- Canada’s cleantech sector is successful because of our experienced entrepreneur class, strong talent base and access to capital.
- Canadian cleantech companies rely on international markets to access capital as well as early adoption consumers.
- Canadian agencies designed to support cleantech companies and the ecosystem are now investing more funds into assisting companies through scale-up and commercialization, rather than focusing on R&D.
Canadian cleantech companies need more sophisticated management in the finance, marketing, sales and product management areas in order to scale up and commercialize. They also require greater local pull from more Canadian early-adopters of their technology.
How is Axine disrupting wastewater treatment?
Axine addresses the problem of treating industrial wastewater that is contaminated with some of the most difficult to treat toxic organic chemicals. These chemicals do not break down and biodegrade in the environment. So, the wastewater often has to be trucked offsite – sometimes hundreds or thousands of miles – to a location where it is either pumped underground into a deep injection well or incinerated using natural gas.
Axine has developed a technology based on electrochemistry through which we can treat this wastewater without using any chemicals and without producing any waste byproduct. We can treat the water onsite, so it can either be reused or recycled back into the manufacturing plant, or be safely discharged. Moreover, this entire process is cheaper than conventional approaches. So we can provide our customers with immediate savings, enable them to reuse their water, eliminate trucking bottlenecks, streamline and automate operations, as well as reduce the risks and liabilities of shipping toxic water off site.
“While Canadian entrepreneurs are getting stronger, we need experienced management, particularly in the commercial disciplines such as sales, product management, marketing and finance.”
Instead of selling the technology, we sell it as ‘wastewater-as-a-service’. So we own and operate our plants on customer sites and treat the water for them under a service contract. Customers do not have to take any technology risk or deploy any capital. They can focus on their core business and allow us to treat their water. The market reception to our technology and service model has been phenomenal and we are just in the early scale-up and growth stage. We are focusing predominantly on the US first and we will consider international expansion later in 2018. Most of our customers are multinationals and they have operations in the US. But we are now developing a sales pipeline in Canada as well. It is just a smaller market, but there are certainly some fantastic applications of our technology in Canada.
How competitive is Canada in the global cleantech market, which represents a multi-trillion dollar opportunity?
Canada has an entrepreneur class that has performed exceptionally. Some entrepreneurs have been through the cycle of building companies more than once. So a lot more experience has accumulated in the Canadian cleantech space over the last few years even though it is a relatively new sector. Moreover, Canada has an incredible talent base. It has some of the best engineering schools in the world, fantastic domestic talent and a great pool of experienced and talented immigrants. Canadian cleantech companies also have better access to capital than in the past. Canadian tech companies are gaining a strong reputation amongst investors worldwide, and our solutions are becoming more embedded in the market internationally.
“The government plays an important role in helping to create an ecosystem, and stimulate and direct capital in areas where it can have an impact. However, it cannot magically solve all of cleantech’s challenges.”
In the last few years, Canada has emerged with a next generation of clean technologies that offer customers a solid economic and environmental value proposition. Globally, and certainly in Canada, today’s cleantech solutions are not just greener, they’re much better than incumbent solutions. Across the board, Canadian companies have come up with amazing solutions, whether they are grid solutions, energy management technologies, carbon reduction solutions, water technologies, or emerging areas like precision farming. However, we need to focus on scaling up some of these smaller Canadian companies to become big global brand names.
Why is it so challenging to build a cleantech ecosystem in Canada that funds ventures through “the valley of death” ahead of their scale-up phase?
The government plays an important role in helping to create an ecosystem, and stimulate and direct capital in areas where it can have an impact. However, it cannot magically solve all of cleantech’s challenges.
“Canadian development agencies are putting a lot more capital in scale up, early commercialization and debt instruments, as opposed to simply focusing on R&D. Overall, the cleantech ecosystem is changing in the right direction.”
The challenge of scaling-up comes down to the caliber of our management class. While Canadian entrepreneurs are getting stronger, we need a lot more experienced management, particularly in the commercial disciplines such as sales, product management, marketing and finance. More sophistication is required in decision making around manufacturing, setting up a service organization, organizing the supply chain and growing a sales team. In British Columbia, we formed a group of CEOs of companies that are beginning to scale up. Peer-to-peer mentorship to transfer knowledge and experience in resolving scale-up issues has been extremely helpful. The federal government has heard our scale-up message and it is also starting to help direct capital. BDC, EDC and some regional development agencies are putting a lot more capital in scale up, early commercialization and debt instruments, as opposed to simply focusing on R&D. Overall, the cleantech ecosystem is changing in the right direction.
How are Canadian companies integrating into the global cleantech market?
Technology companies are always thinking about international markets in a number of different ways. First of all, many companies have a supply chain that stretches around the world. Although Axine is still relatively small, our supply chain stretches across the US, Asia and Europe. Secondly, capital in cleantech increasingly comes from global players, whether it is family offices, traditional venture capital firms or multinational investors like Shell, Suncor or BASF. In addition, Asian multinationals and venture funds are playing an increasingly important role in providing capital and market access expertise. So, most of the capital for cleantech is outside Canada and it is really important for companies to tap into that in order to find investors. Thirdly, cleantech companies find customers abroad. It is great to have the US right next to us because it is a large early adopter market. If a company can be successful in the US, it is a great launching pad for other international markets. Canada is a relatively small and slow adoption market for new clean technologies. So when Canadian cleantech companies are developing new technologies, it’s imperative that they think global from day one and they will often have to go to international markets in order to find early adopters. Other markets, particularly the US, are just much faster at adopting and taking the risk to work with new technologies that can completely disrupt the value chain. While the size and speed of our domestic market is an impediment, Canadian technology entrepreneurs are used to being nimble in international markets.
“Canada is a relatively small and slow adoption market for new clean technologies. So when Canadian cleantech companies are developing new technologies, it’s imperative that they think global from day one and they will often have to go to international markets in order to find early adopters.”
In a previous talk, you said that you wanted to see the creation of a sustainable energy hub in Western Canada, combining BC’s technological edge with Alberta’s oil and gas expertise. What progress has been made in this respect?
As a BC cleantech sector, we formed a partnership with Suncor and Cenovus, two of the largest Canadian oil companies in Alberta. A new venture fund called Evok Innovations has resulted from that partnership. Cenovus and Suncor both invested $50 million in the venture, the mandate of which is to find clean technologies that can improve the cost and performance of the Western Canadian oil and gas industry. We hired an exceptionally talented CEO from the Bay Area in San Francisco and Evok has made a number of promising investments around the world. Those technologies are being adopted, piloted and demonstrated in the oil and gas industry in Alberta.