Eco Investor June 2011


Eco Innovation Forum 2011 - Smart Solutions Meeting Smart Money

By Philip Thomson Eco Investor Media

A strategy for a low carbon emission future may still not be finalised at government level but this did not stop a significant group of government agencies, business angels, venture capitalists, fund managers and a large number of companies developing environmentally positive products and services meeting in Sydney to discuss the future of the eco positive industry.

The editor of Eco Investor, Victor Bivell, opened the Eco Innovation Forum outlining how the industry continued to show innovation, returns on investment and a bright future as the industry anticipates a formal low carbon future.

Federal Government sentiment is certainly directed to an environmentally positive future and this was reinforced by a presentation from Kerry Rooney, General Manager, Export & Investment, Austrade. Austrade is committed to contributing to trade and investment to help meet Australia's commitments to alleviate climate change.

Ms Rooney outlined how clean technology investment throughout the world is still growing strongly, with wind the leading sector for investment, and Australia is still the third largest investor in clean technology products and services in the Asia-Pacific region.

Certainly, government initiatives including Commercialisation Australia, demonstrate public policy efforts which can help in commercialising environmentally positive products. To date, Commercialisation Australia has allocated just under $45 million in grants to 115 successful applications, according to Doron Ben-Meir, the CEO of Commercialisation Australia.

Because so many early stage businesses were at the Forum, the interest in varying funding platforms was significant. Paul Niederer of the Australian Small Scale Offerings Board (ASSOB), who have raised over $130 million for over 220 businesses, offered an overview of how investors move from friends, family, followers and fans to venture accelerators, capital raising platforms, angel investors and finally venture capital funds. The social proof investor support model demonstrates how the Australian Small Scale Offerings Board can generate funding opportunities for many small businesses.

The venture capitalists that Paul Niederer alluded to include Cleantech Ventures who have two funds under management in this sector, the Cleantech Australia Fund of $50 million and the CEGT Fund (Centre for Energy & Greenhouse Technologies) of $30 million. Cleantech Ventures have a range of environmentally positive products in their portfolio and Mark Bonnar, the Investment Director of Cleantech Ventures, featured Metallic Waste Solutions (MetSol), an industrial process recycling company recovering zinc oxide, and Ilum-a-Lite, an energy efficient lighting product and services company as success stories.

Another venture capitalist, Starfish Ventures, outlined what industry sectors are hot in the market place at the moment and what is not. A bold list presented by Ivor Frischknecht, the Investment Director at Starfish Ventures, includes the hot sectors: solar energy, wind management/ optimisation, energy demand management, energy efficiency and energy storage - and of course, those industries that are not: fuel cells, hydrogen, biofuels, waste management and water efficiency - an interesting list.

Kixstaart Innovation Group provides seed and early stage equity, management, mentoring and marketing for start up ventures through its Kixstaart Innovation Centres. John Rivett, the founder and Group Managing Director of Kixstaart Innovation Group demonstrated how the Kixstaart early stage platform can help develop the eco positive sector. The entrepreneur's skills list of the seven skills, innovation, production, marketing & sales, distribution & logistics, management, financial control and fundraising was the message from Mr Rivett on characteristics of successful entrepreneurial companies from his extensive experience and network of companies. If an innovator does not have this skills set, then they have to buy it in. Bio Cane, a company involved with the Kixstaart Innovation Group, showed how premium cattle feed can be developed from discarded sugar cane refuse.

Innovation means that Intellectual Property has to be protected. Justin Blows of patent attorneys, Griffith Hack, illustrated how businesses need to protect their intellectual property (patents, trademarks, designs and trade secrets) to increase their value in attracting investors, particularly venture capital, potentially at a lower cost. Australia's clean tech industry has minimal registrations in intellectual property which is concerning in the information age, according to Mr Blows.

The federal government's commitment to low emission initiatives was further demonstrated by professor Mary O'Kane, the Chair of the Australian Centre for Renewable Energy (ACRE). ACRE has two funds of $100 million each to help develop technologies that reduce emissions in energy generation. The two funds, the Renewable Venture Capital Fund and the Emerging Renewable Program, are offering funds for low emission outcomes as part of the Australian Government Clean Energy Initiative. The Renewable Venture Capital Fund capital will be assigned through venture capitalists.

Apart from angel investor platforms such as the Australian Small Scale Offerings Board (ASSOB) and the Kixstaart Innovation Group, government departments and venture capitalists, the event also featured some environmentally positive innovative companies.

Sylvia Tulloch, the chairman of EcoQuest, a company developing biodegradable nappies, was also the founding managing director of Dyesol Limited (and now a non-executive director and a major shareholder), a dye-sensitised solar cell (DSC) manufacturer. Ms Tulloch outlined a history of developing a high technology business over 20 years to become market ready, as Dyesol is now close to achieving.

The second of the three eco innovation companies was BioPower Systems, with designs for large scale wave technology electricity generators. The designs, as big as 50 metres tall, capture wave energy at depth and not just at the surface. BioPower Systems also offer a lock down system to minimise damage in heavy seas. BioPower are looking for investors, as their Port Fairy pilot generator is approaching the building stage.

The final eco innovation presenter on the day was BuildingIQ, who offer software and services on a subscription basis to manage buildings in an energy efficient fashion. Certainly, BuildingIQ is riding the wave of interest in the development of "green buildings" as energy costs and returns on investment by building owners are both major concerns.

The eco innovators who presented at the Eco Innovation Forum are all exciting companies, and there is a myriad of other companies developing other exciting technologies throughout Australia.

In regard to research and development, research has never been Australia's weakness. Development has always been the "hard part" for a smallish economy. Government initiatives are showing some encouraging signs in the environmentally positive industry sector. Austrade is bringing the developed technologies to the world. Investment platforms such as the Australian Small Scale Offerings Board and Kixstaart Innovation Group are taking up the business funding, investment and development challenge and with environmental concerns and energy costs only becoming more acute, the focus on eco innovation will become more important.





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