The Carbon Trust is a private company set up by the UK government in response to the threat of climate change, to accelerate the transition to a low carbon economy. Rachael Nutter, Business Incubator Manager at the Carbon Trust, explains how its incubator programme is helping UK start-ups to attract investor funding
Just a couple of years ago, start-up company Lontra was what its Business Development Director called a ?technology project?. Today it is a thriving business. The company, which developed a novel engine and compressor design with the potential to deliver significant energy efficiency improvements and therefore lower carbon emissions, has gone from strength to strength since it took advantage of the support provided by the Carbon Trust?s incubator programme.
This support included business planning and revenue modelling as well as a detailed market assessment, all of which were essential to get Lontra ?investment-ready?. Since then, Imperial Innovations and NPI Ventures, a subsidiary of Japanese investment bank Nikki Cordial, have co-invested in Lontra, bringing the seed funding round to £400,000.
Launched in April 2004, the Carbon Trust incubator programme provides essential commercialisation support such as market analysis, business planning and mentoring for low carbon technology start-ups that are hoping to attract investor funding. Since its inception, it has supported more than 50 low carbon start-ups. Twenty graduates have already raised private investment worth more than £22m and three have listed on the Alternative Investment Market (AIM); three others have negotiated licence agreements.
Working with four incubator partners ? Angle Technology plc, Imperial Innovations Ltd, Isis Innovation Ltd and TTP plc ? the Carbon Trust helps companies to refine their proposition and business model before approaching investors or licencees; in some cases the incubators may help businesses to identify and engage key industrial partners or potential customers. To access the incubator?s technical and commercial expertise, each successful organisation is expected to demonstrate cost-effective, carbon-reducing business solutions that address a real business need.
The Carbon Trust incubators are currently supporting 16 technology companies with a view to achieving successful licensing opportunities or raising equity investment. Many more are in the pipeline. Such companies include Camfridge, which is developing energy efficient air conditioning and refrigeration products by using novel metal alloys and magnetic fields, and Ashe Morris, which has developed innovative heat exchanger technology that can help reduce the energy consumption of chemical reactions and improve yield and product quality.
One of the incubators? biggest success stories has been CMR Fuel Cells, a company that has developed fuel cell technology to deliver low-cost, long run-time power solutions for portable electronic products. The company has now listed on AIM, entered into a non-exclusive Joint Development Agreement with Samsung and the commercial application of the company?s technology is now in sight.
For the UK?s developers of low carbon technology that would like to see their ideas follow a similar route, the Carbon Trust incubator programme may provide a solution. But the selection process has challenging entrance criteria and businesses must demonstrate steady progress whilst in the incubator, meeting agreed milestones over time. The Carbon Trust and its incubator partners look for businesses with a combination of innovative, carbon-saving technology, real commercial potential and a strong and committed management team. The Carbon Trust?s Low Carbon Technology Assessment (LTCA) identifies those technologies that offer the greatest UK carbon saving potential in the short to medium term and also where Carbon Trust Investments can be material in bringing forward these technologies. Priority technologies range from biomass for local heat and electricity generation to technologies that improve efficiency in industry such as combustion, process control or process intensification technologies.
Because the Carbon Trust incubators operate a virtual network, any company across the UK needing strategic and commercialisation advice can take advantage of the services. Whether a startup or spin-out company, from either academia or a large company, the incubator programme provides a wide range of support from assessing and engaging the market, to securing IP rights, to understanding manufacturing options or to getting the right management team in place.
For more information on the Carbon Trust?s incubators programme, visit website: