Taking advice on trust

To assist low-carbon technology start-ups become ‘investment-ready’, the Carbon Trust’s incubator programme provides essential expertise and commercialisation support. Rachael Nutter explains.


Two 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 and Lontra is looking to begin another round of fundraising this summer.

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 hoping to attract investor funding. Since its inception, it has supported more than forty. Twenty graduates have already raised private investment worth more than £22m, and three have listed on AIM; three others have negotiated licence agreements.

Working with four incubator partners — Angle Technology, Imperial Innovations, Isis Innovation and TTP — the trust helps companies refine their proposition before approaching investors; in some cases the incubators may help businesses 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 trust’s incubators are currently supporting 10 stage technology companies with a view to achieving successful licensing opportunities or raising equity investment; many more are in the pipeline. companies include Camfridge, which is developing energy-efficient air conditioning and refrigeration products by using metal alloys and magnetic fields, and TMO biotec, a developer of thermophilic micro-organisms that convert sugars present in a range of biomass materials into ethanol.

One of the incubator’s biggest success stories has been CMR Fuel Cells, which has developed fuel cell technology to deliver low-cost, long run-time power solutions for portable electronic products. The company has grown its workforce seven-fold in the past 18 months, listed on AIM and the commercial application of the company’s technology is now in sight.

For technology developers wanting to see their ideas follow a similar route, the trust’s incubator programme may provide a solution. But the selection process has challenging entrance criteria, and businesses must demonstrate steady progress, meeting agreed milestones over time. The trust and its incubator partners are looking for businesses with a combination of innovative, carbon-saving technology, real commercial potential and a strong and committed management team.

The trust’s Low Carbon Technology Assessment (LTCA) identifies those technologies offering 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. They include priority technologies ranging from biomass for local heat and electricity generation to technologies that improve efficiency in industry, such as combustion, process control or process intensification techniques.

Because the trust operates a virtual network, any company in the UK needing strategic and business advice can take advantage of the services. Whether a start-up or spin-out, from either academia or a large company, the incubator programme can provide a wide range of support from assessing and engaging the market, to securing IP rights, to understanding manufacturing options or to getting the correct management team in place.

A number of workshops on accessing funding are held around the country throughout the year, with details posted on the trust’s website. More information on the criteria for successful admission to one of the incubators can be found here.



Rachael Nutter is business incubator manager at the Carbon Trust