Building Start-Ups In London
A scientific breakthrough is one thing… But how does it go from one good idea to a company that mitigates tonnes of carbon? Issy caught up with Gyen Ming Angel, Director of Venture Building at Prosemino, London’s electrochemical venture builder and one of the only electrochemical venture builders in the world that we know of, to understand a bit more about how venture building works, how to go from idea to market, and share examples of their successes so far as well as the exciting new lab space in Canada Water in London.
Prosemino is making a science of building companies. All their main projects at the moment are battery related, and we think it’s really interesting, so we’re here to tell you their story.
Starting a company is daunting. If you’re part of a university, there might be a business department that can guide you through. Then you’re going to need talent, space, and most crucially money. Venture capitalists (VC) will exchange money for company ownership. You can go through a pre-seed, seed, series A, B and C round all to reach the desired company size and impact. Even then, 10% of start ups fail within the first year.
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There’s a model to do this called ‘venture building’. Venture building is at the earliest ‘pre-seed’ stage in venture capital journey. Venture builders look for opportunities, or problems to solve, either from their experience working with companies and universities or from their own research.
The opportunity identified, they pair up intellectual property (IP) with a founding team, put some money in and a company is born! However, for start ups that involve deep electrochemical tech, they’re normally in need of lab space and would need to hire a lab and buy equipment in order to make any headway.
Venture builders aren’t right for everyone, however, since they could ask for 30-80% of ownership in return for their expertise, which tends to be bigger than other early stage investors. Venture builders in the clean tech space like Prosemino tend to ask for more like 10-30%. Other notable clean tech examples include Deep Science Ventures and Marble.
Prosemino’s model to streamline electrochem company creation
Prosemino particularly focuses on electrochemical solutions to net zero problems, covering batteries, fuel cells, electrochemical hydrogen and interesting things like carbon capture and storage. Crucially, they provide a ready-to-use lab space for their ventures in the first 18 months of their journey.
They provide TLC to their companies: commercial support including finance, legal, talent, etc, all of which would be time consuming to find and expensive for a start-up. According to Gyen, this model of guiding people through the journey only works for Prosemino because of its very narrow focus. Their speciality is the very narrow crossover of company building and electrochemistry and materials synthesis.
Here’s a few examples on how Prosemino can lean in to support early stage ventures…
Hitting the ground running
Jerry Barker, former CTO of legendary UK sodium ion company Faradion, had previously invented and patented the carbothermal reduction method for making LFP which now accounts for 80-90% of China’s LFP synthesis.
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24M Technologies, an MIT spin out, were interested in developing LFP for their uses. Jerry was already sitting on the idea of Redoxion, aiming to focus on LFP synthesis. This partnership was solidified by Prosemino’s team helping to negotiate an agreement between 24M and Jerry, which jumpstarted the early days of Redoxion. The business plan was drawn up, so when the company was incorporated, it was able to get straight to the challenge it was formed to solve. No need to buy and wait for rooms of cell testers to arrive.
Building the product and pitching
Sention is a battery diagnostics company that develops acoustic scanning of batteries to build a 3D image using sound. This non-destructive technique has been optimised to observe small defects, misalignment and other phenomena that lead to battery failures and recalls.
They were the first company in the lab space in Hackney Wick, and have had access to battery cyclers, potentiostats, 3D printers, and everything else necessary to develop their first product. As it was an internally created company, Prosemino has supported it across every part of the business from day 0. Now that it is coming toward "graduation" (raising its seed round), Prosemino's focus has shifted to fundraising, where they help with connecting to investors to maintaining the data room etc.
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Graduation and fundraising
Companies ‘graduate’ by raising their seed round. The CEO and team put together a ‘data room’ with all the admin type documents, the financials, the financial modelling, go to market strategy, technical details, patents - a culmination of the startups journey through the programme on its way to seed. The experience of both being a founder and an investor, allows them to help new companies prepare the best data room they can, ready for VCs and strategic corporates alike. They also open up their networks to help find investors, but it’s ultimately down to the company to convince investors that they are a sensible investment.
Once that money is raised, they are able to move out into their own space and the support continues more like a usual VC arrangement.
Out in the big wide world
The first company to ‘graduate’ from Prosemino was Oort Energy, which was started in Prosemino’s infancy from a small corner of UCL lab space. Dr Nick Van Dijk built the electrolyser company with the support of Prosemino and ERV and within 18 months had raised a £6 million seed round with the backing of both venture capital and corporate investors.
Their 250kW containerised electrolyser in Harlaxton, Lincolnshire, is up and running now with 2MW+ of orders already.
London’s appeal
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Gyen has worked in labs for many years but confesses having learnt a lot in his first journey building one. His team chose purpose built lab and office space since it is fumehood and waste ready, and less complicated than a retrofit office. They’ve just moved into the 2500 square foot wet lab and office space at Canada Water developed by British Land, which triples their total space in London. Their first lab is a dry lab at Hackney Wick with battery cyclers and potentiostats, and they’ve been using the wet labs at UCL.
London is a ‘natural place’ for the company to be based, due to the history of the company being started at UCL, the city’s high concentration of universities, companies and investment capital. If Prosemino grows further, he imagines it will be via a hub and spoke model and expand geographically, with day to day teams running local teams backed up by a hub of expertise.
Final thoughts
Prosemino claims to be the ‘only electrochemistry focused lab venture builder in the world’, which we have not been able to disprove. They’ve made a real science out of finding talent and ideas and pairing it with the capital to see it through. The world needs more people delivering hard electrochem tech solutions.
🌞 Thanks for reading!
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