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Gartenzwerg – Personal Smart Garden
Ambition – Gartenzwerg is building and selling a ‘personal smart garden’ that enables customers to grow their own fruits and vegetables at home, sustainably, all year round, at the push of a button. The product is a natural indoor garden, pairing proprietary IoT technology with a gamified user app.
Market and business model – The founders believe that smart indoor gardens will become as commonplace as fridges in homes. Today, Gartenzwerg’s personal smart garden is a new category, but the connected houseplants and flowers market is very large (€36bn in Europe; £2.2bn in the UK). In the US, 6m people ‘took up gardening’ in 2016 of which 5m were millennials. Gartenzwerg defines its target audience as ‘LOHAS’ (Lifestyle of Health and Sustainability).
The garden’s retail price is £144 and related supplies cost £7/month (‘all-inclusive’ premium offer at £12/month). Gartenzwerg also seeks other revenue streams including advertising (on the app), food trade, technology licensing and big data sales.
What it’s achieved so far – The company has sold its products in 11 countries so far, its main markets being the US, UK, Germany and Singapore. Gartenzwerg has signed a letter of intent with Gardens By The Bay in Singapore, representing annual revenue potential of £5m+, and an agreement with the #1 electronics retailer in the UAE. It has attracted good press coverage (e.g. BBC Radio, London’s Metro newspaper) and has raised a pre-seed round of £200k earlier this year.
Team – The two co-founders are Sabrina Palme (CEO), with a background in product design, business development and marketing at Unilever and Grey, and Andre Quintanilha (COO), with experience in strategy, operations, finance and supply chain with Accenture and Nissan.
Exit – The company targets either a trade sale to a company such as Ikea, or an IPO on AIM.
Fundraise – Raising a seed round of £1m (EIS), of which £400k are already committed. Funds will be used for product certifications, establishing large-scale production, further product development and marketing & sales.
Swytch – Electric Bike Conversion Kit
Ambition – Swytch’s long term ambition is to be the dominant brand in the e-bike category, starting with its current product, an innovative electric bike conversion kit which works on any bicycle, and progressively extending its product range.
Market – The e-bike market is worth over $100bn globally, with Europe (€4.2bn in 2017) and the US (less than $100m) growing rapidly. The conversion kit market represents 5% of the e-bike market.
Business model – Swytch’s competitive advantage is that its product is 50% lighter and cheaper than the nearest competitor. In addition, its patent pending design means that its kit – consisting of a power pack; the bracket to connect it; a hub motor wheel and a pedal sensor – works on any type of bike, and no expertise is required to fit it. Beyond its initial product (Swytch Kit), the company targets to launch a ‘Swytch Eco’ kit at a lower price point and, later, a premium kit. The company sees gross margins of 70-75%.
What it’s achieved so far – Since launching in November 2017, Swytch has made over $1m in sales, of which more than half in Europe and more than a third in the US. The product is attracting strong reviews from specialists and has received broad press coverage (e.g. BBC News, Sky News).
Team – The three co-founders are Oliver Montague (CEO), an electrical engineer (Oxford) and chartered accountant, who previously founded a successful online e-bike store; Hayley Bishop (CTO), a software engineer and founder of PUREUI Ltd, a design agency; and Dmitro Khroma, a mechanical engineer with experience in robotics system design and automated last-mile delivery.
Exit – Two options are been considered: a merger with a large EV or motorbike OEM, or an IPO.
Fundraise – Raising £400-750k (EIS), to fund the expansion of the e-bike kit production (working capital) and of the distribution network. Swytch foresees a Series A of £5m in 2019-2020 to fund an expansion into mainstream retail and penetrate other segments of the e-bike market.
NRL – Wood fibre containers, competitive to plastics
Ambition – Natural Resources (2000) Ltd (NRL) is developing a process to manufacture green, recyclable mono-material packaging containers, using moulded fibre treated with bio-degradable coatings, aiming at displacing plastic bottles and containers.
Market – NRL is initially targeting the £10.8bn dry goods market (£0.9bn in the UK), which includes segments such as household, pet care, health foods and horticulture. It will then go for the wet goods market (£40bn): beauty care, lubricants, dairy, soft drinks and alcoholic beverages.
Business model – NRL does not aim at becoming a manufacturer itself, but rather to sell production equipment to enable production by brand owners or packaging suppliers – generating revenues from machine and/or license sales, plus related services. NRL has partnered with Nibek, a specialist engineering business with expertise in novel moulding techniques (also a shareholder in NRL). NRL holds the IP relating to the fibre moulding process and conducts commercial engagement, whilst technical developments are undertaken in partnership with Nibek.
What it’s achieved so far – NRL filed its initial mould patent in 2013; built its first moulding unit capable of making 1,200 containers per hour from recycled paper in 2014; completed proof-of-concepts for a waterproof soft drinks bottle in 2016, and for fibre capping manufacturing in 2017. It is finalising the coating and is targeting a market launch in 2019. To date, the company has received £1.9m in grant funding, raised £1.3m in equity (with a participation from Low Carbon Innovation Fund) and generated customer revenue of £0.4m.
Team – NRL’s managing director is James Gardiner, a production engineer with experience with Turner & Newel, Booz Allen Hamilton and Elster Group. The team also includes Alan Smith (technical director), David Burns (finance director) and Ian Thomas (Chairman, representing LCIF).
Exit – NRL foresees an exit through a trade sale to packaging suppliers or equipment providers.
Fundraise – Raising £500k to complete the development roadmap and to fund marketing and overhead. NRL expects to raise an additional £3.5m over the next three years to increase its marketing and sales resources and to invest in small-scale production equipment.
Rotaheat – Clean Heat Generator
Ambition – The Rotaheater® is an innovative technology delivering inexpensive clean heat, by converting mechanical rotational energy (from wind or water turbines) to thermal energy, as heated fluids, with a high level of efficiency. This innovation displaces carbon emissions from combustion processes generally used to generate heat (e.g. boiler).
Market – The company expects a Rotaheater system to produce heat for 4-11p per kWh with zero carbon emissions, versus 19p/kWh for heat produced using electricity, and comparable to 5-6p/kWh for heat generated using mains gas, coal, ground source heat pumps and kerosene – all generating significant CO2 emissions. The technology is scalable from kW to MW.
Rotaheat has identified core markets as: 1) farms which are off the gas grid and adjacent to a river, harnessing hydro power to provide space heating for horticultural and animal rearing, and 2) wind turbine manufacturers, with Rotaheat providing a rural heat solution. The company’s extended market includes chemical plants (requiring 180+°C safe heat) and passenger vehicles (to generate heat whilst reducing battery drain).
Business model – Rotaheat foresees two approaches, selling either its product to heat system integrators and turbine manufacturers, or a B2B2C service enabling end-consumers to meet their need for heat, with a target payback of 4-8 years for Rotaheat.
What it’s achieved so far – The company has got patents granted in the UK, US and Europe, and pending in China and India. Its current model, the Rotaheater Pico, represents the fourth-generation design.
Team – Rotaheat’s CEO is Robert Thompson, ex-PwC partner, and its founder and CTO is Dr Andrew Tulloch, ex-Ploughshare Innovations CEO.
Fundraise – Raising £400k (EIS) to fund an independent performance verification and the product’s commercial launch as well as pay for patent filing fees; the company expects to raise another £1.3m during 2019.
Braendler Engineering – Infrastructure Inspection Processing Software
Ambition – Braendler Engineering is an established provider of software and data processing services, managing inspection images and data from the inspection of large scale infrastructure and high value assets such as wind turbines, power distribution networks and aviation. It transforms inspection images into actionable data, thanks to a combination of manual and machine learning technologies – enabling the companies operating these high value assets to optimise maintenance.
Market – The three markets that Braendler Engineering has identified where inspections are particularly necessary and valuable are wind power, power distribution networks and aviation. For example, the company estimates the data & software market for power distribution inspections at £6.6bn globally (of which £130m is in the UK).
Business model – Braendler Engineering operates a SaaS model, covering its real time software for data management and associated data management services. It generates revenues from initial customisation fees and then SaaS recurring revenues, with a gross margin of 60%.
What it’s achieved so far – Since 2014, Braendler Engineering has executed more than €3m of business with Siemens Gamesa Renewable Energy. In 2018, it has started a data processing trial with MHI Vestas Offshore Wind. In the power sector, the company has completed a POC with Nationalgrid and has partnered with PDG, a provider of helicopter-based inspection in the UK. Braendler has secured Innovate UK grant funding of £869k over the next three years.
Team – David Braendler is CEO and has run the company for the last 10 years. The team also includes Sheryl Adie (CFO), Vaida Andrisiune (Annotation Manager), Michael Walters (Product Owner), Chris Marchant (power industry expert) and Linda Braendler.
Exit – Braendler envisages an exit via a trade sale in 5-6 years.
Fundraise – Raising £150k.