Christian Vieider is not a man of big words. But when he does get talking, you realise he is up for something important.
His company Stockholm-based Ascatron has rapidly consolidated its business model offering next generation Silicon Carbide (SiC) power semiconductors. A spin-off from Swedish ICT research institute Acreo, Ascatron now employs ten people.
“We had a lot of technology developed within the research institute, but it was not clear who would be the local receivers of this technology,” Vieider explains. Together with three colleagues from the institute, he wanted to bridge that gap between research and market, and founded Ascatron in 2011.
The company quickly needed money. An initial 1 M Euro funding round included investment from all the founders. Vieider says this proved to be a significant strategy when talking to prospective investors. “Nothing is more convincing than if you take some risk yourself. If I can say for example ‘I already put in 100 000 €, are you willing to add another 100 000 €?’ that's much more convincing than any graphs or tables I could show you”, he says.
In order to be able to develop its own SiC semiconductor products, however, 1 M Euro was not enough. On the look-out for new investors, Ascatron was approached by Vinnova, Sweden’s Innovation Agency to take part in EUREKA’s E!nnoVest programme , which promotes innovative companies towards the investment community and facilitates investment matching with experienced investors.
For Vieider, the main benefit of E!nnoVest was a pitch training event organised in Copenhagen. “The feedback I got not only improved my presentations, but also made us think about the way we look at our business; the focus we have on our product and the way we should look at our competitors. So it helped me to get a clearer picture of our business plan,” he explains.
The company now successfully managed to raise a total of 4 M€, which is shared between 3 M€ in equity capital, and 1 M€ in an innovation grant.
What it needs – an innovative technology and investors with knowledge of the market
The market for silicon carbide (SiC) materials in power electronics is growing rapidly because they are cheaper and more energy efficient. The SiC semiconductors developed by Ascatron allow for a radical reduction of electrical conversion losses making the transformation of electric energy from one voltage to another more efficient.
Since this conversion needs to be done whenever electricity is produced or used, the possible applications range from process industry, data centres and electrical cars to wind and solar power.
My advice to other companies is that since we all have limited time available to look at potential investors, try to speak to the ones that already have know-how in your field
Ascatron’s A-round investors are from Italy and China, including the four venture capital investors Quadrivio, Como Venture, Rise Leader Investment and InteBridge Technology, together with the equipment producer LPE. According to Vieider, this is no coincidence, as it reflects the global power electronic industry and interest for silicon carbide.
“All investors have some kind of know-how in our business or technology; all those who had been investing in the end actually already had some interest. My advice to other companies is that since we all have limited time available to look at potential investors, try to speak to the ones that already have know-how in your field”, says Vieider.
Initially sceptical about the possibility of investors from China, Vieider now sees it as a big opportunity. “We see this will help us access a much broader market and maybe go faster to the market. Everything is moving very fast in China,“ he says.
But not everything is as fast as the Chinese market. Vieider suggests that firms looking for investment need to factor in that it may take time for investor funds to arrive. In Ascatron’s case, the time-frame from first meeting until completion of investment was one year. This means that product development and the investor search has to run in parallel.
The first of Ascatron’s semiconductor products should be in the market by mid-2017, and by end of 2017 Vieider wants to close the next funding round. He is starting to look for new partners now.
“We need to raise 5 M Euro next year, and we predict that we will need another 5 M two years later; so we need an investor with some muscle who is in the power electronics field,” he says.