The Detroit Innovate Fund, a new fund to help launch local high-tech startup companies, has invested $250,000 in Detroit Materials Inc., a Wayne State University spinoff that hopes to make cast-steel parts for the military, mining and off-road markets.

The company will use that money, and $150,000 awarded this month through a phase-one Small Business Innovative Research grant from theNational Science Foundation, to do small-scale prototyping and validation testing at Michigan Tech University. The SBIR grant came with a matching grant of $25,000 from the state’s Emerging Technology Fund.

CEO Pedro Guillen said he hopes Detroit Materials can start generating revenue next year by selling gears, wear plates and cutting tools, such as the teeth on large industrial digging tools.

Guillen said he is in talks with two local companies to make his company’s products if the testing goes as hoped at Michigan Tech. He is also looking for headquarters space, with Midtown the first choice.

Nick Moroz, co-founder of Farmington Hills-based CSquared Innovations Inc., a University of Michigan spinoff that makes nanoscale coatings for lithium-ion battery electrodes and solar cells, is chief technology officer. Guillen said he will soon hire two engineers to work on product development.

The company would like to sell to domestic auto suppliers, but it needs to establish a track record in other markets before beginning the long and costly process of becoming certified as an auto supplier.

Guillen said he is preparing a response for a request for information, due June 24, from the Tank Automotive Research, Development and Engineering Center in Warren about lightweight materials technology.

Detroit Materials is based on patented research by Susil Putatunda, a professor of chemical engineering and materials science in WSU’s College of Engineering, which involves austempering, a heat treatment for steel and iron that results in improved mechanical properties.

Putatunda’s work was previously funded by a three-year NSF grant of $303,461 that began in June 2009.

The school’s office of technology transfer signed a license to spin off the technology to the company in March following due diligence by Adrian Fortino, a vice president of Invest Detroit, a community development organization affiliated with Business Leaders for Michigan. Detroit Innovate is an early-stage investment fund of Invest Detroit.