Green Angel Syndicate’s third and last pitch event of the year took place on 30 November, with a packed room of investors and four extremely interesting and highly contrasting companies, targeting markets as diverse as:
However, all four of them have two essential points in common: firstly, the ambition to grow into a large company with a unique, innovative, cutting-edge product or service; and secondly, a clear ‘green’ mission. Here is our review of their excellent presentations and the lively Q&A sessions that followed.
We first heard from Ultra MTS, whose aim is to improve how people live their lives in cities globally by providing a ‘Personal Rapid Transit’ solution: a multi-origin and multi-destination public transport system that is safe and clean (electric), with on-demand autonomous ‘pods’ travelling on dedicated guideways.
Its system has been working commercially at Heathrow since 2011, with very positive customer feedback and a 100% safety track record. Ultra MTS is now planning to expand globally, targeting cities from the US to China, focusing on new development sites, congested areas, campuses and airports.
How does Ultra MTS compare with other systems that its target clients, mayors and developers, can choose from? The company says it is more expensive than buses, but more efficient, greener and it ‘creates value’ for the land it serves. Compared to light rail systems such as trams, Ultra MTS requires lower capex (construction 3-5 times less costly, as its pods travel on a relatively easy to build elevated rail system), and it enables more flexible routes. Finally, compared to future fleets of autonomous shuttles, the system has the advantage of being ready now, and better solves the key issue of congestion.
The management sees Ultra MTS as a ‘green technology’ company rather than a ‘transport’ company. Its revenues are projected mainly from consultancy fees (feasibility studies and system integration), payment for access to the technology, annual royalties and potentially sponsorship, advertising and ticketing.
Ultra MTS is now raising a series A of £1m. It expects to require a series B of £10m, needed notably to enable it to buy full control of Ultra Global, a subsidiary where its IP is lodged, currently partly owned by Heathrow.
The Chairman is Nigel Clarke who has been with the project for years and has decades of experience in business areas with strong public policy influence.
The second company pitching was Alusid, with patented technology enabling it to make a sturdy, ‘green’ and inexpensive composite building material by recycling glass and mineral waste.
Compared to natural stones or concrete, Alusid’s material is cheaper because it uses free supplies of waste glass (50%) and porcelain (40%); it is also greener, thanks to a production process requiring less energy – and it is itself recyclable. This material, very resistant, can be made into wall tiles, floor tiles and solid surfaces.
Today, Alusid has got a ‘batch plant’ functioning in Lancashire enabling it to produce at small capacity; a UK distributor; and free supply agreements in place. It already has completed six orders from high profile clients and has a large pipeline of potential demand.
The company’s aim is to build an industrial scale production facility by mid-2020. The unit would cost almost £15m to build but Alusid foresees a very high return on investment. Beyond that, the company’s ambition is to rollout several plants internationally to fully leverage its industrial property.
Alusid is raising £1m to create a 12-18 months runway, bringing it to early 2019 – at which point it could raise the financing necessary to build its industrial facility, potentially through an IPO.
Alusid is a spin out company from the University of Central Lancashire. The company was born from a research project led by Professor David Binns and Dr Alasdair Bremner.
Thirdly, we heard from Spinetic Energy, which applies a patented innovative design for ‘wind panels’ to target the under developed market of ‘community scale’ wind power. The idea is to create wind energy harvesting systems which are as cheap and easy to install as solar panels.
Indeed, solar PV solutions exist at utility scale but also at community scale, big and small. However, wind turbines currently only really exist at utility scale, not at community scale. As wind turbines have mainly grown larger and more powerful, small scale wind generation remains too expensive and not easy to install. With its new and patented design, Spinetic is addressing this gap.
Its turbines take the form of wind panels that are cheap and can be installed without a crane. In terms of power, the current prototype has similar output (per unit of active area) to modern commercial PV panels. Each ‘wind panel’ generates ~1kW and several of them can be assembled into a ‘wind fence’ system, providing modularity and adaptability to the needs of each customer.
At this stage, the cost per kW is higher than solar PV, but significantly cheaper than diesel. The company’s vision is that solar and wind are complementary (e.g. wind in winter; solar in summer). Spinetic will initially target the diesel substitution market in ‘hybrid microgrids’, with wind complementing solar and partially replacing diesel. This is a $10bn market globally according to the company, including segments such as mining, island communities and military.
Spinetic has identified a route to market via ‘Engineering, Procurement and Construction’ partners and needs to recruit a commercial director in early 2018.
To date, the company has raised £1.9m of funding, including from IP Group, and it is now raising £750k. The team is composed of engineers and PhDs from Oxford and Cambridge universities with extensive professional experience, including Dr Nick Goddard (CFO) and Dr Giles Rodway (CEO/CTO).
Finally, what if we could solve climate change by sending the right market signal to institutional investors around the world about each listed company’s exposure to carbon and climate related risks, as well as green revenue opportunities?
This is the ambitious vision of ET Index, which aims at helping institutional investors identify, understand and manage carbon and climate related risks and opportunities. We know that 80% of global fossil fuel reserves should not be burned if we want to avoid global warming of more than 2°C. As such, significant write-downs should be expected for fossil fuel companies. If we want to avoid market crashes, investors need to be able to price this risk and reallocate assets progressively, rather than wait – and wake up to it when it is too late.
ET Index produces and publishes a ranking of large listed corporates globally as a function of their carbon emissions. In this ranking, it penalises those which do not disclose data, creating an incentive for them to improve disclosure. ET Index also sells analytics to enable investors to assess their portfolios (in beta test since early 2017 with 50 clients). It has also built ET Low Carbon Indexes which can be tracked by investors, and have historically outperformed the market whilst offering a much lower exposure to carbon and climate risks.
The company’s business model is to sell annual subscriptions to these data, analytics and indexes. So far, ET Index has got carbon emissions data on 3,000+ corporates and has built its ET Rankings and ET Low Carbon Indexes. Indexes, once established and when large AUM (assets under management) follow them, can generate massive revenue and profitability.
Having raised £1.1m in 2016, ET Index is now raising a series A of £6.5m, which it expects to be its final round. It will use funds to: 1) expand its data to green revenue opportunities and the 17 UN Sustainable Development goals – recruiting a large team of analysts to create a unique proprietary dataset; 2) to develop the ‘ET Reporting Portal’ so that corporates can self-report their data; and 3) for marketing and sales.
The team includes co-founders Sam Gill (CEO) and Jonathan Harris (CTO), with notable support from James Cameron (Co-chair) and two highly experienced experts from HSBC.
For those who missed the pitch evening last week, and those of you who want to refresh your memory of any of the pitches, you can now see the full recording of the evening or any particular pitch at: https://www.intelligentcrowd.tv/login/ .