John Tu is coming off a standout year at computer memory company Kingston Technology Corp., with record-breaking sales pushing the Fountain Valley maker of flash memory products, gaming equipment and other computer-related memory products to the top spot among Orange County’s largest private companies.
2020 could turn out to be a more notable year for Tu and his family, thanks in part to a much smaller business now making waves in Irvine.
Tu is the primary backer of Fluxergy LLC, an early-stage medical diagnostic startup developing a new testing system for use by physicians at the point-of-care.
At the start of 2020, Fluxergy was exploring potential applications in human and animal healthcare. Its first product in veterinary health was expected to be its main achievement for the year.
Then the pandemic struck, and President and co-founder Tej Patel realized Fluxergy’s system—an analyzer device about the size of a small desktop personal computer—could be used for much more pressing needs helping doctors on the front line quickly identify individuals carrying the COVID-19 virus.
A quick pivot took place.
Fluxergy was among the first in the country to develop a molecular PCR test that accurately identifies in just one hour the virus that causes COVID-19, and it’s one of only a few tests that can be done at a patient’s bedside.
Its approach to testing eliminates days-long wait times to get back results from centralized labs, and makes extra lab equipment unnecessary.
“We already had an infrastructure that heavily utilized point-of-care testing, before this whole COVID-19 thing happened,” Patel said.
The infrastructure is getting a major boost, thanks to Tu.
On May 13, Fluxergy announced a $30 million investment, via the Kingston co-founder, with funds earmarked to ramp up production of its diagnostic testing system. The company’s goal is to deliver as many as 1 million COVID-19 tests per month by the end of 2020.
It’s the largest investment outside Kingston that Tu is reported to have made; he told the Business Journal this month that Fluxergy is the only medical company he’s invested in.
His total investment in the company is now approaching $50 million.
Tu and his business partner at Kingston, David Sun, are longtime fixtures on the Business Journal’s OC 50 listing of the area’s most influential executives.
Tu’s work to bring Fluxergy’s diagnostic system to the front lines of the COVID-19 crisis—along with other notable community-focused work during the pandemic, such as a $2.5 million gift this month to UCI Health—makes him one of just 20 repeat entries in this year’s edition, a special section that begins on page 25.
Tu, whose wealth is estimated by the Business Journal to be in the $4.8 billion range, cited a similar connection between Fluxergy’s founders, and the bond between himself and Sun: the duo started Kingston in 1987 after the financial crash of that year had wiped out their fortune from a prior business.
“Passion … they are full of passion,” John Tu told the Business Journal.
“I had a feeling they want to do this not only because they want to be like [tech icons] nowadays—a startup company, successful, IPO, making millions of dollars—that seems to be not really their primary goal.
“I have a feeling they want to do it because of what they will come up with, [wanting to be] part of life-saving technology, and to be part of this medical field saving lives.”
Patel founded Fluxergy in 2013, along with Vice President Ryan Revilla. Another early employee who helped connect the company to financial backers: Chief Financial Officer Jonathan Tu, the son of John.
“These three right from the beginning—I just feel these three are such a good partnership. It seems to be all very clear, and very loyal and passionate—and so I decided to say yeah, okay let’s do it,” said John.
“I had no idea what I was getting into,” he said of his initial backing. Results thus far are “very fortunate. I’m very happy.”
Tops in OC
It’s been a fortunate few years as well for Kingston, whose portfolio of solid state drives, memory products for servers, laptops and computers, flash drives, memory cards and other related business lines has been booming, both for home and business use.
Tu late last year told the Financial Times he expected Kingston’s revenue to approach $14 billion for the year. The company was also reported to be shipping some 1.3 million products a day.
“A big chunk of that is demand from the big server companies,” he said at the time. “Plus, there are still enough consumers.”
Such figures would comfortably make Kingston No. 1 among OC’s ranks of private companies by sales. The firm, which employs some 640 people in Fountain Valley and 3,600 people worldwide, last week said 2019 figures were closer to $13 billion; prior Business Journal estimates put Kingston’s sales under $10 billion.
There are echoes in the technologies of both Kingston and Fluxergy, said Patel.
“In our DNA, manufacturing is very critical to what we do,” Patel said.
“For the last few years, we have spent a significant amount of time developing a very advanced manufacturing process—it’s very similar to how you make circuit boards.”
Late last year, Fluxergy brought aboard Dr. Ali Tinazli as chief commercialization officer. Prior to joining Fluxergy, Tinazli led corporate global strategy at Hewlett-Packard Inc.
Of the latest funding round and plans to step up manufacturing, Tinazli said this month that the moves reflect “our confidence in our technology as an innovative solution to COVID-19 testing shortages.”
The company’s system was first tested out during the pandemic at the University of California-San Diego. It is working to get Emergency Use Authorization with the Food and Drug Administration, to permit medical sites with CLIA-certified high-complexity laboratories to start using the diagnostic system.
In terms of Kingston’s success—and hopefully in the future achievements of Fluxergy— there’s a lesson to be learned for other entrepreneurs—according to Tu, well-known in local entertainment circles for his band JT & the California Dreamin’, which often play at area fundraising galas. He’s the drummer.
“I always believe that a project, a company, a startup idea, that most of the time it fails—one important reason is the partnership.
“You’re always running into obstacles, and also frustrations. A lot of the time when this happens, the partnership will go sour, because then it loses interest— [and you start] blaming each other,” Tu said.
His mantra: nobody reaches success alone.