As intelliPaper LLC ramps up production to fill its backlog and meet increasing demand, the Edwall, Wash.-based maker of recyclable, paper-based USB flash drives has a new product in the works that it expects will help it accelerate its growth. 

Meantime, company President and CEO Andrew DePaula says, the company is working to keep up with current demand.

“We ended up signing up with a distributor in 2013,” he says. “As a result of that, we generated enough business to keep us slammed.”

DePaula says the company expects to launch by the end of August a product called swivelCard, which will be a business card with one of intelliPaper’s USB drives built into it. As envisioned, a paper USB drive will pop out of a swivelCard business card when that card is folded. The drive, he says, would be pre-loaded with data, though he says the information on the drive can be changed even after the card has been handed out. 

“There are all kinds of bells and whistles that can help a humble businessperson,” he says. 

As envisioned, the technologically enhanced business cards would be high end, with minimum 200-card orders at the cost of just under $2 a card to start. As the company increases its production capacity, however, he says that could drop quickly. He says the company’s target retail price is 50 cents per card.

Industry studies estimate that organizations spent $580 million on business cards in 2009, DePaula says.

“One of the biggest potential markets for us is business cards,” he says. “Even a small part of that market could be big for us.”

Located in a 3,500-square-foot facility about 40 miles southwest of downtown Spokane, intelliPaper currently employs 13 employees and is producing about 30,000 intelliPaper units a month, DePaula says. Such units range from a trade show handout for FedEx to a mailer for the American Chemical Society, each of which involved a run of a few thousand units.

The company had operated in a 10,000-square-foot facility in Edwall until last spring, when a flood hit the small farm town. DePaula says the company had a lot of empty space in its former space, and he’s confident the current location on higher ground can accommodate its short-term, projected growth. 

IntelliPaper uses a small silicon chip that is sandwiched between two pieces of paper in such a way that it can be imbedded in a business card or advertising mailer. The user then simply can tear off the strip of paper containing the chip and fold it, which makes it thick enough to connect with the USB ports on computers. The paper product is similar in thickness to heavyweight cardstock when it isn’t folded up into a USB plug-in shape.

He says intelliPaper can take on production runs ranging from 5,000 units to 50,000 units currently. It has had to turn down jobs that involve larger runs, and even at the current run job sizes, the company currently has a backlog of work that exceeds three months. 

DePaula says it is working to ramp up production now and hopes to be able to make 500,000 units a month within a year and a half. As the company adds capacity, he points out, that backlog will shrink, he says. 

The company has to fabricate much of its own equipment, which makes the initial ramp-up go slowly.

“We sit at the crossroads of three industries,” DePaula says, referring to integrated circuits, printing, and packaging. “There’s no machinery that does exactly what we need it to do.” 

As it adds capacity and is able take on more work, intelliPaper is projecting that it will achieve profitability within 12 months, DePaula says. Also, it hopes to add between 10 and 20 employees during the next 18 months.

“Once we achieve that, our growth will be exponential,” he asserts. 

The company recently received a $750,000 loan that DePaula says should give it the capital it needs to operate and expand production during the next 12 months, until it achieves profitability.

The company has 12 owners, including DePaula, who are scattered throughout the U.S., including in Washington, California, Missouri, and Alaska. Since the company’s inception in 2009, he says those owners have put about $2 million into the company. Consequently, he says, the company has about $2.75 million invested in it. 

He declines to disclose the names of the other owners.

In addition to the owners’ investment and the recent loan, intelliPaper launched an crowdsourcing campaign last year through Indiegogo.com to raise additional capital. The company, which had originally planned to run its campaign through Kickstarter then switched to Indiegogo, set a lofty goal of raising $300,000. The campaign only garnered the company $6,000. 

However, DePaula says, the company had other goals with the campaign that it accomplished successfully. First, the campaign raised the company’s profile and gave it visibility it wanted. Also, he says, it provided feedback on some of the company’s products and gave it a better idea of the direction it should head.

More specifically, he says, “The direction we wanted to go was greeting cards, but the market was clear that it didn’t want to do that.”