Maven caught up with graphene technology water treatment business, G2O Water Technologies, who secured funding via NPIF Maven Equity Finance last year, to enable the company to forge more collaborative partnerships with industrial partners from its Manchester headquarters.
With an increasing need for high quality drinking water using affordable solutions in both industrialised nations and the developing world, G2O has identified a major opportunity to provide efficient and cost-effective solutions to a variety of filtration needs.
But how does a science technology business such as G2O utilise funding to scale up its patented technology and bring it to the market? How do you find the right funding partner or decide if you should grow organically?
In Maven’s latest guest blog, investee Craig Clement, Chief Operations Officer at G2O, talks through the company’s funding journey and how the finance has impacted the business.
I’m the COO at G2O and as one of the founding shareholders have been with the business since inception. My background is as a chartered accountant having been CFO of a number of businesses in the technology and construction industries. I’ve always been inspired by the challenge of starting a business particularly in such a large and dynamic market like the water industry and helping it grow and G2O is the perfect challenge! My role covers pretty much everything from finance, HR and IT to marketing, project management, business development and fund raising. You have to be prepared to be a bit of a generalist in start-up businesses and not be frightened to get involved in things outside your normal comfort zone.
At G2O we have taken a nanomaterial (graphene) and are applying it to existing water filtration membranes to significantly improve their performance – essentially reducing the cost of water filtration for which there is a pressing need driven by ever increasing energy costs and legislation in the water industry. We are not aware of anyone else focusing specifically on this opportunity however it is an intense area of research with University academics all around the world publishing papers on this topic every month.
I found our first investor in October 2016 – a high net worth individual who has a passion and background for chemistry – through our financial advisor. When it came to our second fund raising round in October 2018, we had proven our technology at small pilot scale but we were and still are pre-revenue. So, we were looking for a supportive investor who would back the management team through the next scale up commercialisation phase in what is essentially a relatively high risk but high return opportunity, to invest alongside further follow up funding from the management team and our initial backer. Maven and their NPIF fund were a perfect match – we meet the key NPIF investment criteria of being a growing company based in the North of England with an exciting innovative proposition and a large global market opportunity. Just as, if not more importantly, from a management team perspective we found the team at Maven easy to do business with and a good partner to work with and support us going forward.
We raised £1m in total in October 2018 and quickly put the capital to work investing in testing equipment and further technical staff. We now have 7 full time chemists together with a new CEO – an experienced material scientist in Andrew Wragg. This is in addition to the resources working to develop our technology in our various commercial collaborations.
The funding has enabled us to execute on several joint development collaborations where we plan to demonstrate our technology in commercial applications.
We would have started the investment process sooner – it always takes longer than you think. We did consider other investors, but in hindsight we would have trusted our gut feel in that Maven were the right match for us earlier in the process. There is a fine balance between price and getting the right investors in to back you for the long term.
If pace is important in bringing a new product or proposition to market, then you need to think about whether taking a delivery risk by delaying execution to fund organically. Also, in a business like ours you have to be prepared to view equity dilution as part of the process of creating value.
As a pre revenue technology business, investment was critical to survival so organic growth was not a realistic option for us. Maven has been very supportive and added credibility to our business. Their contacts, network, independent insight and challenge has also proved very helpful.
In the current economic environment, there is great uncertainty. There is not a lot of risk capital out there unless you come with a very strong case and a strong management team. Being able to pitch a business with a credible team is key. Certainly, from our point of view – when you are a pre revenue technology business you are not fishing in a big pond in the UK!
Our long-term goal is to develop the technology such that it becomes a must have for global membrane manufacturers who can then roll this out globally. We are focused on the technology and have no plans to build membrane manufacturing plants. Maven has provided the capital we need to do this and we look forward to delivering a fantastic investment return.
G2O also secured funding via the Finance Durham Fund to increase its Research & Development facilities at its North East Technology Park (NETPark)-based laboratory including the recruitment of additional scientists to expand its work with key industrial development partners, including the Centre for Process Innovation (CPI), to commercialise and roll out its innovative technology.
Author: Maven Equity Finance