We all feel the impact of the current situation. Regional differences aside we are all affected, all of our lives are affected and all economies are affected. We got in touch with two of our alumni to find out how they and their start-ups are dealing with COVID-19.
Pedro Silva Humbert from ECO2Blocks (2018 global winner) and Margaux Peltier from Enerdrape (2019 third prize winner) share their stories and insights with us.
To refresh your memory, ECO2Blocks from Portugal develops environmentally friendly, 100% recycled building materials that absorb CO2. And Swiss based Enerdrape is working on the first geo-thermal panel that efficiently captures heat in existing indoor, underground environments and transfers it into renewable heating and cooling for buildings.
What impact does COVID-19 have on your start-up? Can you still continue to work on your idea? Do you experience delays in progress?
Pedro: “We had a pilot, a first paid project scheduled for May in Brazil. That has been postponed until September and we hope our contractor will be able to go ahead by that time. Our team is still small, we are with the three of us in the team and we are all together, working at the same location. There has been no firing due to COVID-19.”
Margaux: “The main impact of COVID-19 is the stop of our technology elevation. We are hosted in the Laboratory of Soil Mechanics at EPFL, Lausanne, the University has closed due to COVID-19 and so our tech-development has completely stopped. This is going to shift our planning for the next months, but we are trying to work on other aspects in the meantime. Finding partnerships and creating contacts is hard within the current situation, all companies are adapting and finding a new balance. It all takes some time. We are not incorporated yet, but as we are university-based, the project will definitely continue. The incorporation will most probably be delayed, but hopefully not shut down.”
How about funding, is it harder now to get access to investors, grants and/or loans? Did you need to come up with an alternative approach?
Margaux: “Actually, I am using this time to apply for grants and prospect funding opportunities. Some investors seem more proactive and accessible and reach out to us during this period, they still want to support greentech start-ups. At the same time, I think health and life science start-ups are the ones that will benefit the most of it, they are going to attract more investment during and after this crisis, maybe at the expense of greentech startups. We are worried about the economical impact of course, some potential users and investors may not be able to invest in cleantech for a while. But on the bright side, I hope that this will lead to a global change in attitude and strategy. I hope the world will not return to its old bad habits… The crisis is showing that countries, municipalities, companies and people are able to commit all together against a danger. Climate change also continues to be a clear and very present danger, and we cannot afford to stop fighting it.”
Pedro: “Actually, we were also able to free up some extra time now to organise our funding strategy and apply for some incentives. For the next 18 months we have been able to secure a mix of incentives and seed investments and now have a 150€k budget available.”
Does this crisis make you rethink your business plan? Perhaps you need to make changes or even pivot in the face of this crisis?
Pedro: “We are not adjusting our business plan, we already did that last year. Right now we are fully focused on what should be done as next steps and we are focusing our energy to attract a main partner instead of a pool of partners.”
Margaux: “We are not changing our business plan either. The problem is still the same and so is the customer need. COVID-19 does not change that. Actually, it may highlight a new argument to the adoption of our technology. For example, our tech transforms an underground garage into a source of renewable energy. It provides renewable heating and cooling and leads to energy and cost savings; for a business in the car-park industry this may also represent an entirely new revenue potential. I believe COVID-19 will force industries to rethink their strategy and to be more flexible. I hope they choose innovation and sustainability.”
What kind of support do you need right now? Is that available to you, did you find ways to get that support?
Margaux: “We need to build our network and get support of industrials for the development of the technology. Help and infrastructure to develop new prototypes. Everything has stopped, and no, we have not been able to find an efficient way to get that support yet.”
Pedro: “Last year we needed and got support to organize our business strategy – we subcontracted that and it gave us a broader view and focused perspective. Right now, we intend to be successful on attracting investors. Moreover, we are depending on our industrial partner positioning after the crisis to see if they can stick with the project plan as intended.”
How has it affected the way you work together with team members, suppliers and others? Has communications with (potential) customers changed?
Pedro: “We were already working remote on a large scale, so nothing new there within the team. Some of our partners used to require personal meetings, but they adapted and are now okay with online meetings.”
Margaux: “We had planned to showcase and make contact with potential customers and partners in different professional events that were cancelled. So that really affected our objectives. Reaching people you don’t know and trigger interest by email is not an easy thing, especially when your email is likely to get lost among all the problems related to the situation. On the other hand, people may be more present on social media and that opens new doors to reach them.”
What are your expectations or predictions for the implications on your business for 2020 and beyond?
Margaux: “We are still optimistic and believe that it will ‘just’ shift the planning, because the need and the problems remain the same, COVID-19 or not. Actually, we develop a technology that is less capital intensive to foster the implementation of efficient and renewable technology. If potential customers have to slow down investing in cleantech solutions, they will probably be even more interested in our innovation. Plus, our beachhead market was Switzerland and with reference to the economic crisis to come, Swiss industrials and customers may be more inclined to invest in Swiss-made technologies.”
Pedro: “We hope and are confident this will mainly be a delay. The demand for cleantech solutions will not disappear because of COVID-19. We intend to start the pilot project as soon as we can and finish it next year. By then we will be ready to do grow bigger and to tackle climate change by entering on the market.”
On a more personal level: how are you and your team members coping with all this? How do you keep moving forward?
Pedro: “In the beginning it was really tough, we felt useless. But pretty soon we realized that by staying home we were making a real contribution to the community. I started a collaborative network with some of my friends to provide food for homeless people in Salvador, Bahia, Brazil, my hometown. Being able to contribute is helping me cope with the situation.”
Margaux: “We are all okay. One of our co-founders is based in the US, so we are used to virtual meetings. The main concern is the development of the tech and the experimental tests we were conducted, we need a physical presence and have no choice but to wait. That is frustrating, but we have to accept that global health is more important at the moment.”
If any, what opportunities to fix climate change do you see arise at this time?
Margaux: “I think making cleantech or greentech economically attractive and feasible is going to be more than a necessity.”
Pedro: “Hopefully, seeing all those differences that the quarantine highlighted to the world people, industry and politicians will start to really ignite a regenerative change. I believe that the “Green Deal” can be the first step.”