Year: 2018

Reasons why things are heating up for the smart home sector

Reasons why things are heating up for the smart home sector

We’ve invested in and supported smart home start-up geo since its inception six years ago. Over that period, the company has gone from strength to strength.

“We’ve developed 25 different products and delivered more than four million energy monitoring systems that can accurately read the energy use of a home in real-time,” said Patrick Caiger-Smith, CEO of geo. “We’re now working on connected, data-driven technology that makes this possible.”

Here are a few reasons why the smart home sector offers ample opportunities for investors and SMEs alike.

1. Cash-strapped consumers are looking for a better way to battle the bills.

The average household bills for heat and energy have been rising since 2003, with all the UK’s biggest energy providers announcing further price hikes this year. “We believe that homes hide numerous opportunities for saving money and energy,” Patrick said. “We also believe that greater oversight about energy use helps homeowners to control the amount they spend on gas and electricity every month. We’re now working on connected, data-driven technology that makes this possible.”

2. It’s backed by the “Big Six”.

The UK’s largest energy providers are already aware of the opportunities within the smart home technology market. In fact, they’re currently part of a nationwide smart meter rollout, which aims to install a smart meter in every home by 2020. So where does geo fit? “Our success has fuelled our reputation for quality in this industry,” Patrick said. “As a result, we have built vital relationships with several energy providers and now work with them to roll-out smart meters to their customers nationwide.”

3. The Internet of Things is enhancing smart home capabilities further.

The Internet of Things may be one of the tech world’s favourite buzzwords right now, but its importance is anything but exaggerated. “Machine-to-machine communication has been lauded for its potential to remove human intervention from laborious, repetitive tasks, such as monitoring, picking and packing, and machine tending,” Patrick explained. “This translates to consumers because it enables their homes and appliances to manage one another, without human intervention.” What’s more, Gartner predicts that more than half of major new business processes and systems will incorporate some element of the Internet of Things by 2020. Now that’s what you call Big Data.

4. The market will keep growing.

According to statista, the smart home sector is expected to achieve a market volume of more than $5bn by 2022. “It also creates new areas of technical development, such as data security and home automation, which could stimulate growth for the UK,” Philip added. “While most of these technologies are still being developed, some are already available in the marketplace, particularly within home heating. This sector forms the backbone of geo and its services.”

Turquoise’s latest white paper, ‘geo: smart solutions for the “hybrid home”’, is now available to download here.


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Tevva Motors: mass adoption of Zero Emission Trucks takes a step forward

Tevva Motors: mass adoption of Zero Emission Trucks takes a step forward

Zero emission cars are now a familiar sight, but there are currently almost no zero emission trucks on the road anywhere in the world.

While cars are generally only used for 1.5 hours per day, trucks routinely operate for over 10 hours and sometimes much more with multiple shifts. Fleets that do operate small numbers of electric trucks tend to use them only for the shortest routes where there is no risk of running out of charge. The problem is that the cost and emissions savings only make sense if these vehicles cover high mileages.

But Tevva Motors, a Chelmsford-based technology company in the UK, has solved this challenge. The company’s 7-14 tonne trucks have a fully-electric range of approximately 100 miles, but can travel far outside their electric capacity using a range extender — a small but highly-efficient internal combustion engine that acts as a generator to recharge the batteries while the vehicle is on the road. This means that operators are happy to maximise the use of electric-only drive, thereby achieving full cost and emissions benefits.

Tevva’s Predictive Range Extender Management System (PREMS) is a cloud-based software package that calculates the vehicle’s expected daily energy requirement based on a delivery plan which is updated in real-time. If a journey is predicted to be longer than the electric range, PREMS will autonomously control the range extender to switch on at the optimal time. For example, a truck travelling into central London would engage its range extender as it leaves the depot outside the M25, switching it off as it approaches the Low Emissions Zone to ensure that there are zero emissions in urban areas.

Having completed a 15-month trial with UPS during which its truck operated like a conventional vehicle (with no range or performance restrictions), Tevva is now preparing to start production to satisfy orders from around 10 logistics companies. The company made a significant step forward in June when it completed a £12m investment round, £10m of which came from Bharat Forge, part of the $2.5bn Kalyani Group and the world’s largest forging company. Bharat Forge’s considerable resources and commitment to powertrain electrification is expected to be of great assistance to Tevva as it scales up to meet strong market demand for low emissions trucks in the future.

Turquoise acted as corporate finance adviser to Tevva on its capital raising.


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Natural Resources Ltd – Plastic-free potential

Natural Resources Ltd – Plastic-free potential

In this whitepaper, we interview James Gardiner of Natural Resources Ltd (NRL). He discusses how new technology can allow pulp paper to provide an alternative to plastic in the manufacture of bottles and other packaging. James also explores how social concerns and new regulatory drivers are helping to promote a more energy-efficient and cost-effective manufacturing process and reduce the amount of plastic ending up in the environment.

NRL aims to create a new and competitive alternative to single-use plastic containers. Having advanced with the development of an energy efficient container moulding process, the goal is to produce a product that can be recycled readily but will also be biodegraded safely and rapidly at the end of its life.

The twenty-fold increase in the production of plastics over the past 50 years, and the evidence that there could be as much as 155 million tonnes of plastic entering the oceans by 2025, is driving the need for NRL’s innovation. With InnovateUK funding the project, there has already been a substantial amount of work on bottles for soft and alcoholic drinks for companies including Britvic and another major brand owner in this space.

 

NRL Whitepaper

 

 


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Fashionable Investing

Fashionable Investing

The role that fashion plays amongst investors is often underestimated. One would be forgiven for thinking that investment policy is driven principally by expected future financial returns but with the rise of ethical investment funds, this is not necessarily the case and perhaps never has been. “Sin” stocks are increasingly traded at a discount and sometimes on a dividend basis, like tobacco and gambling companies were in the early 2000’s.

One could argue that this is because of a lack of perceived growth as their products are shunned or regulation is tightened like with slot machines. Twenty years ago, who would have believed that cigarettes would be socially unacceptable while increasing amounts of money are channelled into the cannabis economy? Casa Verde, the fund in which Calvin Broadus a.k.a. Snoop Dog is a partner, is but one example of this weight of money.

More recently fossil fuel companies have suffered from disinvestment decisions taken by the trustees of pension funds, foundations and even sovereign wealth funds. Look no further than the ethics committee of Norway’s $1tr sovereign wealth fund which has developed a blacklist of firms producing excessive amounts of greenhouse gases. In its view, these companies include cement and steel companies as well as just oil producers.

And after Lehman Brothers filed for bankruptcy in September 2008, bank stocks fell heavily out of favour. The wave of regulation and fines imposed on them in the aftermath of the banking crash is evidence of how much they had undermined the trust of the public. Nevertheless despite the opprobrium heaped on them in the years that followed, they have continued in business as their services have, by and large, proved indispensable to economic life since the twelfth century.

But business does not sit still and over the last two years more and more venture money has found its way into almost any start-up employing artificial intelligence or using Blockchain “technology” for whatever purpose. The best example of the former is the purchase of DeepMind by Google in 2014 for $400m four years after it had been set up. Its founder, Dennis Hassabis, is a new breed of entrepreneur who began his career at Lionhead Studios designing computer games.

The latest companies to fall out of favour, and then some, are those involved in advertising and social media. Their perceived misuse of personal data harvested without the full consent of their owners has been the key issue triggering their change in fortunes. Worse still for them, these allegations have surfaced at a time when “fake” news has already climbed up the political agenda resulting in a number of high profile investigations in various countries.

It is likely, therefore, that this will result in tougher regulation and a higher tax take on their revenues. Such are the vagaries of the market and the penalties paid for being considered “passé” by its participants. In view of the above, I would therefore argue that fashion plays as an important role in investing as it does in the world of haute couture!


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Meet the Turquoise team: David Casale

Meet the Turquoise team: David Casale

Business

What has been the most significant technological development of recent years?

The most recent one.

Humankind’s ability to develop technology is core to our very existence. All technology is significant and limiting ourselves to one perspective on any single technology is meaningless. Penicillin applied right now in many areas of the world would be ‘significant’ and the recent Space X flight is probably also a ‘significant’ moment.

 

What has been the most influential legislative change in recent years?

My sense is that the will of the people drives the legislature which acts as a sort of sweeper behind these memes/waves. The wave currently building is that we need to sort out a transition to a low carbon economy so we see action by well-funded legal groups suing for corporate fraud where, for example and as I understand what has been purported, in 1985 Exxon and others built the Troll offshore oil platform 2m higher to allow for a rise in global sea levels whilst at the same denying global warming existed.

 

How do you see the legislative environment changing through to 2040/2050?

Unfortunately it would appear that the scientists have been telling the truth since 1985 when Mrs Thatcher told the world about the dangers of global warming in her speech to the UN (http://bit.ly/1HAnE9R). Therefore, we are going to see some unpleasant and life threatening events in the period leading to 2040. The wave of public opinion will get very large and the legislature will need to be very robust behind that.

 

How has the perception of cleantech, energy, environment and efficiency evolved in your view in recent years? What do you envisage for the future of the sector?

Our UK industrial strategy needs to create jobs and economic prosperity, and in many ways the development of new industrial technology is more vital today than it has ever been.  In the finance sector we need to work harder to make capital available in the gap between early, Innovate/EIS-type funding and growth capital (which often looks like equity returns for a debt risk). Patient Capital, if you like. In the Turquoise response to the Treasury’s Patient Capital review, we called for a Patient Capital Obligation (PCO) on large institutional investors (e.g. pension funds, insurance companies, possibly also banks) requiring them to invest a small proportion of their overall assets in long term, patient capital funds that target industry sectors that match government priorities. There are various examples of government using such a mandate including in the energy generation sector with the Non Fossil Fuel Obligation (NFFO), Renewables Obligation (RO), etc.

For more on our views on the limitations of ‘Cleantech’ see: http://bit.ly/2D9LM7i.

 

How important are entrepreneurs and leadership in meeting the challenges ahead?

To build business from scratch to becoming major enterprises (leaving aside the desire we all have for a unicorn in the portfolio), requires leadership and entrepreneurship and it seems odd that, like parenthood, there is no real training for this.  Yes, there are MBAs (I have one), and some mentoring programmes but mainly the entrepreneur-leader is asked to be a pioneer (you know, the dead guy lying in the mud with an arrow in his back).  Whilst most new business fail, entrepreneurs are generally over-confident of their ability to deliver – which may well be a requirement for the job!  We see about 100 businesses a year or more at Turquoise, many of which are not investment ready but very few realise it. As the ‘Resident Entrepreneur’ at Turquoise, having co-founded Utilita (a company now employing over 1,200 people), I am always interested in opportunities to get involved with management teams that are struggling with the multitude of issues all new businesses face.

 

From a global point of view, what impact (if any) do you think political change is having on the energy, environment and efficiency sectors? How do you think this will change?

In my lifetime, I have never experienced a period like now where global stewardship through political office is being enacted by such second-rate people.  With a (very) few exceptions, the political class is out of date, detached from the realities of modern life and careerist.

This needs to change and, as an innovator, I would like to see the digitalisation of democracy. Why should the House of Commons spout about productivity whilst still manually counting who walks through the left or right door to vote?!

The Brexit referendum has been held up as an example of why not to have referendums. I disagree; we have engagement, politicians have to do real work, we should exchange the once-every-five-years voting system for perhaps one-every-five-minutes (alongside votes by elected politicians) so many of the actual decisions made by a genuinely cross-party parliament. There has been, and continues to be, very little difference in approach between the parties on most issues. Take Brexit: on one side, ‘we don’t know’, and, on the other side, ‘we won’t tell you’.

Under a reformed system, the electorate would vote for far bolder mandates for industrial technology to meet the global warming crisis than is currently the case.

 

Career

Describe your career journey in a few words

Journey is the right word in my case, consisting of many stations and the final destination not yet in view. I built my own car at 18; that got me a job with Shell International where I worked in offshore gas. I then discovered my independent side so turned down an MBA sponsored by Shell for a funded-by-me MBA at London Business School where they asked me if I was a ‘corporate’ or ‘entrepreneur’ MBA. I said the former; however, as it turned out, for the next 25 years I was mainly an entrepreneur who went on to found four businesses of my own.

 

What are the key ingredients to delivering innovation?

Bravery, ambition and, sorry to say this, luck.

 

What’s your biggest business tip?

Spend sufficient time at the water cooler, photocopier or coffee machine. What I mean is: start networking when you are 6 and never stop; it is your network that brings the biggest rewards.

 

What is your proudest business moment?

In the 1990s, whilst working for National Power, I was appointed CEO of Karaganda Power in Kazakhstan. During that time, we rebuilt the city’s heating system on which hundreds of thousands of people depended for electricity and heat. As an entrepreneur, I wanted to meet our customers directly; however, the largely ex-soviet power company staff were convinced I was insane. Nevertheless, we booked the Coal Miners Institute and, to everyone’s amazement, some 2,000 customers turned up.  One lady, a ‘babushka’, stood up in her fur coat and said: ‘Mr Casale, last year my apartment was so cold I wore this coat inside all winter. Now, since you have made all these improvements, I walk about my apartment naked.’ A moment that has never been surpassed.

 

Who would you like to have dinner with – and why?

My grandfather – he was killed in WWII before I was born.


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