Rapid Innovation Group Portfolio On Track to Raise More than £15m

A recent survey of our portfolio of companies showed that, at the end of the third quarter, companies we are working with are on track to raise more than £15 million from equity, debt, and grant instruments.

Credible evidence of commercialisation activities and its early success is critical to attracting capital from any source – funders need to be able to justify their decisions and deliver engaging narratives to their investors.

In 2018 Rapid Innovation Group has worked closely with a number of its companies to raise capital from grant sources – we are finding an increasing volume of both government and private grant capital is chasing a static / slow growing volume of truly revolutionary companies, making this non-dilutive source of funds a particularly exciting seam to tap into.

Rapid Innovation Group Partner Founds Distributed Ledger Business

David Gates, partner at Rapid Innovation Group, has today founded a distributed ledger company to work on developing technology and practices to support the implementation of this exciting technology into chain of custody businesses.

David’s work will be part funded by Innovate UK, the UK Government’s innovation funding agency, as well as an equity investment from a private company which is seeking to find a reliable vendor for this type of technology. The company is trading as Saffron Traceability, as is currently seeking chain of custody and traceability businesses that wish to explore this exciting new domain.

What is IP? And how to best leverage it?

We at Rapid Innovation Group are in the business of IP commercialisation. When we disaggregate that term, the most debate within the company, and a healthy debate it is I must add, is what does the term commercialisation mean. Is it sales and revenue generation at its most basic, or is it something far more fundamental than that? That’s a topic for another time and for someone with a little more nuance than me to tackle within our firm.

Instead I thought I’d write about what we mean when we talk about IP. Historically at Rapid Innovation, IP has been about the strength of the patent portfolio which we felt automatically granted a certain form of defensibility to our clients. However recently, I’ve been involved in a few engagements where what constitutes IP has had a rather more murky definition which has led to a more evolved position on IP in my thinking:

  1. One of our clients is doing a series A fundraise at the moment. They have a significant breakthrough in combustion technology and their business model is to develop and integrate it with large industrial collaborators, with the view to licensing to generate long-term revenue streams. One of the investors who is currently investigating them invests purely on the strength of the IP position. Our client has 7 patents across multiple patent families. Nevertheless, and despite NDAs, our client has not yet got to the stage of sharing their detailed designs because that is where their real technological differentiation lies. So where is their IP? In the patents, or in the design which is only briefly alluded to in the patents?
  2. Another client has licensed their IP to a company that has built large industrial plants using their technology. The core patent has expired but the license persists – both parties know, and will freely admit, that while much of the core technology is in the public domain, it is the secret knowhow and process knowledge that allows the licensee to profitably run the plant. How do you quantify that know-how? How do you protect it? How do you price it? Either way, their defensibility lies in that secret know-how. That plant cannot be run profitably without their process knowledge and know-how.
  3. A third client has a space heritage but like in the previous case, the core patent for their technology has expired. As such they have developed some process, and application patents. Fundamentally though, they do not have IP that protects the application, only their unique efficacy. What they do have is an emerging market with a clear need, a defined way that the market will adopt the technology, and a better product / design than their competitors. As such, their strategy is very much focused on selling this to as many customers as quickly as possible, and to find the right manufacturing model that will protect their design. Their defensibility lies in their commercialisation strategy, and their speed to market which is something that smaller, more agile companies are well suited to. They are very much a “deep-tech” company but are they an IP company – I don’t know and quite frankly don’t care as long as we have a product and a strategy that will fundamentally build market defensibility and long-term growth.

These are just a few examples of the extent of the diversity of challenges that have to be overcome “IP companies”, and while this is very generic, and fails to take into account several other hugely important contextual factors, it does provide a starter for six.

If you’ve got secret know-how and no one can reverse engineer your product / process when they get their hands on the product, then manufacture. This has two benefits as 1) it minimises IP leakage and 2) Allows you to price at the level you want as your customer has no way of knowing how it is you manufactured the technology and so is more willing to pay on the value of the problem being solved as opposed to imposing a cost plus model on you. Conversely, you shouldn’t dream of licensing in this scenario as you leave yourself open to your secret knowhow getting into the public domain and run the risk of your licence being compromised. Alternatively, if you’ve got a strong patent position, then license away as it’s pretty easy to see if someone is infringing on the patent.

Chester Karass said, in business as in life, you don’t get what you deserve, you get what you negotiate. The IP corollary is that your IP is only as strong as your wherewithal to protect it. Which for early stage companies with limited financial and even fewer legal resources is not very high. That’s why I’m a firm believer in the best piece of IP advice anyone ever gave me – keep secret what you can keep secret (and manufacture if no one can reverse engineer it) and patent what you can’t!

 

 

 

Summer internship: the first week

It feels like yesterday I was searching for internships for summer. I wonder what it was that captivated me about Rapid Innovation Group- perhaps it was the use of “entrepreneurial” in requirements. Knowing me, it was probably “keen sense of humour”. Both haven proven to be true of the working atmosphere.

It’s the beginning of day 5 at the office and here I am, writing a blog about my first week here. Truthfully, it already feels as if I’ve been here much longer than that. Upon reflection, I’ve realised just how comfortable I’ve felt in the office; there was no “settling in” period- completely contrasting with my experience of living in London for the first time, where I think my settling in period may last indefinitely!

Since day 1, I’ve been completely integrated into the team. Peter spent a couple of hours giving me an overview of the work Rapid Innovation Group does and introducing me to an Agtech company I’ll be working on with him. Immediately, I was invited into meeting calls. On meeting calls this week, I must admit I’ve been happily surprised when referred to as a “colleague”, not simply an intern. This week I’ve mostly done market validation work in the agricultural sector: it turns out that a love of mine, spinach, may not be so good for you after all as it’s especially prone to absorbing carcinogenic heavy metals from the soil. Bad news for salad lovers out there.

However, alongside this I’ve experienced a very steep learning curve and an ever-increasing workload. On my first day, it felt like I was learning a completely new language: acronyms, business-style talk and the specific vocabulary of the sector I was working in. This is where I feel I fit in well to the small-business entrepreneurial culture: whereas plenty of people would feel intimidated or overwhelmed by this, I’m finding the challenge thrilling. The ambitious and driven side of my personality has been fully grasped by working here. What is very interesting and unique about Rapid Innovation Group is that, in a team of generalists, each person will also develop a detailed knowledge of a specific industry for a client not afar from expert level. We must learn to adapt very quickly to new situations. With my next task being market validation of the baby food global market, perhaps I will be the office expert on baby food. Not quite as exciting as renewable energy solutions, but important.

Studying Biochemistry at university gave me a good background for the AgTech/ Biotech work, however when Simon introduced a FinTech company in the field of Instant Payments, I found myself thrown into the deep end of banking, CSMs, RT1 and investment. I knew very little about investment, however Simon taught me a solid background in the field and now I know about pre- and post-money valuations and the golden “10x” figure that investors chase after. Here I feel I’ve got to introduce a slightly corny link- my mentors here have invested in me a lot this week (though they assure me it’s for their own future gain).

 

I’m looking forward to getting to know the team members more and find out about what they’re working on, as well as learning more about a wide range of industries. They’ve got the balance right here: smart and knowledgeable but ready to seek advice, hardworking but can still have a laugh throughout the day. Let’s see what the next 7 weeks brings…

Rapid Innovation Group Company Reaches Agreement in Principle From Private and Public Investors

Global Traceability Solutions GmbH, the operator of the largest traceability network in the world, has recently confirmed an equity investment from a number of public and private sources.

The funding will allow it to step beyond its core markets in timber and timber-related products into a number of exciting new domains in which it has secured anchor partners.

More information is available from www.global-traceability.com

Now for your first task, I want you to…

Hi, I’m Sheikh, RIG’s shiny, new intern. Here’s my story:

It all started with a late-night, prospective email from a sleepy undergrad, no doubt tired from all the procrastinating he did that day. Not 12 hours had passed and I was sitting across from David, still baffled he had caught the first train from London to come and interview me. Though if you ask him, he’ll have you believe he happened to have important business in my engineering department that day anyway. In any case, I did well to convince him, and Shields on a subsequent interview, of my many transferable skills. Perhaps too well…

 

On my first day, I was deployed to Canterbury. With only David and Sam (the Commercial Director) assisting me, I was tasked with exploring a partnership with an accomplished, Soviet scientist with a (potentially) dark matter detecting nanotechnology. It was decided that I would be in charge of the most important part: taking minutes. David and Sam handled the simpler things like talking the company through the variety of exciting things we could do together to commercialise the technology, showcasing parallels with successful, previous partners and exuding an aura of confident competence. After the meeting, Sam informed me of the corner office and pair of PAs that awaited my arrival back at the office. Two weeks in and still unable to find my office, I have settled for one of the hot-seating desks next to everyone else.

 

However, in all seriousness, my first two weeks have far exceeded my expectations. My first day was the perfect introduction to RIG. I got to see two very experienced Directors explain to a prospective partner company exactly how RIG adds value and accelerates the growth of innovative technology. I also had two train journeys worth of time to interrogate them on all the exciting things the firm is working on. On my second day, I was allocated a laptop and instructed to do a SWOT analysis on all the high-tech companies we’re working with. This quickly got me up to speed on how RIG was helping each partner and got me talking to all the people at RIG who were in charge of the various relationships. The remainder of my first week consisted of identifying state-side venture capital firms for an advanced materials company and trawling through research reports and elusive patents. Coincidentally, I had already done some work with this company through a student society a few summers ago. The week was rounded off with the chance to work with the CEO (and veteran chemical engineer) of one of our exciting partner companies on a corporate restructuring and brand narrative project.

 

I expressed an early desire to do more work on business development and Shields happily obliged. My second week involved pairing up with an intern two-weeks my senior to present approach proposals for two prospective partner organisations. The confidence and responsibility afforded to us by Shields was empowering and indicative of how encouraging the flat-hierarchy at RIG can be. Other symptoms of the meritocratic culture are the opportunities to work closely with the firm’s management on things like internal corporate strategy and colleagues keen to share their accumulated wisdom at any sign of struggle or curiosity.

 

A two-week dose of acronyms, World Cup speculation and metal-organic frameworks later and I’m still standing strong. Next week, to make space for a brand-new intern, I’ll be shipped off to Aberdeen!

 

Industrial waste, CEOs, and air-con politics: 2 weeks at RIG

RIG summer intern, Alex Crichton-Miller, tells us about his first 2 weeks with us:

Come Monday, I will no longer be the only intern in the office. I feel rather like an only child who, on finding out they will have a younger sibling, cannot help but feel a tinge of regret that it will no longer be simply me. The team at RIG is a very close-knit unit, reminiscing about antics on away days more than a decade ago as often as they argue about the most appropriate way to approach a client. I have been exhilaratingly swept up in it all from day one, meeting with clients and being asked to contribute right away. So these first weeks have flown by in a haze of acronyms, action registers and Gantt charts, cups of tea and arguments over the air-con (a divisive issue in the office to say the least).

As well as sitting in on meetings to get an insight into the breadth of work RIG does, I’ve been working on two things that couldn’t be more different: one, an ongoing piece of market validation for Ffion on industrial waste streams (which has promoted LinkedIn and EU legislation to the top of my ‘most visited’) and the other a piece of management structure work with a new client. In our two 4-hour kick-off meetings with the latter’s CEO, I managed to simultaneously type a Word doc longer than my thesis and catch an aircon-induced cold. It was certainly an experience, made still more intriguing by the chance to really let him talk about the organisation he runs, and then go away and brainstorm how we could solve his challenges.

RIG’s business model means that we have to wear a lot of different hats, which can be confusing when you’re trying to pin down at least one of the tasks you’ve got to do. The best thing about being here so far has been that, even though it’s tough, everyone that works here treats the world like an opportunity for deeper learning: I’ve been given tips on organisation, presentation, recycling, and even punctuality (for my sins!) by partners, helping me better navigate the choppy waters of small company culture. Some of that was put to the test yesterday when I attended the Rushlight Summer Showcase – where a huge array of Cleantech companies put themselves on show – and was required to go out and try and make contacts, get business cards, and talk persuasively about RIG. The jury is still out on where I did a good job, but being plunged into the deeper end of things is what makes it such a pleasure to intern here.

Helping to commercialise early stage technologies means that you can be doing one thing on one day, and something completely different the next. That might make an intern feel unnerved, but luckily the people around me have the ability, experience and (crucially) warmth to make that a thoroughly enjoyable experience. Bring on the next 6 weeks!

Energy storage: generation’s forgotten twin

In recent years, the conversation around renewable energy sources has grown broader and louder. Although wind, solar, and their lesser-known cousins do not (yet) represent a majority of energy generation in the vast majority of countries, they form an increasingly significant part of the grid’s energy mix. Indeed, in 2017 – and for the first time in its history – Britain generated more of its electricity from renewable and nuclear sources than from gas and coal.

Great news. Onwards and upwards! But there’s a small hitch… Renewable energy is famously intermittent. The wind blows when it feels like it and, to the ire of many British beachgoers, the sun shines any time other than when you want it to. Ok, some renewable energy sources such as hydro are more predictable but let’s focus on the intermittent side of things for now.

Because of our historic dependence on ‘predictable’ conventional generation, we often overlook a critical component of energy provision in the next 10… 20… 100 years: storage. All too often, energy generation and storage are unhelpfully divorced from one another. Yet, we will never successfully achieve a renewable future without realising an equivalent investment in, and evolution of energy storage technologies. The yang to generation’s yin, if you will.

It is only really since the advent of Tesla that the world has started to think seriously about energy storage (good Tesla). We have been talking solar panels and wind turbines for several decades. Storage has some catching up to do. Indeed, it is the automotive industry which is really driving the flow of investment into energy storage technologies. This is also why many people are limited to thinking that ‘storage equals batteries’ (bad Tesla), predominantly lithium-ion. Yes, I know we use the same chemistry in the batteries that power our phones, laptops, etc. but this isn’t the coalface of chemical battery innovation.

The potential problem with this battery-focused view is that it will not be the best storage technology in all situations. Lithium-ion isn’t even that good: it doesn’t store that much energy, it’s expensive, and it’s not entirely safe. You can pick figurative holes in all batteries, all technology types, but my fundamental point is that this is not a ‘one size fits all situation’.

For example, a remote monitoring sensor requires short, large bursts of power that might be provided by a supercapacitor. Electric vehicles of the future might run on fuel cells, instead of batteries. And grid-scale renewable generation will need to be paired with grid-scale storage which could take the form of giant flywheels, compressed air energy storage in vast underground caves, or something we simply haven’t invented yet.

Successful innovation leaders will remain agnostic as to what future storage solutions will be required by each industry and application. My point is that, by focusing on batteries, we may limit the development potential of other technologies, some of which could be essential to our energy future.

Secondly, and to go back to where I started, we will need a myriad of solutions to support the energy transition to a cleaner, renewable grid. Unless we re-establish the critical link between storage and generation, innovation in the former will continue to lag behind. In practical terms, we will produce all the energy that we could possibly want from the sun and the wind, but it will have nowhere to go.

The allure of the ‘data is the new oil’ analogy

The commodities market is no stranger to data; a quick Google search will lead to streams of data showing price fluctuations and percentage deltas. Oil is back up to $70 a barrel and lithium is riding high on the projected growth of batteries and electric vehicles. One thing, however, that is not publicly traded on the commodities market, is data itself. A myriad of recent articles have hailed data as the new oil- the most valuable commodity over the last century. However, while the comparison of data and oil has some use, to label data as a commodity like oil is a misnomer.

The comparison is an attractive one. Data is seen as the fuel for our modern information economy. It is extracted in a raw and crude form and refined to produce something of real value. Yet, the analogy is overly simple and ignores some key differences. It is important that these distinctions are drawn to enable us to think about data and its value in the right way.

The data/oil/commodity analogy

For those of you who haven’t seen Billy Rey Valentine being condescendingly explained the commodities market in Trading Places, it’s probably good to start with a quick definition. Commodities are basic goods and raw materials that are extracted, exchanged and refined. They are agricultural products, coffee beans, gold, oil and of course frozen orange juice. As the alluring narrative goes, data too is mined and refined.

But, data lacks what economists call fungibility: the property of a good or a commodity whose individual units are essentially interchangeable. If I buy electricity from E.ON or EDF, I still expect both sets of kWhs to keep the lights on. In this case, crude oil is extracted, refined and barrelled for use in power generation and the value is the generation of power which is uniform in its output. That barrel of oil had the same teleological journey as the next one.

Data, on the other hand, is differentiated by type and quality. More importantly, the value of data comes from the insight and information one can extract from its raw form; these insights are highly subjective, largely influenced by methodology of analysis and therefore differ wildly through interpretation. Cambridge Analytica had access to a similar ‘barrel’ of data as everyone else. What they did with that barrel, the insights they drew, and their capitalisation of its value set it apart from others.

Another difference in the analogy is that once commodities are used, they often can’t be used again.  Data on the other hand is not a finite resource. It can be generated, used, reused and reinterpreted. Data can be stored and the accumulation of it is highly sought after in the modern information economy. Even when companies go bankrupt and assets get stripped, databases are often considered the most valuable assets. For example, when Caesar’s Entertainment- a gambling giant that pioneered its “Total Rewards” loyalty program- filed for bankruptcy, its most valuable asset was deemed to be this customer service database valued at $1 billion. No wonder companies are keen to get you to reply their GDPR consent emails!

So, as we have explored above, there are real limitations to the data/oil/commodity analogy. But why does it persevere to be alluring? The strength of the data/oil/commodity analogy lies in the fact that data is a valuable asset that is revolutionising business models and driving technological innovation. The ability to collect data and valorise its raw form into insight and information is the fuel of lucrative new businesses and innovative new models—much like oil was at the turn of the last century.

 

Data’s use

Of course, when people think about data it is the tech giants of the modern world such as Facebook, Google and Amazon that come up first. Although Facebook was slightly dented by recent events following the Cambridge Analytica revelations, data still reigns supreme. Google’s recent demonstration of their AI Assistant had people simultaneously in awe and shock at the pace of development of natural language processing and artificial intelligence.

It is not just in Silicon Valley and with internet companies where data is revered; industrial giants and deep-tech early stage companies alike are waking up to the strategic value of data and information. The two largest industrial giants, Siemens and GE are both preparing for the future of industry, where data and the services it can enable will form a key part of corporate strategy. Industrial behemoths like these are increasingly moving towards collecting data and utilising it to improve their ongoing customer relationships and open up new value-added services. This transition will lead to changing business models- a process already under way. Rather than industrial customers buying machinery (products) and maintenance contracts, the likes of Siemens and GE utilise data to provide a continued and long-term service to their customers. Contracts are no longer about just selling products, but delivering ongoing solutions that rely on data. It is an extension of Rolls Royce’s “Power by the Hour” concept developed- well, trademarked in fact- in the 1960s.

Data is spawning innovative technologies from the obvious smart algorithms to engineered hard technologies such as hydro-powered turbines to power smart water networks, novel approaches to asset monitoring and innovative ways to harvest energy to power the sensors that underpin these. Technologies span from smart approaches to data collection and methods to power sensors through to intelligent methods of analysis. The ability, appetite and vision to adopt these new technologies and develop models that the resultant data/information can enable, will lead to winners and losers across different industries. Data isn’t only the fuel of companies like Amazon and Google; it is a lucrative asset that will prove increasingly valuable industries such as energy, manufacturing and farming (to name just a few).

Conclusion

Data, then, can’t be called a commodity and it differs in comparison to sticky, black crude. It is an asset whereby its value stems from the interpretation and transformation of data into information. This information is an important component of our modern economy and will drive strategic diversification in some industries and kill of players who don’t move fast enough with it. Like oil was at the turn of the 20th century, data is a valuable asset that is changing the way our economy operates. It is no wonder that the reformist Saudi Prince, Muhammad bin Salman, pledged $45 billion to SoftBank’s Vision Fund whose focus is on the internet of things, robotics, AI and ride hailing.