How cutting-edge start-ups go from lab to market

Standing in the brightly lit basement of a Richard Rogers-designed building right on the Cambridgeshire and Hertfordshire border, Xavier Moya, a Spaniard, has a glint in his eye.

The professor of materials science at Cambridge University is remembering the year his parents installed air conditioning in their home in Barcelona, easing the summer heat while he studied for his exams.

After more than 20 years of further study, he is in a position to revolutionise that air conditioning system, removing the harmful greenhouse gases they use and emit and making it smaller and more efficient. But he’s not going to, at least not yet.

Working with Andrew Burrows, an energy and utilities expert at PA Consulting, which helps academics and start-up founders take their ideas from the lab to the market, Moya has realised he must first prove the commercial worth of his breakthrough in other markets that are less price-sensitive than home cooling and heating.

It means that Moya’s Barocal venture is now targeting commercial heating and cooling systems. PA Consulting knows that the existing industry players will like the idea as it offers them the chance to lower the operating costs of their systems and promote their green credentials, which will offset the higher upfront cost of the new technology.

Gas, liquid, and pressure are normally combined to cool and refrigerate things, but Barocal has come up with a completely different process. It uses a solid technique called the barocaloric principle, which is more efficient. Its solid refrigerants are inexpensive and are able to use pressure to cycle between hot and cold states, which makes polluting refrigerant gases redundant.

Professor Manish Tiwari, co-founder and chief science officer at ADN Coatings, has been on a similar path to product-market fit, again guided by PA Consulting. His original vision for the spin-out from University College London was to apply his new nanometer scale coating that repels liquids, dirt and grease to the underside of aeroplane wings and to medical devices.

But advised by Viju Vasishta, a sustainable materials expert at PA Consulting, he learnt that large textile and carpet makers, as well as those supplying technical wear to nurses, firefighters and even adventurous hikers, were crying out for an organic material that could perform as well as existing plastic-based alternatives and which enabled them to meet strict new environmental rules.

These are designed to tackle what are known as PFAS, which are inert, synthetic molecules that do not degrade and more recently have been found to be toxic. They feature in most places where manufacturers have added a protective liquid repellant layer, such as waterproofs and non-stick saucepans. “It is not that we have to stay away from medical devices and aeroplanes forever, but the barriers to entry there are steeper,” says Tiwari.

Their moment of clarity is a common step that many entrepreneurs have to take. Paolo Siciliano, a biotech expert at PA Consulting, says while investors like the sound of start-ups that own the intellectual property to platform technologies, which could be applied to many different problems, they also want reassurance that the entrepreneurs have the discipline to focus on one at a time and to nail each one in turn.

This isn’t as much fun as chasing each shiny new application and proving the science works. But it is good business. ADN expects to be revenue-generating next year, just 18 months after it was incorporated, and is finalising its £1.6 million seed round of investment now.

Both have benefited from being guided by a consultancy that has the ear of their potential future customers. Frazer Bennett, PA Consulting’s global head of innovation, gives ADN as an example. “Our clients are telling us that PFAS are really important to them,” he says.

Armed with that knowledge, the consultancy actively seeks out start-ups operating in the space and selects a few it thinks have the most promise to work with. This is done for a fee, which can range from a few tens of thousands of pounds for a specific piece of work to several million for a larger and longer project. A tour of PA Consulting’s black and white-checked Global Innovation Centre, 13 miles south of Cambridge, illustrates the heft it can put behind early stage companies.

Bennett also shows off the firm’s work in quantum technologies. While quantum computing is still a few years away as companies battle to improve their reliability, the technology’s use in communications is already here. Antennas to pick up radio waves are redundant; instead vials of caesium massaged by lasers detect changes in radio frequency, which can be accurately turned into messages. As the receivers can be made without metal parts, they will be invisible to radar, making them interesting to government buyers.

“It’s as transformational as Marconi,” says Bennett, referring to Guglielmo Marconi, the Italian engineer who achieved the first transatlantic wireless transmission in 1901 and whose work is the foundation for modern wireless communications.

Jamie Stone, a sustainable packaging expert from PA Consulting, shows how they have helped a Swedish start-up called PulPac develop its dry molded fibre packaging technology as a replacement for single-use plastics. The processes Stone and his team have helped build prove to manufacturers that biodegradable cutlery, bottles and packaging, including containers for fresh steak for sale in a supermarket in Australia and blister packs for headache pills, can be made quickly, cheaply and have a level of performance that matches plastics.

The raw material: fluffy material from Norwegian spruce that takes on a rigid form when placed under the pressure of an industrial stamp. Bennett says the starch required for the process could come from other waste sources, even discarded pea pods and orange skins.

The technology is one step away from full commercialisation, says Stone, but PA Consulting is so confident it has built a 30,000 sq ft plant in Royston, Hertfordshire, to show it can be produced at scale. It has also garnered interest from firms such as Haleon, Sanofi, Bayer and Diageo, introductions that start-ups normally struggle to secure. These companies are paying PA Consulting to help PulPac prove the technology, taking the exclusive rights to use the packaging in specific areas. PulPac, which has raised over €46 million in venture capital since its launch in 2018, takes a licence fee for whenever its technology is used.

About half of PA Consulting’s innovation team’s customers are young companies, although the majority of its revenues come from working directly for the likes of Diageo, P&G, Unilever and eight of the top ten global pharmaceutical companies.

Siciliano says the common mistakes they see founders making include that lack of focus on solving a specific market problem that people will pay for. He also advocates the selective use of experts at an early stage of product development, especially when founders have raised some venture capital and need to move quickly.

His argument is that spending half a venture raise on working with PA Consulting to bring a product to market might be money better spent than hiring a mechanical engineer, chemist or business development professional. There is no guarantee new recruits will work out, after all. PA Consulting can’t provide a guarantee either, but from the facilities it has on offer, it is worth checking out.

There are, however, few short cuts to coming up with the breakthrough science in the first place. Moya says his eureka moment for his solid refrigerant came in 2015 and he patented the chemistry in 2016. Since then he has worked hard to make his vision a reality. You can tell he remains hopeful that one day he will see his technology used in both domestic heat pumps in the UK and green air conditioning to address those hot summers back in Barcelona.

This article was first published in The Times.