innoventum:exclusivedesignstothosewhocanafford ... ·...
TRANSCRIPT
1
Contact | [email protected] | Dr. Sigvald Harryson | Founder and CEO Office Location | Turning Torso 275 | SE-‐211 15 Malmö | +46 732 50 49 81
InnoVentum: Exclusive designs to those who can afford – Affordable solutions to those who need InnoVentum’s Vision: In year 2020 InnoVentum is the globally leading brand for distributed carbon-‐capturing renewable energy solutions. Our mission is to make profit from the top of the pyramid and revenue from the rest.
InnoVentum’s Current Reality: In year 2014 – after four years of Research & Design and some initial sales, InnoVentum has developed more opportunities than the company can capture with its current resources. The largest installer of small-‐scale wind in Sweden, Egen El, recently bought and installed a Dali PowerTower at their largest exhibition area for small scale wind; A dozen purchasers from the UN are in contact with us for follow-‐ups from meetings in New York, Manila and Copenhagen; the first Dali PowerTower has arrived for installation in the Philippines and already triggered a refined proposal to the Philippines Disaster Recovery Foundation. A recent exhibition in Kunshan triggered significant interest among Chinese companies – mainly in the Giraffe; Proposals are in decision-‐making in Sweden, UK and Kenya. The Swedish Energy Authority and the Swedish Innovation Agency have decided on grants totaling more than three million SEK for certification of the Giraffe 2.0 and for commercialization of the Dalifant. The two grants require equal amounts of self-‐financing and it will require significant investments to scale up the lead-‐capturing resources of InnoVentum. Depending on how much growth funding InnoVentum can acquire, three quite different growth scenarios are outlined in this business plan.
InnoVentum’s Background: InnoVentum was established as a limited company on May 5th 2010 with the mission of giving Power to the People. Currently counting six employees: Morgan Widung, Ala Kazlova, Julien Daligault, Jacky Parkhouse, Peter Berthelsen och Lucas Gabrys. we make exclusive designs to those who can afford and affordable designs to those who need. In 2002, www.iknow-‐who.com was established to solve fundamental innovation challenges – often climate-‐related – by raising collaborative university competitions involving the global centers of academic excellence. 20 innovation challenges have been solved since then for clients like Porsche, Philips, DSM, Bombardier, Tetra Pak, Nestlé and AkzoNobel. The principle has always been the same: to establish Collaborative University Competitions in which leading university teams compete and collaborate to solve fundamental innovation challenges.
This unique approached reached publication in the Harvard Business Review in 2005 och Sigvald received his docent competence from Lund University in 2006 for inventing and successfully deploying this approach. The way in which it works is described in a two-‐minute video by Philips’ Global Head of Research & Alliances – Dr. John Bell:
http://iknow-‐who.com/innovation-‐in-‐mind-‐2012/
2
The same know-‐who based approach to R&D has been used by InnoVentum to co-‐create the breakthroughs that combine renewable materials and renewable energy technologies – the Dali PowerTower, roof-‐mounted wind with hybrid solar PV and the Giraffe:
Our Research & Design approach proactively engages leading researchers from centers of excellence like Lund University in Sweden and ENSTIB (Ecole National Supérieure des Technologies du Bois) in France. Until now, we have created one PCT (Global Patent Collaboration Treaty), 9 design protections and several trademarks, including that for Dali. The use of renewable materials makes our solutions CO2 negative and exceptionally silent. Modular design secures compact transport volumes and ease of installation. Our PCT is centered around mechanisms supporting tower erection without the use of a crane. Excellence in CAD-‐CAM makes mass-‐manufacturing possible anywhere in the world. Any wood engineering workshop using standard CNC (Computer Numeric Control) machines will be able to read our software for accurate computer-‐aided manufacturing of our
3
towers. All wood is from Sweden based on responsible forestry, and the renewable energy technologies and batteries deployed are sourced from leading European and American suppliers.
Profit from the Top of the Pyramid and Revenue from the Rest
We address both the top and the bottom of the pyramid – two quite differentiated segments – with a product portfolio using design and functionality for differentiation between:
1. Exclusive designs for those who can afford: Real estate companies, municipalities, owners of EVs and leisure homes without grid-‐access, commercial chains and ecological farms who all appreciate the exclusive design, exclusive renewable materials and the silent and reliable operation of our products;
2. Affordable designs for those who need: NGOs, disaster relief organizations and people who have no access to power today, who appreciate the resource-‐efficient structure of the PowerTower – as well as its high energy-‐density, transportability and speed of installation.
The exclusive design markets that we target include Sweden, Denmark, Germany, Norway, Japan, UK and Benelux. The Power to the People markets also include countries where access to electricity is poor due to disasters, such as the Philippines, which is where we start to apply our PowerTower. All our solutions optimize the use of renewable materials to carry renewable technologies (wind and solar) in hybrid combinations so as to get the flattest possible power curve – day and night, summer and winter. The USPs are equally appreciated by the exclusivity and affordability segments:
• Hybrid combination of wind and solar more than doubles the energy-‐density of our solutions – while providing a flat energy curve;
• The renewable materials used for all support structures make our solutions both CO2 negative and exceptionally silent;
4
• Using art and nature as inspiration for our design – leading to the Malmö Municipality Award for Sustainable Design
• Combining Technological-‐ and Social Innovation. One additional USP that is particularly strong for the Giraffe is its role as a social innovation in society. For example, Malmö City ordered a Giraffe to greet the thousands of visitors joining the Eurovision Song Contest – held in Malmö in May 2013:
The Giraffe was recently (March 2014) awarded with a 1.6 mio SEK grant from the Swedish Energy Authorities to support EU-‐certification of energy-‐production, noise-‐level and sustainability. In May 2014, the Swedish Agency for Innovation Research (VINNOVA) awarded InnoVentum with a larger grant to support the commercialization of our largest solution – the Dalifant. The noise-‐absorbing design brings all our products to public places and rooftops – one even being on top of a library with a maximum noise-‐level of 37 DbA. (http://www.innoventum.se/dali-‐performance/nggallery/slideshow)
Combining Wind and Solar PV to Get a Flat Power Curve
One major drawback with pure wind energy is that it does not always give power. Solar power is even less regular in power generation as it cuts every night and is low in the winter. The diagram below presents our hybrid solution – with an almost flat energy curve. The main reason is that wind power provides much more energy during the dark and cold parts of the year – both due to higher wind speeds and higher air density:
5
In short, we bring renewable energy solutions to new levels and new arenas by offering new combinations that bring new user benefits in terms of power continuity, esthetics, acoustics, modularity and sustainability. Combined, our exclusivity and affordability products attract a wide range of segments:
1. Power to the Public Institutions: Green Municipalities, Parks, Universities, Schools, Daycare Centers, Marinas/Leisure Harbors, Public Arenas and Sport Centers, including Golf Clubs.
2. Power to the Commercials: Supermarkets, Shopping Malls, Restaurant Chains, Do It Yourself/Home Improvement Chains, Real Estate Companies for public, commercial and private tenants.
3. Power to the EVs: Using the Giraffe or the PowerTower as charging station for Electric Vehicles – both at public parking facilities, along roads as visual green charging spots and as home installations for private EV owners. After a slow start with California and Norway as the early adopters, the EV segment is now growing fast in several geographies.
4. Power to the Ongrid People: Decentralized power generation at micro-‐level is becoming increasingly popular – especially in countries with high electricity prices and/or Feed In Tariffs (FIT). In Denmark and Germany, the consumer price of electricity is three times higher than in Sweden. In Japan, the FIT is 60 Eurocent per kWh, which is highest in the world and more than 10 times higher than in Sweden. This is the main-‐segment for the Dalifant, which has an ideal energy output for farms. We see a particularly big interest from ecological farms, which are growing in numbers both in Sweden and beyond.
5. Power to the Offgrid People: Summer houses and cottages on islands, in mountains or simply in areas where there is no grid. Norway alone has more than 200.000 houses with no access to the grid. Globally, this is a very large segment going from the top to the bottom of the pyramid with 1.4 billion people lacking access to electricity. In this sense, this segment both addresses B2C in wealthy countries and B2B through NGOs addressing the bottom of the pyramid. Based on recent meetings in New York, Manila and Copenhagen, we have follow-‐ups with a dozen of UN purchasing managers (http://www.innoventum.se/united-‐nations-‐procurement-‐seminar-‐2014/).
Segmentation & Sales Strategy
We can cover all five segments listed above, because the first four segments all need the same product portfolio, and the fifth segment uses the same tower structure – the PowerTower – but adds a battery back for offgrid use. Although offgrid products are mainly needed in emerging markets with poor public grid, we also see a need for off-‐grid products among exclusivity buyers in premium markets such as Norway.
We will devote our direct sales efforts through growing teams addressing B2B customers in Sweden, Denmark, Norway, Germany, the UK and France. We will also build a platform for online sales capturing B2C opportunities in these and neighboring markets.
Japan is a particularly interesting market – both with respect to its need for renewable energy and the passion for wood. The leading magazine for landscape architects in Japan, Landscape Design, has
6
already published several articles on InnoVentum, and Japan is our fourth largest population in terms of website visitors:
http://www.innoventum.se/wp-‐content/uploads/2012/05/Landscape_Design_Article2-‐Cropped.pdf
A dozen potential distributors from Japan have approached us and three have been confirmed through distributor agreements.
Sweden is our lead-‐market and marketing platform for other markets to follow. Even the Power to the Offgrid People segment started through a B2B collaboration in Sweden. Together with the Children’s Mission, we are bringing offgrid PowerTowers to the Philippines. Read more on this at http://barnmissionen.se/blog/vindkraftverk-‐till-‐filippinerna/
As already mentioned, 1.4 billion people are lacking access to electricity. We have started relationship-‐building and match-‐making efforts towards the United Nations, who happen to have their global logistics center in the Malmö-‐Copenhagen Harbor – just like we do. It takes significant time to qualify for business with the UN and other large NGOs, but the rewards will be significant too. The first Philippines pilot with the Children’s Mission is crucial in opening further doors into the UN and other aid organizations. Since we started to provide updates on the Power to the Philippines project on Facebook some two months ago, we acquired more followers in those two months than in the first two years of InnoVentum’s Facebook history. As a next step in our digital presence, we also run a crowdfunding project with Indiegogo: https://www.indiegogo.com/projects/power-‐to-‐the-‐philippines
Outlining three Different Growth Scenarios
How will InnoVentum be able to capture all the growth opportunities? Clearly, the number of opportunities outnumbers the small InnoVentum Team. Rather than projecting one clear revenue figure for the future, three different growth scenarios are outlined – based on different premises:
1. Aggressive Growth Scenario Based on Investments of 9 million SEK in 2014 and 18 million SEK in 2015
2. Medium Growth Scenario Based on Investments of 6 million SEK in 2014 and 9 million SEK in 2015
3. Self-‐Driven Growth Scenario Based on Failure to Attract Growth Investments.
Each of these three scenarios is described in terms of:
• Revenues Generated and Costs Incurred (Cash-‐In and Cash-‐Out) for 2014, 2015 and 2016 • Projected Cashflow Balance for the same Timeperiod • Assumptions that Need to be Fulfilled to make the Scenario Realistic • Total Revenues for the Business Year 2016 Split by Products and Markets.
The same logic and order follows for all three scenarios, after which some more detail is provided in terms of how the growth investments will be spent.
7
1: Aggressive Growth Scenario based on Investments of 9 mio SEK in 2014 and 18 mio SEK in 2015:
Assumptions for the Aggressive Growth Investments Scenario:
• Energy prices remain high in core markets such as Denmark and Germany and double in Sweden by 2016 – to almost reach international prices making own renewable energy solutions profitable even in Sweden with ROIs far below 10 years and yet shorter in other core markets.
• B2B sales to several major corporate customers and commercial chains (such as IKEA, ICA Maxi, Scandic Hotels, Choice Hotels, MAX, Carrefour) supporting mass installations of InnoVentum products in multiple markets.
• Commercialization collaboration with Business-‐Sweden for immediate (2014) support in core markets with InnoVentum representation in tandem (SE, DK, DE, NO, FR-‐UK) and for establishment of rep offices in the markets where InnoVentum is not present otherwise (see separate Business-‐Sweden map later on in this document).
• Existing product portfolio provides good sales and good licensing revenues. New products – such as the Giraffe 2.0 – take us into some exclusivity markets. The exclusivity markets are partly acquired in collaboration with Business-‐Sweden representing us in most exclusive and design-‐minded centers across the Globe (see separate map).
8
• Our platform for e-‐commerce supported by proactive digital marketing generates significant sales in several markets. This strengthens our economies of scale for enhanced gross margins.
• Core processes (such as Lead Developer and supply chain management) are also web-‐supported. • Growth of the electric vehicle market in countries like NO, DK, Benelux, FR, DE, CH and even SE
raises the need for electricity in general and visibly green EV charging stations in particular. • Partnerships with several players in EVs, that market and distribute the Giraffe in bundled offers.
Target companies: Tesla, VW, Renault, Nissan, Volvo, BMW, NEWS, Mitsubishi, BYD, Mercedes. • Alliance with Google/Huawei/LG/Ericsson to make PowerTowers for disaster relief purposes
equipped with HotSpots and to market the PowerTower also as a telecom power product. • Good business relationships with at least three Agencies and/or Bodies within the UN (e.g.,
UNICEF, UNDP, UNEP, UNOPS, UNHCR, UNHRD, UN/PD, WHO). • Good business relationships with at least three other NGOs (e.g., Barnmissionen, SIDA, Red
Cross, Save the Children, IOM , WFP, Erikshjälpen). • Power to the Philippines project is successful and leads to cooperation with several disaster
relief/rebuilding the Philippines financiers also beyond Sweden (ADB, IFC, World Bank, Ayala Foundation, SM Foundation, Philippines Disaster Relief Foundation).
• Good partnerships with key organizations such as the Carbon War Room, GreenCharge, Wind for Prosperity and Clean Air Asia.
• InnoVentum gradually becomes successful in crowdfunding efforts for good cause projects that contribute to revenue and economies of scale.
Most organizations mentioned above are in initial or progressed contact-‐phase. The current Team of 6 FTEs is obviously far from sufficient to address and capture all the opportunities. With Growth Investments of 9 mio SEK in 2014 and 18 mio SEK in 2015, we will reach sales amounting to 620 mio SEK in total in 2016, of the following products in the following markets:
All figures are in SEK Business Sweden collaboration in country markets, where InnoVentum is not established
9
2: Medium Growth Scenario based on Investments of 6 mio SEK in 2014 and 9 mio SEK in 2015
Assumptions for the Medium Growth Investment Scenario:
• Energy prices rise by 50 % by 2016 in a few of our target-‐markets • Renewable energy is supported and partly subsidized in our markets of interest • InnoVentum develops a platform for e-‐commerce that generates sales in some of the core
markets • Partnership with at least one major player in the electric vehicle industry, that markets and
distributes the Giraffe 2.0 as a bundled offer • The Power to the Philippines project is reasonably successful and leads to collaboration with one
disaster relief organization (eg, ADB, Ayala Foundation, SM Foundation, PDRF) • Good partnerships with a few key organizations such as Lantmännen in Sweden and the Carbon
War Room and Clean Air Asia internationally • Existing product portfolio generates sales and also gives some limited license revenue (eg, China)
10
• Commercialization collaboration with Business-‐Sweden contributes to sales volume in the markets where InnoVentum is established.
All assumptions above are based on concrete ongoing business development activities. There are no reasons that this scenario should not be reached – with investments of 6 mio SEK in 2014 and 9 mio SEK in 2015. This would mean sales amounting to 250 mio SEK in total in 2016, of the following products in the following markets:
3: Self-‐Driven Growth Scenario Based on Failure to Attract Growth Investments
All figures are in SEK
11
Assumptions for the No Growth Investments Scenario:
• InnoVentum fails to attract any growth investment. • Energy prices remain extremely low in Sweden (currently, 2014, we have 50% lower electricity
prices than in 2010) and stable in other markets. Own renewable energy does not pay off in Sweden and therefore our local growth is limited.
• Oil prices remain stable so that the diesel generated electricity costs about 3 SEK per kWh • Fossil fuels lobby ensures that electric vehicle industry does not boom. • Low or no subsidies for renewable energy in the markets of interest. • No commercialization collaboration with Business-‐Sweden. • No business development with the UN.
In this scenario, InnoVentum gets no leverage on R&D, which results in poor profits and thus scarce resources for self-‐funded growth. Some positive developments happen, however, even with no external growth financing:
• A distribution partner is identified in Norway for sales of the off-‐grid PowerTower to Hytte owners and for sales of Giraffe 2.0 as charging station for EVs
• Continued funding for Research & Design from VINNOVA and the certification from the Swedish Energy Agency.
• InnoVentum remains interesting to the media and our online presence increases, which gradually increases our brand equity.
• The Power to the Philippines project triggers some business development with Swedish disaster relief organizations (accounted for under Sweden in the table below).
This would mean sales amounting to 65 mio SEK in total in 2016, of the following products in the following markets:
12
Commercialization Collaboration with Business Sweden
The first two scenarios will devote part of the growth investments to drive a commercialization collaboration with Business-‐Sweden. The criteria for office-‐selection are outlined below, and a basic business-‐model has been identified to operationalize this collaboration.
All organizations and activities mentioned in the first two scenarios have been reached already. To move from creating to capturing these opportunities obviously requires more resources, which is why the outcomes of the two scenarios are linearly related to the growth capital that is injected. We are performing a funnel-‐based approach – addressing 20 offices with initial market-‐potential related questions, following up with the most attractive markets for lead-‐creation and finally selecting the
All figures are in SEK
13
most promising offices for lead-‐capturing. The offices addressed are listed below. The number of companies maintained after filtering will depend on our resources available.
Investments into Salesforce, IT Platforms and IP Expansion
In order to reach the aggressive business-‐target by end of fiscal year 2016, we seek investments in two rounds: 9 million SEK during 2014 and another 18 million SEK in 2015. With this, we count on expanding to 30 employees by end of 2015 and to 60 employees by end of 2016. Most new employees will be devoted to sales and project execution. We will also strengthen our digital marketing resources in the core languages required and build IT platforms to support:
• Our online wind-‐check app to work also for hybrid solutions and core markets beyond Sweden • Online performance monitoring – allowing both for customers and us to have full control • Online sales for DIY products, including CRM and supply-‐chain coordination • Additional social media communication and crowdfunding.
We will also widen the geographical scope of our patents, designs and trademark protections. The items that will absorb the investments are listed in the chart below.
The figures in this chart assume the aggressive growth scenario. Should the medium growth scenario be the one that is offered based on lower investment levels, the figures in the table will be reduced by 50%. In other words, the proportions of focal investment areas will remain very similar:
14
Value Creation and Exit Strategy:
The emission for 2014 is targeting 9 million SEK for 15% of the company. In 2015, another 18 million SEK will be acquired in investments for 15% of the company. The exit strategy is to make an IPO by the end of 2016. SE Banken Venture Capital indicates a pre-‐IPO value of 1.2 billion SEK (€132 million) when InnoVentum reaches revenues of 600 million SEK with a gross margin of 60%. Should InnoVentum only reach 250 million SEK sales by end of 2016, the value creation for investors joining this emission round will be reduced from factor 20 to factor 8, but this eight-‐folding will still be achieved within less than three years.
The graph on the left shows the value creation from company creation through IP and commercial installations. The graph on the right shows the three emissions performed in black figures and the two forthcoming emissions as well as the planned IPO in green figures:
The main-‐reasons and key-‐enablers of these business results are listed on the next page:
• Positive Business Development Trend: Since we brought our first sales person on-‐board in March 2013, we did more sales in nine months than during the first three years. The business-‐development figures in thousands of SEK are: 2011: 26; 2012: 426; 2013: 1389.
15
• Expanding Distribution: We are being approached on a weekly basis by companies wishing to become our agents, distributors or installers. So far, we have signed six distributor agreements.
• Web-‐Logics: For every year so far, the numbers of unique web-‐visitors and followers on Facebook have doubled – and the growth-‐pace is still increasing. We will capture the viral potential through online sales and crowdfunding platforms.
• Visibility: Our spectacular installations at the Eurovision site in Hyllie, the EV charging Giraffe in the West Harbor of Malmö and the rooftop installation on Blekinge Technical University attract a stream of leads as many people see them and are attracted to know more. In terms of lead-‐capturing, we focus on high-‐visibility-‐installations.
• Power to the Offgrid People: One segment counting 1.4 billion people deserves attention both in terms of sales and communication. We have experienced very positive reactions from our Power to the Philippines initiative and see viral potential in this type of projects.
• Financial Solutions: Starting in Sweden, we have Swedbank as partner offering attractive financing solutions to our customers, who get lower monthly fees than the energy savings – making the investment in our solution cash-‐flow positive.
• Security: Through a partnership with a large Swedish insurance company, our customers are offered attractive insurance solutions both against damage and business interruption.
• Fame and Institutional Support: 2014 has started very well in February with InnoVentum winning the Malmö Business Award for Sustainable Development and Design. In March, we were awarded 1.6 million SEK by the Swedish Energy Authority for EU certification of the Giraffe and in April, VINNOVA (the governmental agency for innovation-‐support) recommended InnoVentum for a somewhat larger grant to support the commercialization of the Dalifant.
Current Co-‐Owners/Investors: Name Complementarity of Owners & Investors
1. Sigvald Harryson Founder and Global Alliance Manager
2. Henrik Hildebrand Legal Compliance Expert
3. Mohsen Djalali Senior Executive within Tetra Pak
4. Mark Pilgerman Operations and Germany-‐expansion
5. Ewa Dudkowska Baltic Market Expansion
6. Niklas Åkerman Product Management
7. Martin Ertl Chief Innovation Officer, Bombardier
8. Percy Petersson Advisor in IP 9. Kaj Kangeman Marketing & Sales in Stockholm
10. Rafal Dudkowski Strategic Planning & Business Development
11. Bettina Ullman Marketing & Sales in Austria
12. Julien Daligault Product Management and Installations
13. Ala Kazlova IP Management, Digital Marketing and UN Sales
16
14. Stefan Sjöblom CEO of Delta Energy Systems, Scandinavia
15. Nils Bohlin Founder of Arthur D. Little Scandinavia 16. Yang HAN Business Development in China 17. Christoph Appert R&D Management and IP protection 18. Danuta Sikorska Business Development in Telecom 19. Olof Sjögren Business Development in West-‐Sweden 20. Mats Kemi Business Development in North-‐Sweden 21. Morgan Widung Our New Head of Sales 22. Manne Widung Design and Business Development in Åland 23. Jim Håkansson & Charlotta
Grahn Head of R&D of Nolato, Material Expert 24. Alexander Stern PhD in Crowdsourcing of Innovation 25. Dan Olsson CEO of Swedish Healthcare company 26. Per Nilsson Managing Partner, Roland Berger
27. Tord Wingren Former MD of Samsung Electronics, Chairman of TAT, CEO of Ericsson Mobile Platforms
28. Leon Montell Former Partner of ADL, MD of Montell & Partner 29. Lucas Gabrys Head of Wood Engineering
While we are humbly accepting the tough competition for growth capital, we are all fully committed to making the aggressive growth a reality for all stakeholders: The Planet & the People who get Green Power; the Investors & Co-‐Owners; the Employees.
We welcome additional investors who have complementary networks and share our ambition to make a positive sustainable difference for the benefit of future generations. Please contact [email protected] to pursue your investment in a green future with unlimited growth potential.
Follow us on Facebook learn more about us on YouTube:
• Let’s Reverse the Trend: http://www.youtube.com/watch?v=kUa7dFa7-ek • Let’s Change the Source: http://www.youtube.com/watch?v=XJsDDy-Ut4s • Let’s Change the Material: http://www.youtube.com/watch?v=1OAB33Zos5Y