Hamilton, 30 November 2017
Hot Lime Labs has successfully raised its first round of early stage investment to develop its new greenhouse CO2 capture technology for the global market. The investment round led by Powerhouse, with nearly a dozen co-investors including the Flying Kiwi Angels, will allow the completion of technical development and then a pilot Hot Lime system to be built inside a commercial greenhouse to prove the technology at scale.
Hot Lime Labs technology can recover clean CO2 from the burning of waste organic material and then allow this clean and concentrated CO2 to be released into the greenhouse to improve crop yields by around 20%. This will help greenhouse growers to operate at optimal yields, and increase food production while simultaneously cutting environmental harm by using a renewable source of clean CO2.
Dr Vlatko Materić, founder and CEO of Hot Lime Labs says, “This is exciting news for the team. We still have a long journey ahead but with the help of our investors and Board we aim to build a successful global business based in Wellington. We’ve already generated a lot of market interest and identified a number of potential early adopters for the technology.”
Dr Materić says the technology has the potential to increase grower’s revenues by $40-80k per annum per hectare compared to using other sources such as natural gas or liquid CO2. The global market opportunity for the technology is estimated at over $800m per annum and is growing rapidly.
The investment milestone follows Dr Materić’s award from the KiwiNet Emerging Innovator Programme last year to develop a proof of concept for the technology. He received $25,000 funding and support to develop the technology and his capability and understanding of commercialisation, due to substantial donations from the Norman Barry Foundation which is helping 15 researchers take clever ideas to market.
According to Dr Materić, the KiwiNet Emerging Innovator Programme was the critical step to move his research project from the academic arena to a value creating business.
“Without the KiwiNet programme I wouldn’t have been able to turn my research idea into a commercial venture. The initial funding, guidance and credibility the award gave me was critical. It’s always hardest to find the first person to step up and stand by you. I now have an experienced group of people wrapped around the venture along with the funding required to ensure the best chance of success.”
Dr James Hutchinson, CEO of KiwiNet says, “Vlatko’s success really demonstrates how the commercialisation ecosystem can work together to give Kiwi technology the best chance of success through small levels of funding in a highly focused and supported way. The initial support for Vlatko through the Emerging Innovator programme, led to a further $95,000 of funding from the KiwiNet PreSeed Accelerator Fund. This, alongside the ongoing development, mentoring and connections that KiwiNet and its investment committee was able to provide has led to today’s investment round.”
Andy Matheson, Chief Investment Officer, Powerhouse says, “We’re really excited about the potential of Hot Lime Labs. The investment will allow the venture to achieve some critical de-risking milestones around proof of the technology. It will also allow the company to further build its management and technical team as the company progresses.”
Rudi Bublitz, Co-Founder and "Chief Cat Herder" of Flying Kiwi Angels says, “This investment is an exciting first for Flying Kiwi Angels in that it is much earlier stage than we would typically invest in technology of this kind. The commercialisation network helped de-risk the early development and our diligence team gave a strong positive investment recommendation after weighing up the overall risks and returns of this proposition. The enthusiasm of KiwiNet was also infectious. We are founder-focused in all our investments, and Vlatko’s commercial acumen and people skills, along with the strong board he has assembled, gave us confidence that this business has a good chance of success.”
Hot Lime will allow growers to apply CO2 enrichment in situations where otherwise it has been impossible or uneconomical. Current options such as natural gas are limited in terms of geographical availability and cost. Growers will be able to either purchase the system outright, or pay per tonne of CO2 generated at a significantly lower rate than any other option.
Chair of KiwiNet’s Investment Committee Andrew Turnbull aided the investment process. “Vlatko has all the key elements in place - staff, designs, patents, partners, networks of advisors, and now investment. These deep tech ventures that come from our publicly funded research are complex, high risk investments and contrary to popular belief are not sitting on a shelf just waiting for investors to come along. There is a huge amount of time and effort required to get them from a research project into a shape so that they are investable. New Zealand has an exciting and vibrant, albeit nascent, ecosystem that can work together to increase the success rate of these ventures.”
The KiwiNet Emerging Innovator Programme is available to early-career researchers based at universities and Crown Research Institutes across New Zealand. The programme is designed to boost research with a commercial application at a critical time. It also enables researchers to partner with a business and refine their project for market. Recipients also receive expert legal advice from KiwiNet corporate partners, MinterEllisonRuddWatts and IP advice from Baldwins.
John Smith, Chairman of the Norman Barry Foundation which owns the Quality Hotel Parnell Limited says, “One of our goals at the Foundation is to invest in areas that will have a long-term impact for the benefit of New Zealand, so we’re very pleased to support the KiwiNet Emerging Innovators.”
Dr Materić was one of eleven KiwiNet Emerging Innovators acknowledged at a graduation ceremony at the Quality Hotel Parnell on Monday night.
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About KiwiNet Emerging Innovator Programme
The KiwiNet Emerging Innovator Programme was established in 2015 by KiwiNet with the generous philanthropic support of the Norman Barry Foundation. The aim of the Emerging Innovator Programme is to have more scientists with disruptive new ideas working alongside businesses to solve industry challenges. It is open to scientists from public research organisation who demonstrate a clever new idea and a willingness to work closely with industry as they develop a prototype. The KiwiNet Emerging Innovator Programme is available to early career researchers based at universities and Crown Research Institutes across New Zealand.
About the Norman Barry Foundation
The Norman Barry Foundation, is a charitable trust registered under the Charities Act 2005. Norman Barry was an entrepreneur and a philanthropist who established the Quality Hotel Parnell. During his successful business career, he mentored motel owners in Auckland who were new to the industry and helped various charitable organisations in the form of donations. Norman left his shareholding in Quality Hotel Parnell Limited to the Foundation, and the distributions from this Company to the Foundation are used for charitable donations. In addition, Quality Hotel Parnell Limited is also a registered charity in its own right and this company also makes donations to the community.