The signing of a green coke supply agreement with New Zealand Steel is the validation Marlborough-based clean-tech company CarbonScape has been looking for.
Next year's trial shipment of the new energy source will help New Zealand Steel reduce carbon emissions at its steel-making operation in Glenbrook.
CarbonScape, using proprietary microwave technology, converts biomass such as forestry waste into carbon products, including activated carbon, graphite and green coke. The Blenheim company is in the process of securing investment to enable expansion to commercial production.
For the firm founded in 2006 by Nick Gerritsen and Tim Langley, this is a big deal.
It gives them the validation they need to find some big-hitting investors.
What New Zealand Steel is doing with its agreement with CarbonScape is investing in time and resources and it's as valuable as cash, says Gerritsen.
"It's market verification."
New Zealand Steel is owned by large listed Australian company BlueScope Steel. "Not bad for a small company like CarbonScape," says Gerritsen.
The owner of Crispstart and a former commercial lawyer specialising in intellectual property strategy, Gerritsen has been commercialising New Zealand technology startups since 2002.
The Picton-based entrepreneur is talking to clean-tech and climate change funds, to large industrial players and a number of conglomerates in his search for funds.
"There's no perfect way of doing it," he says.
"Success is not defined by how much money you raise - success is about getting the technology to market and building a business.
"It is about having the right money at the right time."
Financial support for the business, which will only start making a profit from the New Zealand Steel deal, has so far come from a number of high net-worth investors in the UK, Australia and the US.
Word of CarbonScape reached them through its relatively high profile, helped in 2009 when it was runner-up in the FT Climate Change Challenge and received the judges' choice award.
"That put us on the international map," says Gerritsen,
Last September, the company was runner-up in a global green technology contest in New York. The $150,000 prize money was used to get green coke into full production.
The key for CarbonScape is making products that are economical since there are no subsidies for it to rely on, says Gerritsen.
CarbonScape employs four people, microwave scientists and directors Gerritsen and co-founder Tim Langley, who play executive roles.
The New Zealand Steel deal opens up opportunities for new development and increasing the operation's scale, says Gerritsen. There is interest from other sectors in other CarbonScape products. Gerritsen is optimistic about finding funding.
"One thing I have learned over the past 10 years is you have to have multiple conversations. The question is which one crystallises. There is huge mobilisation of capital towards this area."
The money seems unlikely to come from New Zealand.
"The innovation market in New Zealand is in the early stages. We don't have the expertise to look at CarbonScape and value it. We tend to be compared to Moa Beer or Ecoya," says Gerritsen.
And if you are not producing revenue, that stymies people.
When raising finance, focus on getting to a point of proof rather than making complex business plans. You have to have a proven technology and to know where to sell it profitably.
Best business achievement
Engaging seriously with multinational companies.