ECOSUMMIT - Accelerating smart green startups - Investing in … · 2014. 11. 13. · concept technology into a high-growth, investable company. Stage 1 Startup Stage 3 Follow On

©2014 EcoMachines Incubator Ltd. All rights reserved

Investing in advanced engineering

start-ups: avoiding the bear

ILIAN ILIEV

CEO, EcoMachines Incubator

8th October 2014 EcoSummit, London


Focused on startups in advanced engineering

and high-value manufacturing

A hybrid business model:

a seed Accelerator + early-stage VC fund

About EcoMachines Incubator

Accelerator programmeincludes equity finance, mentorship, and other

services


Power Generation Transport Water

Energy Efficiency Materials Smart City

Sectors of Interest

Waste

Industrials


Accelerator Programme

We help entrepreneurs transform their businesses from a startup with a proof-of-

concept technology into a high-growth, investable company.

Stage 1

Startup

Stage 3

Follow On

Result

Our 9-month one-on-one Accelerator programme is specifically designed for hardware &

advanced engineering startups.


Our London location enables access to world leading universities,

investors, corporate HQs, trade exhibitions, industry experts...

...proximity to other UK high-tech cluster...

...connectivity to EU, US and key emerging economies

Operating out of Central London...


EcoMachines Team

Management Team

Advisory Board

Chris NiehausEx-head of Industrials at UBS


Accele

rato

r Mento

rs

EcoMachines Team


EcoMachines Portfolio

Since early 2013 we have backed the following companies:


Why are we bullish on the opportunities in

energy & cleantech?

Source: http://www.ritholtz.com/blog/wp-content/uploads/2009/07/cartoon-spin-bull-vs-bear.jpg


VC in energy and cleantech: is the model keeping up?

The VC environment has been broadly

positive in the last few years

...while cleantech investment has

moved in the opposite direction


...yet within sub-sectors, investment trends differ

Source: Cleantech Group i3 database


Why are we bullish about hardware in

energy and cleantech?

• The ‘bubble’ in Cleantech has already burst – look elsewhere for bubble conditions

• Move towards specific, real solutions for mature industrial sectors – with real bottom-line benefits to specific users/clients

• Much easier to have investment discussions firmly focused on real world outcomes – where real cash flows come from

Bubble inoculation?

• Improved CAD design & simulation, 3D printing/rapid prototyping, and more executive experience can lead to leaner, faster start-ups

• Impact is lower capex and faster time-to-market

Lean hardware start-ups?

• Opportunities for energy/cleantech application areas from well-developed platform technologies in materials science, robotics, IoT hardware

• The application of these to industrial problems can lead to significant value release/capture – and novel business models

Horizontal technologies

impact?


The EcoMachines approach 2

What is the Lean Startup method ?The Lean Startup approach of ‘validated learning’ and iterative product releases has been

tremendously influential as an entrepreneurial approach for Web/software companies...

....Which has seen the bulk of VC investment in recent years...

...So hardware companies should be curious!

Key elements of Lean Startup : • Minimum Viable Product

• Continuous deployment

• Split testing

• Actionable metrics

• Pivot


The EcoMachines approach 2

Lean Startup – key elements

Hardware implications Solutions

Minimum Viable Product It takes more investment and time to build an MVP for hardware

•Virtual prototyping•Rapid prototyping & additive manufacturing•Scenario testing with clients•Industry partnerships•Low-cost prototyping

Continuous deployment It takes more time and ££ to do iterations on hardware prototypes

Split testing Its more expensive to build hardware prototypes

Actionable metrics Different type of metrics for hardware and B2B

Use deep sector expertise to identify relevant metrics

Pivot More expensive Do market-product fit testing earlier on

But... Is Lean Startup appropriate for Hardware?


Some lessons…

The promise: if you get it right, investments in ‘hardware’ businesses can be

highly scalable at relatively low capex, and can ‘plug-in’ into existing industrial

infrastructure (metallurgy, oil&gas, automotive, water…)

Promising companies:

• Hyperfocused on a specific easy to reach market applications

• Close to an MVP

• Ability to articulate pivots on current business model

• Deliver real and significant benefits to a real client… at the same or lower price

• Team with experience specific to the market application

• Find the low-capex model for growing the business

• Investors with relevant experience

• Business model supporting early cash flows


What we want to avoid in start-ups!

Ilian Iliev (CEO)London, United Kingdom (m) +44 77863 73965(e) [email protected]

Contact UsTo find out more about EcoMachines Incubator,

please contact us.

ECOMACHINES INCUBATOR LTD.Rainmaking Loft, International House, 1 St Katharine’s Way, London, E1W 1UN, United Kingdom

www.ecomachinesincubator.com @EcoMachinesUK

Documents

ECOSUMMIT - Accelerating smart green startups - Investing in … · 2014. 11. 13. · concept technology into a high-growth, investable company. Stage 1 Startup Stage 3 Follow On