410) 332-6672.
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