the innoventum business plan 21.03
TRANSCRIPT
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Contact | [email protected] | Dr. Sigvald Harryson | Founder and CEO Office Location | Turning Torso 275 | SE-‐211 15 Malmö | +46 732 50 49 81
Power to the People – Beautifully Distributed Our Vision: By 2020 InnoVentum is the globally leading brand for the world’s most resource-‐efficient, carbon-‐capturing, wealth-‐creating and eye-‐pleasing distributed renewable energy solutions. By 2030 our revenues exceed those of Tetra Pak. Our mission is to bring Power to the People by making profit from the top and revenue from the bottom of the pyramid. Therefore, our value propositions are to offer exclusive design to those who can afford and affordable design to those who need. Our track-‐record in extreme innovation secures success as confirmed by R&D partner iKnow-‐Who.com.
Resource-‐Efficient: Big is not always beautiful and certainly not in wind turbines. The details of this business plan offers a direct comparison between two of our small products and two large products provided by Enercon. The comparison shows that when the large wind turbines are made yet larger, they get decreasing return on materials used (copper, steel, concrete, magnets). By contrast, we operate on the positive side of this curve, where we get increasing return on materials used. As a result of being on the right side of the curve, the energy produced compared to materials used is more than five times higher for our Dalifant than for the Enercon 3MW.
Carbon-‐Capturing: In addition to offering five times higher energy return on materials, the materials we use are mainly wood, having absorbed instead of causing CO2 emissions like steel and concrete.
Wealth Creating: Owning an Enercon or any other large-‐scale wind turbine does create value, but our solutions go beyond this. We also create climate wealth by using CO2 absorbing materials and by producing high-‐value energy at its source of consumption. Distributed energy both eliminates the need for highly cost-‐intensive transit lines and reduce the transmission loss to a fraction (less than one percent) of long-‐distance transport of electricity. In island economies where the normal source of electricity is from diesel or gasoline generators, we deliver emission-‐free electricity at less than half of the cost of fossil fuel generated energy. In developed markets, the value of our energy is on average three times higher than the spot value – again, thanks to decentralisation.
Eye-‐Pleasing Design: InnoVentum is the only renewable energy company in the world having been invited to make a design-‐release at the Business of Design Week in Hong Kong. As a consequence of the strong interest generated in Hong Kong, Mainland China and across several Pacific Islands, we are now inviting investors to us in the exciting growth phase whereby InnoVentum AB establishes a daughter company – InnoVentum Asia – in Hong Kong.
Investment Proposal: In the business plan that follows this introduction, three scenarios are outlined based on different funding levels. Our ambition is to acquire $2,6 million in 2015 and $3,4 million in 2016 to reach sales amounting to $60 million in total in 2017 and have at least one awarded PCT in batteries by 2018. The Breakthrough Factory of InnoVentum – iKnow-‐Who – has an impeccable track-‐record of 20 extreme breakthroughs. Together, we will make a breakthrough in durable, affordable and sustainable Li-‐Ion Batteries (LIB). Combined with our hybrid solutions this breakthrough will give Power to ALL People. I invite you to join our breakthrough revolution to democratise power!
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InnoVentum: Exclusive Design to those who can afford – Affordable Design to those who need InnoVentum’s Vision: By 2020 InnoVentum is the globally leading brand for the world’s most resource-‐efficient, carbon-‐capturing, and eye-‐pleasing distributed renewable energy solutions. Our mission is to make profit from the top of the pyramid and revenue from the bottom – enhancing economies of scale for further profitability and affordability. To date, we have made some 20 installations across four countries. By 2030 we will have surpassed the revenues of Tetra Pak:
InnoVentum’s Current Status: In year 2015 – after four years of Research & Design with extreme testing and initial commercial sales, InnoVentum has developed more opportunities than the company can capture with its current resources. Our Dali PowerTower has demonstrated outstanding resilience across several typhoons in the Philippines and triggered several requests for proposal from the Asian Development Bank (ADB) and Telecom Communication Providers stretching all over the Pacific Islands. One of the outstanding proposals counts 300 wind turbines. Our exhibitions in China and Hong Kong triggered strong interest in our Giraffe, but also in our new eBus charging station. Both taxis and buses are going electric in China – a megatrend that will gradually spread across the world. We are in negotiations with a petroleum company planning to offer EV-‐charging at their gas-‐stations – possibly using the Giraffe 2.0 and the eBus charging station for visible sustainability. In 2014, the Swedish Energy Authority and the Swedish Innovation Agency approved grants totalling more than three million Swedish crowns ($400.000) for EU certification of the Giraffe 2.0 and for commercialization of the Dalifant. The two grants, the support from Invest in Skåne and from Hong Kong all boost our confidence that we are doing the right thing. Leveraging our 15-‐year history of extreme breakthroughs through collaborative university competitions, we are now building the networks to make a breakthrough in battery back-‐ups. This gives investors the opportunity to be part of an extreme breakthrough that will make distributed renewable energy democratic. An increasing degree of our solution requires battery back-‐up so this is in line with our business needs.
InnoVentum’s Background: InnoVentum was established May 5th 2010 with the mission to give Power to the People. Currently counting six employees + myself: Ala Kazlova, Julien Daligault, Jacky Parkhouse, Lucas Gabrys, Marcus Ulmefors, Morgan Mattsson and myself: Sigvald Harryson.
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How it Started through a Breakthrough Factory: iKnow-‐Who.com In 2000, iknow-‐who.com was established by myself to solve fundamental innovation challenges – often climate-‐related – by raising collaborative university competitions involving the global centers of academic excellence. Since then, 20 innovation challenges have been solved and patent-‐protected by iKnow-‐Who.com for clients like Porsche, Nestlé, Tetra Pak, Bang & Olufsen, Straumann Institute, and AkzoNobel. The now PCT-‐awarded breakthrough we made on behalf of DSM reduced ammonia emissions by 95% in the manufacturing of urea – while also reducing the consumption of ammonia – a truly green breakthrough.
This unique approach reached publication in the Harvard Business Review in 2005 and Sigvald received his docent competence from Lund University in 2006 for inventing and deploying this new business model for extreme breakthroughs. The way in which it works and allowed to replace a rare-‐earth metal with a nano-‐polymer (now protected through a PCT awarded early 2015) is described in a two-‐minute video featuring Philips’ Global Head of Research & Alliances – Dr. John Bell: http://iknow-‐who.com/innovation-‐in-‐mind-‐2012/
We now leverage our track record, experience and networks of iKnow-‐Who.com to co-‐create breakthroughs in battery solutions that are more affordable, durable and sustainable than any currently available Li-‐Ion Battery solutions. Two years ago, Sweden benefitted from the largest R&D investment in the history of Europe (the MaxLab Accelerator investment at Lund University for advanced research on nano particles). This year (2015), Chalmers University in Göteborg was made the European center of research for Graphene with close to one billion USD investments to follow.
Our Research & Design approach proactively engages leading researchers from centers of excellence like Lund, Göteborg and Uppsala University in Sweden and ENSTIB (Ecole National Supérieure des Technologies Industrielles du Bois) in France. Until now, we have applied for a patent via PCT (Global Patent Collaboration Treaty, current status: patent pending), 9 design protections and several trademarks, including that for “Dali”. The use of renewable materials makes our solutions CO2 negative and exceptionally silent and typhoon-‐resilient. Modular design secures compact transport volumes and ease of installation – strong claims that are part of our PCT application.
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Scalability through CNC and CAD-‐CAM using Autodesk Inventor Suite as Design Platform Based on our designs, we first make scale 1:10 models – followed by full-‐scale manufacturing for testing of assembly-‐time, noise absorption characteristics and typhoon resilience. We always involve the best universities and experts to secure superior results. This process is depicted below:
Tesla Motors, InnoVentum and other forerunners in merging design and sustainability have been offered a three-‐year license for the new CAD program by Autodesk. This is further enhancing our excellence in CAD, while sharpening the connection to mass-‐manufacturing anywhere in the world by using a global standard design program. Any wood and glue laminate manufacturer using standard CNC (Computer Numeric Control) machines can read our software for accurate computer-‐aided manufacturing of our tower designs. Most of the manufacturers below have already confirmed full compliance with our design requirements and made competitive quotes for our products.
Increasing Robustness of the Value Chain Through the installations made, we have developed standard-‐agreement partnerships with installation partners such as Svevia for digging and cabling; Krinner for screw foundations; and Skanska for Electrical work. These partners have wide geographical footprint supporting our scaling.
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Why Small is better and more Resource-‐Efficient than Big The table below shows that when the large wind turbines are made yet larger, they get decreasing return on materials used (copper, steel, concrete, magnets). By contrast, we operate on the positive side of the curve where we get increasing return on materials used.
If we consider the energy produced over the lifetime of the large and small solutions and relate this to the materials use for the solutions, the Dalifant produces 10,6 kWh per kilo of material used whereas the Enercon 3MW only produces 1,9 kWh per kilo of material used. This means that the Dalifant delivers more than five times more energy per material unit used.
Solutions Capturing CO2 BEFORE Producing CO2-‐Neutral Energy If we then look at the type of materials, the Dalifant (and any other InnoVentum solution) uses mainly wood, which has absorbed and stored CO2 during the entire growth period of the trees. By contrast, the Enercon and all other large-‐scale wind turbines use concrete and steel as main materials. Therefore, the Dalifant has captured nearly six tons of CO2 while the Enercon 3MW has caused more than a thousand tons of CO2 emissions simply through the materials used.
Smart Grid for Smart Savings Finally, the energy that is produced carries a very different value, depending on whether it comes from a small decentralised or a large centralised wind turbine, because large solutions always deliver into the high-‐voltage side of the grid where the value is defined by a spot price. By contrast,
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decentralized micro-‐production delivers energy on the other side of the meter -‐ into the domestic grid where it represents a consumer price. The figure below compares the consumer price and the spot price in three countries:
On average, the value of consumer-‐priced electricity is three times higher than the value of the spot price. By producing the energy at its source of consumption the combined transit and transmission losses are on average less than one percent (1%) of those caused by large scale wind parks that are far away from the point of consumption. In fact, the total transmission losses in Sweden account for 7-‐8% of all energy produced. This is equivalent to the total amount of energy produced by large-‐scale wind turbines – a loss that is entirely eliminated by decentralised solutions such as ours.
In areas where there is no grid at all the price per kWh of our solutions should be compared with that of diesel or gasoline generators. A recent benchmark from the Philippines confirms that electricity from gasoline generators costs three times more than the electricity from our Dali PowerTower:
• Gasoline Generator: 60 US Cents/ 27 Pesos • Dali PowerTower: 16 US Cents/7 Pesos
The combination of affordability, sustainability and durability has triggered a series of Expression of Interest and Requests for Quotes from ADB and Telecom Equipment companies. One single deal in this context would exceed the volumes of our most aggressive growth scenarios.
Profit from the Top of the Pyramid and Revenue from the Bottom We address both the top and the bottom of the pyramid – two quite differentiated segments – with a product portfolio using intelligent design and smart functionality for differentiation between:
• Exclusive design for those who can afford: Real estate companies, hotels, municipalities, owners of EVs and leisure homes without grid-‐access, commercial chains and ecological farms who all appreciate exclusive design, renewable materials, silence and reliability of operation;
• Affordable design for those who need: NGOs, disaster relief organizations, telecom operators (powering 2G, 3G and 4G base-‐stations) and people who have no access to power today (or mobile internet), who appreciate the resource-‐efficient structure of the Dali PowerTower – as well as its high energy-‐density, transportability and speed of installation. The design is well suited to also carry a mobile internet solution.
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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 green line below presents the combined power curves of our Dali PowerTower -‐ having an almost flat energy curve compared to that of solar PV or wind in isolation:
In other words, our hybrid solutions secure more stable energy supply day and night – across all seasons of the year. This has a very positive impact on the Levelised Cost of Energy (LCE). The curve below shows a comparison of our hybrid wind-‐solar solution compared to a pure solar PV solution – made on behalf of the Asian Development Bank. The red curve shows the full level of batteries (55kWh). The curve in orange shows the discharge happening to pure solar solutions during the night when the solar part is no production. The curve in blue shows the discharge load with our hybrid wind-‐solar solution producing a minimum of 700 W though all the night (often much more):
The batteries in our hybrid solution will normally not deep-‐cycle below 45%, which will allow for a lifetime of at least 5000 cycles while a non-‐hybrid solution will deep-‐cycle below 80%, which reduces the battery lifetime to maximum 2000 cycles. Thanks to the lesser degree of deep cycling of the PV-‐Solar hybrid solution, the Li-‐ion batteries will only have to be exchanged 1 time in 20 years while the pure solar PV solution will need to have its batteries exchanged 3 times in 20 years. As battery back-‐ups represent at least one third of the total installation cost and more than half of the LCOE (Levelized Cost of Energy), the reduced DoD (Depth of Discharge) this is a very important USP and a driving force as to why we steer our university networks towards new breakthroughs in LIBs.
0 100 200 300 400 500 600 700 800 900
1000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Energy, kWh
8 solar panels
Wind turbine (Performance)
Deep discharge zone
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Combining Technical and Social Innovation One additional USP of our products in general and the Giraffe in particular is their role as beautiful social innovations in society. This triggered Malmö City to order a Giraffe to greet thousands of visitors joining the Eurovision Song Contest – held in Malmö in 2013:
Based on feedback from a user survey conducted during a road show at a dozen municipalities –requesting space for two EVs while fitting into two parking lots – we decided to design a slightly larger, but more space-‐efficient, Giraffe. Through smart design, the Giraffe 2.0 provides higher energy density than any other solar or hybrid carport on the market. No other PV-‐including solution delivers more than 13.000 kWh per year using less than 25 square meter space. Combining renewable energies of the wind and sun – coupled with systematic use of wood for the structure – gives the Giraffe a CO2 negative start: It has absorbed more than 4 tons of CO2 through its renewable materials. For every year, it then delivers enough CO2 neutral energy for two electric cars to drive around the Planet. Using the iconic Turning Torso as home base in Sweden, it was natural for InnoVentum to rely on advice from Santiago Calatrava and his Chief Designer, Mike Pfisterer, to co-‐create the new rounded design for optimal signal value of absolute sustainability – ready to decorate any city with strong ambitions in sustainability and passion for iconic design. We were one of ten companies to be invited to make a design release at the biggest world design event: www.bodw.com.
Speed of Installation through Extreme Modularity When taking our Giraffe into the 2.0 dimension, we used our design and modularity experience to reduce the number of unique parts from 71 to 11 – while cutting total number of parts by 66%. This significantly reduces the installation time – as shown in a one-‐minute-‐video from the first full-‐scale installation: https://www.youtube.com/watch?v=g_BfA6tn9V8&feature=youtu.be
The two pictures below show the Giraffe 2.0 installed at the world’s first urban test and demonstration site for renewable energy hybrid solutions. On the five-‐year-‐anniversary of InnoVentum, 05.05.2015, this site will be formally inaugurated in Malmö West Harbour.
All members of the InnoVentum Family are welcome to join this event, which we make in partnership with Invest in Skåne as an International Event on Green Cities of Tomorrow:
http://www.innoventum.se/gct/
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Benchmarking the Giraffe 2.0 Against Competing Products The Giraffe 2.0 sets a new global record in terms of energy density – delivering more than 13.000 kWh while using less than 25 square meters to do so AND “removing” less than one m2 actual surface from a valuable urban location, parking area, playground for children, or home yard. The table below compares a range of parameters delivered by the Giraffe and its five closest competitors. Competing products are pure solar roofs, none of which offering wind-‐solar hybrid functionality yet. Therefore, energy yield and energy density are very far from reaching the levels of the Giraffe 2.0:
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Scaling up the Giraffe for eBus Charging Through dialogue with, for example, eBus manufacturers and large petroleum companies, we have been asked to scale up the Giraffe to handle the charging needs of electric buses. The new eBus charger leverages our core technologies in wind-‐solar hybrids and glue-‐laminate wood design:
Even in markets without strong incentives to support renewable energy – such as China, calculated below – our eBus charging solution still enjoys reasonable revenues with the full investment being recovered in ten years, after which the eBus charger keeps generating more than five million RMB during its remaining lifetime. Still, many clients value the image-‐boosting impact yet higher than the ROI, which makes the solution attractive for most markets – with or without incentives.
Going Online with Performance Monitoring Our customers take great interest in the energy that they generate. B2B customers want nice and convenient ways of showing the world how much green energy they generate and how this translates into CO2 savings and/or number of green miles driven by EVs. The new cloud powered web interface will allow access the latest production numbers on any internet connected device. The responsive design optimizes the interface to the user’s current screen size, thereby ensuring that all data will be accessible and look great regardless of whether it is displayed on a laptop, tablet, phone or a large flatscreen. In addition to the refined aesthetics the future interface will integrate both wind and solar production into a single presentation. Tests of early working prototypes are already underway – as shown below:
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Giving Power to Five Global Segments In short, we bring renewable energy solutions to new levels and new arenas by offering intelligent and beautiful designs of smart combinations of renewable materials and renewable energy technologies that bring exceptional user benefits in terms of power density, continuity of energy production, aesthetics, acoustics, modularity and sustainability. Combined, our exclusivity and affordability products attract five global segments:
1. Power to the Public Institutions: Green Cities and Municipalities, Parks, Science Parks, Universities, Schools, Daycare Centres, Marinas, Museums, Sport Centres, Golf Clubs.
2. Power to the Businesses: 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 as charging station for Electric Vehicles – both at public parking facilities, along roads as visual green charging spots and as home installations.
4. Power to the On-‐Grid 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 66 Dollarcent per kWh, which is highest in the world.
5. Power to the Off-‐Grid People: Our biggest growth segment that we currently address with the UN, ADB, Island Resorts and telecom base-‐station power. Globally, 1.6 billion people are lacking access to electricity. Our affordability solutions offer electricity at half the cost of diesel power, and our levelised cost of energy will be yet lower once our breakthrough in LIBs reaches market.
Segmentation & Sales Strategy We will devote a significant portion of the growth capital to smart commercialisation models – often based on partnering and increasingly based on financial solutions. We will also devote our direct sales efforts through growing sales teams addressing B2B customers in Scandinavia, China, Philippines. We are also getting better at selecting distribution partners. Our first distribution partner in France, Philippe Hochard, already made his first sale of a Dali PowerTower.
We do have distribution partners in Japan, but no sales yet. This will have to change, especially as the leading magazine for landscape architects in Japan, Landscape Design, has 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
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Harnessing the Power of Social Media – and the Generations of the Future Our engagement in the Power to the People markets also has a significant medial impact. During two months of updates on the Power to the Philippines project on Facebook, we acquired more followers than in the first two years of InnoVentum’s Facebook history. Our recent Guinness World Records in the longest parade of Electric Vehicles (http://www.innoventum.se/guinness/) also boosted our Facebook audience, which recently passed 3000 followers. This is still a low number in general benchmarks, but high in the context of renewable energy – with exponential growth patterns. Most importantly, the generations of the future embrace our products already today. Both in the Philippines and in the West, children pay particular attention both to our installations and events and often make posts on Facebook – with some examples following below:
While Enjoying Strong Attention Also in Classic Media Our track record in media-‐coverage is outstanding with 55 articles and news releases published by end of last year. Several magazines wrote about the Giraffe as a potential solution to London’s black-‐out challenges – by bringing green energy into the grid as opposed to taking brown energy from the grid for EV-‐charging. The high number of publications is not including the media-‐attention following the release of the Giraffe 2.0 design in Hong Kong. This event has had the biggest impact so far!
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Establishing InnoVentum Asia in Hong Kong In order to capture the growth opportunities across Asia, we will need to have a strategically positioned base where logistics, language and legal regimes all are favourable – in Hong Kong. Establishing InnoVentum Asia in Hong Kong will serve several complementary purposes:
1. Commercial Centre dealing with business execution related to Asian customers, such as ADB and Ericsson (Manila), Sinopec and BYD in Mainland China and the Pacific Islands without grid-‐power stretching from the Philippines to Australia + any additional markets developing in this region.
2. Additional investment and IPO vehicle that may be favoured by Asian investors. If this portion of investors grows into dominant position, the InnoVentum IPO will happen at HKEx.
3. New centre of innovation based on proximity to Asian universities, partners and customer needs – to catalyse, for example, the collaborative university competition on Li-‐Ion Batteries.
From a company valuation perspective, it is important to note that the Hong Kong based IPO vehicle will belong to InnoVentum AB and, thereby, bring value to all shareholders of InnoVentum AB – even if we should decide to float a separate company – called InnoVentum Asia – at the HKEx.
Outlining three Different Growth Scenarios Rather than projecting one clear revenue figure for the future, three different growth scenarios are outlined – based on different premises:
1. With Growth Investments of $2,6 million in 2015 and $3,4 million in 2016, we will reach sales amounting to $60 million in total by end of 2017
2. With investments of $800.000 in 2015 and $1,2 million in 2016 we will make sales amounting to $30 million in total by end of 2017
3. With limited investments, we would reach sales amounting to $10 million in total by end of 2017.
Each of these three scenarios is described in terms of:
• Revenues generated and costs incurred (Cash-‐In and Cash-‐Out) for 2015, 2016 and 2017 • Assumptions that need to be fulfilled to make the scenario happen • Total revenues for the business year 2017 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. The forecasted revenues are exponentially dependent on the investments, because high volumes bring critical efficiencies in manufacturing and economies of scale in sourcing. All organizations and activities mentioned in the first two scenarios have been reached already. The transition from creating to capturing these opportunities is linearly related to the growth capital that is injected. Scaling up the commercialisation collaboration with Business Sweden will also strongly influence our growth – based on a model described after the three scenarios.
The Li-‐Ion Battery Breakthrough is only part of the first scenario, which is why I see this as the most attractive one both for InnoVentum and all Investors. The IP capturing from this breakthrough effort will benefit InnoVentum and its Investors with great returns in many different ways.
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1: Aggressive Growth Scenario with Investments of $1,6 million in 2015 and $3,4 million in 2016:
Assumptions for the Aggressive Growth Investments Scenario:
• The growth investment allows us to establish a strong platform for business-‐development in Asia – both in China and in Power to the People markets such as the Philippines – based on a partly localised value chain and strong partnerships with financial institutes such as ADB.
• Both energy access and telecom power segment prioritise the USPs of our hybrid solutions that deliver lowest LCOE (Levelised Cost of Energy) while offering highest typhoon-‐resilience. Pilot installations are successful and scaled up to take growing parts of the immense 2G, 3G and 4G base-‐station market across the Pacific Islands and Asia as a whole.
• The strong interest in our solutions (Giraffe 2.0 and eBus Charger) for EV charging result in significant sales in (1) China, (2) Europe, (3) other Asian Markets, and (4) USA.
• The May 5th full-‐day event (http://www.innoventum.se/gct/) with decision-‐makers from municipalities in Scandinavia, UK and Asia will trigger a wave of sales – in particular of the Giraffe 2.0, which is inaugurated at the Malmö West Harbour demonstration site on that day.
• Through co-‐creation with iKnow-‐Who we make a breakthrough in Li-‐Ion Batteries that enhance durability, affordability and sustainability in ways that give us an unbeatable USP – while securing partnering and licensing revenues that recover the 1 million USD investment in 3 years.
• B2B sales to corporate customers and commercial chains (such as Sinopec, IKEA, Scandic Hotels, Choice Hotels, MAX, Carrefour) support highly visible mass installations in multiple markets.
• Commercialization collaboration with Business-‐Sweden for immediate (2015) support in core markets where InnoVentum does not have own reach yet (CN, HK, PH, DK, NO, 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). This allows InnoVentum to attack 5 new markets during 2015. The markets where significant business is developed will see new InnoVentum entities being established – often in partnership/joint-‐venture with local partners.
• The Giraffe 2.0 takes us into some exclusivity markets. The exclusivity markets are partly acquired in collaboration with pre-‐identified Business-‐Sweden offices.
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• 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 UK, Hong Kong, China, NO, DK, Benelux,
FR, DE, CH and SE raises the need for visibly green EV charging stations. • Partnerships with several players in EVs, that market and distribute the Giraffe in bundled offers.
Target companies: BYD, Tesla, VW, Renault, Nissan, Volvo, BMW, NEWS, Mitsubishi, Mercedes. • Alliance with operators like Smart/Globe/ and infrastructure providers like Ericsson to make Dali
PowerTowers for disaster relief and energy access purposes equipped with HotSpots. This transforms the Dali PowerTower also into a connectivity product mainly through last-‐mile extension, but partly also through satellite for specific UN-‐applications.
• Good business relationships with at least one Agency and/or Body within the UN (e.g., UNICEF, UNDP, UNEP, UNOPS, UNHCR, UNHRD, UN/PD, WHO).
• Business development with at least one NGO (e.g., SIDA, SOS Children’s Villages, Red Cross, Save the Children, IOM, WFP).
• The Power to the Philippines project leads to cooperation with several disaster relief/rebuilding the Philippines financiers also beyond Barnmissionen (ADB, IFC, World Bank, Ayala Foundation, SM Foundation, Philippines Disaster Relief Foundation).
We have met with all organisations mentioned above and several proposals are in decision-‐making – one with potential for 300 windturbines. More footprint and resources in sales will make it possible to reach the figures of this scenario and even far beyond. With Growth Investments of $2,6 million in 2015 and $3,4 million in 2016, we will reach sales at least amounting to $60 million in total in 2017. We estimate that these sales figures will be split between the following products in the following markets:
All figures are in USD Business Sweden collaboration in country markets, where InnoVentum is not established
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2: Medium Growth Scenario based on Investments of $800.000 in 2015 and $1,2 million in 2016
Assumptions for the Medium Growth Investment Scenario:
• One of the current proposals to ADB or the 3G telecom backup power industry is accepted • Some partnerships in the Philippines lead to the establishment of successful installation projects
in selected regions such as 100 Islands, Palawan and Tacloban • Energy prices rise by 10 % by 2016 in a few of our target-‐markets • 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 the
Giraffe 2.0 as a bundled offer • The Power to the Philippines project 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) • Commercialization collaboration with Business-‐Sweden contributes to sales volume in the
markets where InnoVentum is not yet 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 $800.000 in 2015 and $1,2 million in 2016. The aggressive growth scenario is equally realistic – at a three times higher investment-‐level. The medium growth scenario mean sales amounting to $30 million in total in 2017, of the following products in the following markets:
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3: Self-‐Driven Growth Scenario Based on Failure to Attract Growth Investments
Assumptions for the Self-‐Driven Growth Scenario:
• InnoVentum fails to attract any significant growth investment. • Lack of partnership opportunities in the Philippines reduces the speed of development
significantly. • Energy prices remain extremely low in Sweden and stable in other markets. Own renewable
energy does not pay off in Sweden and therefore our local growth is limited.
All figures are in USD
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• Oil prices remain stable so that the diesel generated electricity costs about 33 US Cents per kWh • Fossil fuels lobby ensures that electric vehicle industry does not boom. • No commercialization collaboration with Business-‐Sweden. • None of the outstanding proposals to ADB and the telecom industry leads to business. • 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:
• Distribution partners are identified in several growth countries such as Japan and Germany. • Continued funding for Research & Design from VINNOVA and the certification from the Swedish
Energy Agency. • InnoVentum remains very 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 Power to the People in the table below).
This would mean sales amounting to 10 mio USD in total in 2017, of the following products in the following markets:
Return on Investment While this last scenario clearly is the least attractive, it would still double the value of investments made at the 2015 evaluation and stock-‐issue. The investors joining earlier at lover evaluations will make better returns than doubling their investment, but they will have been waiting for more than two years for the exit – unlike those of you who join us now. Even in this negative scenario, nobody loses money – but the growth is not exciting. Clearly, the growing InnoVentum Family is devoted to make even the most aggressive scenario look small. By 2020 InnoVentum is the globally leading brand for the world’s most resource-‐efficient, carbon-‐capturing, wealth-‐creating and eye-‐pleasing distributed renewable energy solutions. By 2030 our revenues exceed those of Tetra Pak.
All figures are in USD
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Commercialization Collaboration with Business Sweden The first two scenarios will devote part of the growth investments to drive commercialisation collaboration with Business-‐Sweden. The aggressive growth scenario implies that we scale our collaboration to 5 of the 20 target-‐offices within 2015 and take another 6 during 2016. The criteria for office-‐selection are outlined below, and a basic business-‐model has been identified to operationalize this collaboration.
We are performing a funnel-‐based approach – addressing 20 offices with initial market-‐potential related questions, following up with the most active offices in the most attractive markets for lead-‐creation and finally selecting the most value-‐creating offices for lead-‐capturing. The offices addressed in the first round are listed below. The number of offices maintained after filtering will depend both on value-‐creation potential and on our resources available.
The Business Sweden collaboration model has been initiated in Hong Kong and Beijing with strong focus on finding pilot customers. We also collaborate with the Vienna office to enter the UN market.
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Investments into Sales force, IT Platforms and IP Expansion By attracting investments for accelerated growth, we count on expanding to 30 employees by end of 2015 and to 60 employees by end of 2016. It seems realistic that a growth platform in the Philippines, or China, will have an equal number of employees – partly in a JV-‐structure and possibly also through a franchise concept that will be scaled up gradually to other markets in the region. 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:
• Online performance monitoring – allowing both for customers and ourselves 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 get priority from the investments are listed in the table above. The figures in this table 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.
Value Creation and Exit Strategy: The exit strategy is to make an IPO by the time we have reached annual revenues of $60 million – realistically end of 2017. SE Banken Venture Capital indicates a pre-‐IPO value of 1 billion SEK ($120 million) when InnoVentum reaches revenues of $60 million with a gross margin of 60%. The high gross margins are achieved through economies of scale (volume discounts in procurement) in the Power to the People markets that enhance our margins in the exclusivity markets. The IPO will offer an exit possibility to those who want. Possible IPO avenues are HKEx, SIX Swiss and NASDAQ. Other avenues may emerge depending on where the largest InnoVentum Investors come from. The Investor(s) who bring(s) $2.6 million on board in the 2015 issue of new shares will be given 15% ownership and first right of refusal for the final share-‐issue in 2016 making another 10% of the company available at $3.4 million.
Below, the graph on the left shows the value creation from company creation through IP and commercial installations. The graph on the right shows the four share-‐issues performed in black figures and the two forthcoming emissions as well as the planned IPO in green figures:
Category Detail 2015 2016
IT3Budget On#Line'Monitoring;'Online'Sales'Platfrom;'CRM;'Crowdfundingcovering'hybrid'solutions'and2003000 2003000
Marketing Events;'Exhibitions;'Showcase'Installations,'Online'Advertising'incl'FB'and'Google'Ad'Words3003000 6003000
Sales3Growth Build'up'of'Sales'Teams'in'Target'GeographiesAsia,'Scandinavia,'Germany#Benelux#UK 4003000 130003000
Certification Tower'certification'for'Dali,'Dalifant'and'GiraffeDK,'UK,'US'and'Japan 1003000 2003000
IP LIB'IP,'Designs,'Trademarks'and'Expanding'Patents'to'also'cover'China,'Hong'KongCo#Creation'and'Protection'of'Breakthrough'in'Li#Ion'Battery'Back'Up'Solution'''' 131003000 2003000
Project Project'execution'teams'responsible'for'supply'chain'and'installations
Execution Establishment'of'Regional'Offices'in'one'or'several'of'the'Growth'Regions:'Philippines,'HK,'US 3503000 130003000BusinessGSweden Running'costs'including:'Virtual'Office'Representation,'InnoVentum'Ambassador'compensation 1503000 2003000
INVESTMENTS 33320153333AND33332016333in3U$D 236003000 334003000
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The main-‐reasons and key-‐enablers of these business results are:
• IP-‐Intensive from the Start: The company-‐creation on 05.05.10 had been preceded by twelve months of testing out the wind-‐solar hybrid concept in several geographies, business planning and co-‐creation of valuable tower solutions – supported by iKnow-‐Who.com as Breakthrough Factory – now creating new unique IP in Li-‐Ion Batteries.
• Positive Business Development Trend: The business-‐development figures in thousands of SEK are: 2011: 26; 2012: 426; 2013: 1389; 2014: 3030. This development has been accomplished with only one person in sales. This business plan is about scaling up sales. The revenue forecasts do not even account for sales of the most recent product in our portfolio – the eBus charger.
• Viral Internet-‐Logics: For the first three years, the numbers of unique web-‐visitors and followers on Facebook doubled. For 2014, this figure was four-‐folding – and the growth-‐pace is still increasing at exponential levels. We will capture the viral potential through online sales.
• Expanding Distribution: The viral trend also reaches further potential distributors. We are being approached on a weekly basis by companies wishing to become our agents, distributors or installers. We filter these carefully and have signed six distributor agreements so far.
• Increasing Visibility: Our spectacular installations at the Eurovision site in Hyllie, the EV charging Giraffe in the West Harbour 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. The installation at Hills of Grace outside of Manila is being visited by numerous human aid organisations, resort managers and our Ambassador of Sweden to the Philippines, H. E. Klas Molin recently made the big climb of the entire hill with a large delegation to see how the Dali PowerTower is proudly overlooking the Manila skyline: www.facebook.com/InnoVentum
• Power to the Off-‐Grid People: One segment counting 1.6 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 strong viral potential in this type of projects.
• Financial Solutions for Growth: 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. We are negotiating with financial partners in the Philippines to explore how similar models can be applied to accelerate pace of installations in one of the World’s fastest growth areas.
• Interest from Asia: We are getting increasing numbers of Chinese delegations to Sweden and have a number of advanced business-‐negotiations in progress.
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Examples of Co-‐Owners/Investors (Returning Investments marked by I, Employees in Italics): Name Complementarity of Owners & Investors
1. Sigvald Harryson Founder and Global Alliance Manager
2. Mohsen Djalali (I) Senior Executive within the Packaging Industry
3. Mark Pilgerman (I) Operations and Germany-‐expansion
4. Martin Ertl Chief Innovation Officer, Bombardier
5. Rafal Dudkowski (II) Strategic Planning & Business Development
6. Julien Daligault InnoVentum Chief Technical Officer
7. Ala Kazlova InnoVentum IP Management & Digital Marketing
8. Stefan Sjöblom CEO of Delta Energy Systems, Scandinavia
9. Nils Bohlin (III) Founder of Arthur D. Little Scandinavia 10. Per Nilsson Managing Partner, Roland Berger
11. Tord Wingren
Former MD of Samsung Electronics, Chairman of TAT, CEO of Ericsson Mobile Platforms, Now Chief Science Officer of Huawei
12. Lucas Gabrys InnoVentum Head of Wood Engineering 13. Jacky Parkhouse InnoVentum Office Management and Accounting
14. Johan Roos Former Professor of IMD, then Dean of CBS – now Dean of JIBS
15. Morgan Mattsson Planning and Building Permission Architect 16. Thomas Stridsberg Tetra Pak: Global Environment, Business Dev US 17. Tomas Johansson Krinner: Head of Business Dev US and Canada 18. Marcus Ulmefors InnoVentum Chief Electronics Officer
While we are humbly accepting that the competition for growth capital is fierce, we are fully committed to making the aggressive growth a reality for all investors and stakeholders: The Planet & the People who get Green Distributed Green Power; the Investors & Co-‐Owners who get ROI; the Employees who make history with the Investors. We welcome new investors who join our breakthrough revolution to decentralise and democratise power. Please contact [email protected] to pursue a your investment.
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• 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 Check out our Guinness World of Records – set on September 21st and officially confirmed October 1st 2014: at http://www.innoventum.se/guinness/ - and media coverage such as http://www.innoventum.se/dagens-industri-elbilsparad-slog-rekord/ http://www.theengineer.co.uk/news/innoventum-in-talks-to-deploy-renewable-solution-to-ev-charging/1019385.article www.zap-map.com/innoventum-talks-bring-renewably-sourced-ev-charging-london/ http://www.beycritical.com/#!the-weird-and-the-wonderful/cqlq