From hydrogen to yeast: B.C. tech startups get a helping hand
Credit to Author: Randy Shore| Date: Fri, 04 Oct 2019 18:41:39 +0000
Grace Quan was standing on the highest peak in Africa when it came to her: If the hydrogen economy is to arrive in earnest, she will have to make it happen herself.
“In 1997 I decided the next car I was going to buy would be a Jaguar with a Ballard fuel cell,” she said. “Fifteen years later I was at the top of Mount Kilimanjaro and I still had no vehicle, because I had taken that vow.”
She descended the mountain and began to climb an even steeper hill.
She wondered: What’s the holdup?
The hydrogen fuel cell has been around for years, thanks to B.C.’s pioneering Ballard Power Systems. Fuel-cell stacks are a mature technology and their products are being rolled out around the world, including 1,000 transit buses in Europe.
Vancouver is a little behind, with just one hydrogen filling station, though six more are in the works.
Hydrogen can be made from water, or even better, from natural gas using a process that allows carbon to be captured. No real problem there.
“As soon I looked to see what was holding up the hydrogen economy, it was right there: hydrogen storage,” said Quan, CEO and co-founder of Hydrogen in Motion (H2M). “What nobody was looking at in 2012 was how to move it. As a pressurized gas it makes no sense.”
The pressure required to compress hydrogen is immense — around 10,000 pounds per square inch — so the tanks have to be incredibly heavy and dense.
“That makes it expensive to store and expensive to transport,” she said. “The tanks you might put in your car would cost around $5,000. What does a gas tank cost, $200? You can’t sell a $30,000 car if the fuel tank alone costs $5,000.”
Plus, hydrogen tends to “boil off” at a rate of almost one per cent a day, saddling the consumer with continuous fuel loss.
Hydrogen in Motion has devised a nano-material that acts like a sponge, absorbing hydrogen for easy storage at relatively low pressure. Release the pressure and the hydrogen flows out.
Grace Quan is CEO of Hydrogen in Motion, a B.C. startup company that is developing hydrogen storage systems.
The firm is just emerging from the research and development phase and is in the process of building a lab in Burnaby to scale up the tech.
“There is a lot of interest in our technology, but we are just in the process of raising funds for the prototype plant and from there we will need a large-scale plant,” said Quan.
New rounds of financing will be required at each stage of the process, starting at around $500,000 in seed money, at least $7 million for small-scale manufacturing and then $50 million in equity financing, loans and government grants to build a full-scale plant.
It’s crucial that startups don’t trade away too much equity to finance each stage or there won’t be much left at the end.
Hydrogen in Motion has a compact staff of eight and two of those positions are co-funded by Mitacs, a non-profit that facilitates partnerships between academics at Canadian post-secondary institutions, private industry and governments.
Mitacs pays half the salary of students and post-doctoral researchers that H2M hires through Simon Fraser University to work on research questions in physics, kinetics and materials research.
“For SMEs (small- to medium-sized enterprises) acquiring talent can be a challenge when you are competing against major players with a lot of cash flow,” said Jesse Vincent-Herscovici, vice-president of business development at Mitacs.
Finding the right people is one thing, paying them is another.
“If you have a really interesting technology, bigger players may be interested in providing financing as part of an equity play,” he said. “But diluting equity too soon can leave you with little or nothing to show at the end. The farther along you are with your technology before you have to take on an equity investor, the better.”
Mitacs has spent 20 years developing a platform that matches Canadian academics on the cutting edge of their fields with companies that need to tap into very specific skill sets to answer specific research questions.
Funded by the federal and provincial governments, with support from 70 Canadian Universities, Mitacs has facilitated more than 8,000 internships in British Columbia and 32,000 across Canada.
With Mitacs, companies can engage with scientists and their entire research teams, with students and post-docs splitting their time between the industrial environment and the academic environment.
“Bouncing between them is a powerful mechanism that creates porosity between those worlds,” he said. “That human bridge is the secret sauce at Mitacs.”
Access to capital is a real bottleneck for the growth and survival of SMEs.
“You have to have enough money to keep the lights on,” said Vincent-Herscovici. “We don’t bring equity financing, but we share the costs of research partnerships upfront, so we help companies stretch their cash flow.”
It remains frustratingly rare for companies to grow from startup to mature multinational firm in B.C., but quantum computing software firm 1QBit is making strides at 100-plus employees.
B.C. also lags Alberta, Ontario and Quebec in the percentage of post-secondary graduates with a tech degree, which can limit or slow a company’s growth.
“1QBit worked with Mitacs almost from the beginning,” he said “(Quantum computing) was controversial at the time, but we helped them put together an R&D team in an affordable way.”
They have now secured international partnerships — for instance with Microsoft — and are starting to do great things.
Part of the value proposition with smaller firms is their ability to pivot when markets and technologies take surprising turns, said Vincent-Herscovici.
Renaissance BioScience has built a sustainable business model selling genetically optimized non-GMO wine yeast, while dabbling in less intuitive applications for their flexible fungi, he said.
When the company was founded six years ago Renaissance licensed technology from American researcher Linda Bisson to produce wine yeasts that don’t produce bad-smelling hydrogen sulphide.
“We used that opportunity to fine tune other attributes of the yeast for really high-performance winemaking,” said Matthew Dahabieh, chief science officer at Renaissance BioScience Corp.
Matthew Dahabieh inside Renaissance BioScience Corp at the University of B.C.
CEO John Husnik had completed his MSc and PhD in the van Vuuren lab at the University of B.C.’s Wine Research Centre and, after founding Renaissance, leveraged his experience to put viable products into the market almost immediately.
Since then, Renaissance has grown to 25 employees occupying 7,500 square feet on campus.
Business in the beverage space is good. With 11 high-performance yeasts for wine and cider already in the market, Renaissance will launch four craft-brewing yeasts this November at the BrauBeviale trade fair in Germany and four more in the new year.
“Our brewing yeasts will allow craft brewers to make any style of beer under the sun,” said Dahabieh.
Yeast is a remarkably flexible organism, one that can be programmed to produce an amazing array of products. Renaissance is unlocking its potential.
“People are using yeast to produce all kinds of high-value chemicals that replace equivalents made from petrochemicals or from natural sources that produce just tiny amounts, such as vanilla,” he explained.
Renaissance is working to improve yeast used to produce biofuels such as ethanol, a task at which yeast excels.
They have also licensed a yeast for use in the processed-food industry to reduce the formation of acrylamide, a carcinogenic compound formed when starchy foods are fried, baked or roasted.
Do you like golden brown french fries better than raw potatoes? The Maillard reaction is why.
The famous Maillard reaction creates dozens of novel compounds that produce much-sought flavours and aromas. It also produces acrylamide.
But acrylamide is increasingly considered a bad actor in human health and there is a regulatory movement afoot to limit its presence in foods, particularly in Europe.
Acrylamide-reducing yeast is a delivery vehicle for asparaginase, an enzyme that breaks down asparagine, the compound that is converted to acrylamide during the Maillard reaction, he said.
Food manufacturers can simply mix acrylamide-reducing yeast into their dough or even soak potato chips in a solution of the yeast and water before cooking and reduce acrylamide levels by 70-95 per cent in their products.
The company is also in early stage research to produce yeasts that both produce and deliver RNAi bio-pesticides to crops and animals that are incredibly specific to the target pest.
Renaissance has used Mitacs partnerships to advance their non-GMO genomic platform, including a $1.4-million partnership with three UBC researchers involving 20 post-doc and student researchers.
“Sometimes we have a specific need to answer a specific question and they have a technology or a model that can accomplish that,” said Dahabieh. “The RNAi technology is a good example.”
The young researchers split their time between their home lab and Renaissance, which opens up great opportunities for “cross-pollination,” he said.
• 10,000 companies.
• $29 billion in revenue.
• 8,222 companies with fewer than 10 employees.
• 447 companies with more than 50 employees.
• 106,000 jobs total.
• $1,690 average weekly earnings.
–Source: 2018 B.C. Technology Report Card