Is Venture Capital Built to Break Founders - Amrit Chandan @ Lorefully

Speaker A: The cap table, to me, is the villain in the story.

Speaker B: Investors have agreed that, uh, you need to step aside as the, uh, leader of the business. If you don't agree to this change, they're not going to fund the business. But this is not a command. This has to be your choice.

Speaker A: Amrit chandan built a $19 million battery startup backed by Toyota, lost it to his own board, and started over. His new company lawfully uses AI to capture expert knowledge at industry events and is already profitable. You thought commercializing this by actually selling batteries? You didn't want to just sell the process?

Speaker B: Selling the intellectual property would have the best thing to do with it. Imagine how much further ahead we would be as a human race if we had access to all the genius of our predecessors.

Speaker A: Amrit, uh, welcome to the Founder Thesis Podcast. You look like a desi, but you don't talk like one. You talk like a gora. Tell me, who is Amrit?

Speaker B: Thanks, Akshay, for having me. Uh, so my family were really fortunate to come to the uk. Uh, so my grandparents on both sides, my, uh, my Nanaji and my Pitaji, they. They both came via Africa. So in the 1950s and 1960s, the UK government did a call for people to come and work in the factories in particular. And so they. They came via Africa. So they.

Speaker A: How did the, uh, Indian diaspora reach Africa? I've always been curious. I mean, of course, we've all seen the movie Gandhi where there are Indians in South Africa, but you've come from a family which migrated to Africa. What was the motivation for Indians to go to Africa?

Speaker B: I think it was access to opportunities and access to jobs in particular. So there was a calling in particular. My grandparents on both sides, they went to East Africa, to Kenya. Uh, and my Pitaji worked in the postal service. Um, and they were there sort of as a postmaster before. They then came to the uk. So there was a further calling. They wanted people to come to the uk.

Speaker A: So this was like, in the colonial Raj. Like, there was that colonial Raj in Africa as well. And the jobs were there.

Speaker B: Yeah, so this was just after independence in. In India. Um, so this was in. Yeah, this was sort of late, late 50s. Um, and then they. They went across to the UK. But, yeah, Kenya was still, uh, part of the empire.

Speaker A: And what kind of work did they do once they landed in uk?

Speaker B: So they did whatever job they could find. So, uh, mostly was factory work. Um, so they worked and typically in multiple jobs at the same time. So three jobs. And, um, I think at that time, in the uk because there were so few people like us here. Communities would come together, stay with, with each other, and slowly they brought the whole family over to the, to the uk. So my, my dad's generation, there are uh, five brothers and then there are four sisters. And um, my, my, my dad is one of the youngest in the, in the family. And so they, my dad was actually. My dad was born in India, but then came to the UK when he was two or three years old. Uh, but some of my, some of my, um, Thayers, um, they were born in Africa and then came to the uk.

Speaker A: And what did your dad do? So your grandparents were in factory jobs and I would assume lower income strata. Uh, what about your dad?

Speaker B: They moved into, um, owning a shop and sort of having a retail background. Um, my dad trained as a eye doctor, so as an optometrist and then worked, ah, and worked then had his own practice for a long time, working as an optometrist, ah, for his whole career.

Speaker A: Classic, uh, immigrant story.

Speaker B: Yeah, it's really interesting because we see this. There's a big swing. You have this highly entrepreneurial generation who left everything they knew. They left, they left family, they moved to a country or they didn't speak the language, they look very different and they took a huge risk in doing so. And then, um, you almost have a, and this is culturally, not necessarily in my family, but just as a culture is something I find really fascinating. Um, you almost have a sort of loss of that entrepreneurial spirit because the elder generation said, well, actually we've done all the hard things so you don't have to sort of train, become a professional, um, and then make it better for the next generation. Uh, and then it's. Yeah, it's interesting because in the UK there is always this challenge you hear within the capital giving communities like the venture capital and the debt markets, where they say, why are there not enough ethnic minority South Asian heritage businesses coming forward that we can fund? And some of that is because I think there's generally a cultural view about debt as a whole. So lots of people say, don't ever take on debt, fund your business yourself. And then some of that is because I think there are fewer business or have been fewer businesses, but I think that's swinging in the other direction now. So that legacy is a very interesting one, but hugely grateful. And it's driven everything that I've done to date. Because whatever I do, I always think my grandparents worked really hard to make it better for my parents generation. My parents have worked really hard to make it better for us. So what am I doing for the next generation?

Speaker A: You're a devout Sikh.

Speaker B: That's right, yeah.

Speaker A: Okay. And um, like, was it hard being devout in uk?

Speaker B: It's easy in a way because this is the only path we've ever known. Um, but it's hard in a way because the system is not designed for people who look very different. Um, and so I remember growing up, you know, I've experienced racism in my life being here in the uk, um, even even recently, like in the last couple of months, years, you know, there are still things that happen that uh, because I look different and because I am different, I can tell you for sure. As an example, actually, if I go to the airport, I will, or I will have a 100% chance of being checked in the random checks that they do.

Speaker A: Okay, okay.

Speaker B: It has its advantages as well because, because I do look so different. Like in a business context, I go to a meeting and chances are there are people who remember me because I've been there. Um, but then, yeah, it has, it has its advantages for sure.

Speaker A: Yeah. Yeah. So growing up, uh, did you want to do entrepreneurship or what was the aim?

Speaker B: The. This is the interesting thing actually. I think seeing how hard my parents worked and seeing how hard my grandparents worked, I always thought the career for me was going to be something professional, um, something perhaps in a corporate job. I think at one point I was interested in law and becoming a lawyer. Um, and so I did not have a desire to do entrepreneurship and I ended up the journey of how I got here. So I did my undergraduate degree in chemistry and then at the end of that process I'd worked really hard to achieve my degree and um, I managed to get a first class honours degree, um, from the University of Birmingham. M. I think I was top in my class. Um, but the global financial crash happened and I remember applying for jobs and the way the system works in the uk, you have, you do this, uh, you have these graduate training schemes and I found the process of applying to be so inhumane, a complete lack of humanity because you have to put all of your information into these online forms and you have to answer essay style questions and then you do all of this effort and then at the end of it they say, um, if we're interested in your application, you'll hear from us in two weeks, otherwise assume it's not going to progress. So you don't even get the courtesy of an email or a message to say, sorry, it's not going to work. And I found that process. So, uh, as I say, inhumane that after sort of doing. I did one application and I said this is not the path for me. I'm going to work out my own path. And then I had an offer for doing a PhD. Um, so I went into that in chemical engineering and this was in the topic of hydrogen technologies, which um, at the time we thought was going to be the future and certainly will have a part to play in the energy transition. And while I was doing that, I decided I wanted to try um, my hand at sort of entrepreneurship. There was a grant from the university, so they gave, I think it was like 500 pounds, uh, amount of money. And they said, um, use this money, see if you can start a company. What can you do with it. So myself and one of my PhD friends who um, I'm still very good friends with today, Scott, we ended up starting a small consultancy, um, on the back of our research. And we won some clients doing that and got a taste for what that entrepreneurship, that entrepreneurial journey was like. So that was my first foray in. And that was sipping from the poisoned chalice of knowing what that freedom is like and knowing what that, what uh, it, what it. That. That sort of the dopamine of, of making a sale and making a difference in the world.

Speaker A: You did not want to scale that like that. Like that wasn't something which excited you, just continuing to do that consulting gig business.

Speaker B: It was a really interesting option. Um, I think so. The other thing that happened around that time, we had a UN scientist who came to our research group and he told us that the world was beyond saving. So he gave this bleak talk. He said the world is gone. He said there's no point, don't even try. He said, just live your life as you want to live it and it's all going to end anyway. And it was so sad to hear this again. That sort of what can I do for the next generation? I knew that I wanted to dedicate my life to trying to make a bigger difference in the world. And so the consulting work was interesting and we won some big projects and things were moving. Um, but I felt like I wanted to do something bigger. And then the other part was my co founder in that Scott. He was awarded, uh, an opportunity to work in University of California, Davis, um, where he joined the Institute for Transportation Studies. And, and he's still there today. He's now, I think, assistant director or associate director of the whole institution, which is fantastic. He's really gone on a meteoric rise, but it Meant that continuing on the business together would have been really difficult. And so we'd agreed before he went out there, we'd said, well, we'll try it, see if we can continue working together, but if it turns out it doesn't work, then we'll part ways as friends and the business will, will wrap it up and move on to other things. And that's also what ended up happening. Because he was doing so well there and getting so involved in the research, it just made sense for him to carry on doing that work. And so that left the opportunity to find something else. So it was around that time I was then given the opportunity to work at the center of Excellence in Hydrogen Technologies as a consultant. And it was because of that entrepreneurial experience I got to do that. I was given the job there. And that's where I met the co founder of Acceleron, my first startup. So this is Carlton, he's from Barbados, another part of the Empire. We had that shared experience of the legacy of the British Raj. Um, uh, the British Empire. And we both. Acceleron started out as a lunchtime conversation. I said to Carlton, I want to start a company. I know that working for another employer long term is not for me. And he said the same thing. He said, I also want to start something. And then he had been working around batteries. He was a really big enthusiast of batteries, still is a big enthusiast of batteries. And he'd been doing his own electric bike conversions in his, in his student flat. And uh, he said, I think there's something interesting in this technology. And then we started a process. So we met for the first time in September of 2015. And then in October, November 2015 we said, there is something here, we should explore it more. And the way we started, we didn't have any money to put to this. We didn't have, uh, any resource. So we started out by finding as many different competitions as we could and entering them.

Speaker A: Like business plan competitions.

Speaker B: Business plan competitions, awards, um, conference awards, anything we could find. We were just sitting. This is before the days of AI. So it was a case of manually checking everything, writing these applications, going for the interviews, doing the whole process. And we were doing that for two reasons. One or three reasons. One, because we didn't have any resource and we wanted to get. And some of these competitions had cash prizes. Um, two, because it was an opportunity to test the idea and improve the idea because each time the idea was being put in front of experienced judges. And three, because we wanted to raise the profile of the idea as well. And what we were doing so that it would make it easier to launch.

Speaker A: What was the idea?

Speaker B: So the idea was all, uh, ah, Carlton had invented this technology which was how you assemble battery cells together into a module. So um, he had come up with this way that was using really simple technology because he wanted it to be simple. And he was originally applying this to his electric bike. So he had a normal bike and he was converting it to electric and he was. We started out by using battery cells that were considered waste. So these are lithium ion battery cells that were no longer sort of. They'd been used once, didn't really have much of an application. And we were taking those and testing them and using them. And so we had this uh, framework of the technology. And that's where it started out.

Speaker A: Uh, I'm still not sure what's special about the product. You're saying that you had a simple to assemble battery. Is that what's special?

Speaker B: Yeah. So the way lithium battery modules are assembled, they use lots of permanent techniques. So spot welding, they use adhesive, they use um, uh, structural elements. And what that means is they are incredibly difficult to take apart once you've assembled it. The analogy I used to use a lot is imagine you're driving down the road in your car and let's say the tire bursts and you have a flat tire. Imagine if that tire and the wheel was welded to the car and you could not repair the car. You had to throw the whole car away, even though it was just the tire that stopped working. Like, it doesn't make any sense to do that. But this is what happens in batteries. Lithium modules are made with these permanent techniques. You have an array of cells, lots of cells. And it's just a few of these that maybe don't work as well. But because the whole thing is, uh, just a single block, you can't get into that without destroying it. And so what was unique about what we had was it was a compression technology using simple nuts and bolts. And we were able to, we were able to, um, take components out, put them back in service and maintain these modules over time.

Speaker A: Uh, this would only work for higher capacity batteries which are made of 50, 100 cells.

Speaker B: So the smallest module we ever made was um, around 50 watt hours. So, uh, relatively small.

Speaker A: And how many cells?

Speaker B: That would have been about maybe 20, 30 cells. Um, and then the largest system we ever made was 150 kilowatt hour, uh, system. So this would have been enough to power like an industrial unit, um, with power. So it was a Higher power sort of application. So it's like a server rack.

Speaker A: Okay. And this process, was uh, it scalable? Could you use this process to manufacture tens of thousands of batteries?

Speaker B: Yes, yes. Um, we were able to produce about a megawatt hour worth of batteries a day, um, on a manual assembly line. We did not get to automation. So that would have been the next stage in the journey. But yeah, it was absolutely scalable.

Speaker A: And you thought of commercializing this by actually selling batteries. You didn't want to just sell the process.

Speaker B: So this is where the naivety, uh, of a first time founder comes in. Akshay. Uh, because we didn't know what we didn't know and there weren't really people around us to advise us at the time. So both Carlton and I thought, well, we've made this thing, we should uh, make products and sell products. And that was actually one of the. I think that was a very challenging thing to do. Very challenging thing to do. The smart thing with the power of having been through it and uh, uh, knowing what I know now. Absolutely. Selling the process, selling the intellectual property would have been the best thing to do with it, um, instead of trying to do it all ourselves.

Speaker A: Uh, so, yeah, take me through the story. I interrupted you. You started going for these competitions where there was an opportunity to earn cash.

Speaker B: Yes, that's right. Um, and so we went and did these, uh, competitions. We started winning, winning competitions. Um, and that led to us being able to start funding the business. And then I think the big, big first break was that we applied for a research grant from the UK government, uh, and we were successful in winning that. So that was our first major project, um, that was valued at I think something like 250,000 for us over say a 1212-18 month period. And that meant we were able to really refine some of the technology, the process, everything as well. Um, and so that was it. And then we raised our first. So we incorporated the company in August of 2016 so that we won the grant and then we incorporated the company. Um, and then we raised our first pre seed investment round in late 2017, so about a year later. And that was minuscule amount of money in today's terms. But at the time we thought, wow, we've raised a lot of money. That was £150,000.

Speaker A: Yeah, yeah, yeah, yeah.

Speaker B: That's minuscule for a hardware business especially.

Speaker A: Yeah, yeah, yeah, yeah, yeah.

Speaker B: So we sat, we did that and then, um, over the course of the whole journey. So we did this for about seven years.

Speaker A: Your investors uh, did not tell you, sell the ip. Why do you want to sell batteries? Like, they bought into your vision that we will be a, uh, battery manufacturing powerhouse, whatever. Like, I don't know what are the big brands there, but, like, in India you have, uh, Amara Raja or whatever. Uh, like. So that's what you were thinking of.

Speaker B: So the plan at the time, uh, back then, the proposition was we hadn't even thought about manufacturing First Life products. So back then we were manufacturing and working with Second Life products. So we were actually, the scope was, can we partner with recycling companies and these organizations sort of who deal with the end of life? Um, so it wasn't even a question of licensing ip, because it was. So we were so far away from the manufacturing process at that point. Um, that came to light later. So we did have advice on that later. Um, and without wanting to spoil the story too much, that was ultimately where we ended up.

Speaker A: You were recycling. So a battery is basically a bunch of cells which are combined together, uh, electronically as well as physically. Uh, and, uh, so when the battery reaches end of life, aren't, uh, the cells inside useless? Uh, we're talking of lithium ion cells, I'm assuming. So wouldn't you need to, like, extract that lithium ion and do that whole recycling of lithium ion from that cell, that, whatever that whole process is there? But I don't think. It doesn't sound like that's what you were doing.

Speaker B: No. So we were not going into the cell itself, uh, to access the chemistry. But what we were doing is we were testing, uh, the cells and categorizing them. So the cells which had 90% of their life still left, they're useful for a certain application. The ones that had 60% of their life left, they're useful for a certain application. So you start catalog, and there are some who absolutely need, um, they need their own, uh, to be recycled in that way.

Speaker A: They need to be recycled.

Speaker B: Yeah. But our thesis was if you can extend the useful life of the battery, you give it a much better opportunity to pay back all of the energy that's gone into the production. And ultimately the recycling process is certainly, at that point in time, the best. Like the material recovery process, they use a process called, um, uh, pyro metallurgic. Pyron. Pyro metallurgic processes. So this is where they heat the battery up to molten temperatures and they melt it all down. And whatever comes out the bottom of the reactor is what you recover. And that process is only economic. If you have precious metals in the Battery like nickel, like cobalt, like manganese, uh, these are precious metals which make it an economic process does not work for a majority of batteries which are lithium ion phosphate. So that's the other major chemistry um, in these batteries. So that becomes a huge, huge challenge. And then you've got another type of recycling which is hydrometallurgical processes. This is where they typically wash the, they break the battery down, they shred it and then they wash it in um, in various sort of acids, uh, and they leach out all of the different chemicals in order to, to split it apart. So these are really energy intense processes. And we thought if we could extend and really make sure that these cells have been used to their full extent, then it makes a big difference. I remember I read a study from Volvo where they said a battery, um, which is charged on your typical grid takes about 80,000 kilometers to pay back. If it's charged on a coal heavy grid, you have to drive that vehicle for 150,000 kilometers before it pays back. If you charge it just purely on a renewable energy grid then it's 30,000km. And so if you can keep these modules going for a much longer period of time, then it makes a big difference to how much carbon they're able to pay back versus what's been put into the process. So that was our thinking at the time.

Speaker A: One question here, uh, the, you know, India had this culture of recycling, uh, I'm using the term lightly but um, you would uh, if your shoes were torn, you would go to the mochi and he would stitch your shoes and then they would be passed on to your brother who would also wear them, um, which uh, is no longer there because of China. I would say like shoes are cheap, you can just go and get a new pair. There are shoes for every price range. Similarly, um, wouldn't China be supplying cheap batteries that you the, the economics of trying to extract the cells and then test each cell and then put them together again in a high, high um, labor cost country like the uk. How would that work?

Speaker B: Yeah, so the uh, um, the cost of first life cells have decreased significantly over time, um, for sure. And the cost of doing the testing.

Speaker A: So at that time the cells were costlier. So therefore there was still that economic,

Speaker B: uh, the economic benefit made sense. But this is where we start in the story. It shifted away from just reuse to well, what if we make first life modules ourself? And part of that reason was also because the other challenge we found is that you can't ship second life. End of Life batteries around easily. It's a very difficult thing to do. And this is where, if you work with a waste recycler. So we all love bureaucracy. Uh, actually, so in the uk, if a battery is considered end of life, if it's considered a waste product, it has to go through a series of paperwork. Ultimately it's all designed around the battery being recycled and materials being recovered. It's not designed for, we're going to take it out of the waste stream, we're going to reuse it, and then we're going to do something else with it. And so the paperwork for that just doesn't exist. The process of that doesn't exist. And then I remember hearing from an, uh, automotive company where they said, oh, if we need to send a battery that is from a vehicle, an EV that is not working anymore, we need to send it somewhere else in the world. We send it as a whole vehicle rather than taking the battery out and sending it as a separate thing. Because the paperwork involved is so much more difficult to get around than if we just sent it, uh, as a damaged vehicle. Um, so imagine they're shipping whole vehicles just to move the battery pack because the battery pack is too dangerous to move by itself or considered to be too dangerous, even though in reality it's not necessarily the case. And so, yeah, this is where we said, well, actually if we build modules using our assembly technology, which is, uh, made with brand new cells, and then we own the battery module through its whole life, we can extract so much more value from each of the cells than if we end up having to buy someone else's cells and then reuse them. So we calculated that for a given, uh, unit of cells, we could extract 10 times more value from that group of cells compared to a conventional spot welded battery approach. Because we have this ability to reuse and keep on using it again and again and we don't have to go through this costly process of, uh, battery like the paperwork and the processes to recover them from the waste stream.

Speaker A: Got it. Okay. Okay. Okay. And when did this pivot happen to first use? Um, end of life.

Speaker B: So this happened in 2019.

Speaker A: Okay. This was after the 150k that you had raised.

Speaker B: This is after the 150k. Um, and then we, we, so we, our first round was with Angels. Then, then we raised some money from a venture fund here in the UK called Mercier Ventures. And uh, then we raised money from bgf. So it's the business.

Speaker A: Just tell me the years also, like

Speaker B: which year and how much we were doing. And this is, this is another, another mistake, um, that we made. But we were doing around pretty much every year. So. So the first year was 150 and then it quickly went into the millions and it sort of. But we were having to constantly raise that. Um, some of that was the circumstances of the time as well, because 2020, we had the global pandemic and all of a sudden we had. So we had product that was manufactured and it was sitting in China and we could not get it to the UK for a year because we could. Like the cost of shipping went up. Uh, because batteries are hazardous materials as well. The number of slots on ships were much reduced and there's higher competition for these and bigger companies are able to charge their own ships. We didn't have that luxury, that resource. So we had. Our three main investors were Mercia, uh, BGF as a business growth fund in the UK, and then also, uh, Toyota, um, Mobility 54, which is one of their corporate, corporate venture, uh, teams.

Speaker A: Wow. And how much had you raised by 2020?

Speaker B: By 2020, um, it was about, uh, 8, 9, 9, 10 million.

Speaker A: Wow. Okay. Which is pretty impressive for, uh, like a early 20s kid. Right? That's what you were at that time.

Speaker B: Yeah, so I was, uh, in 2020, I would have just turned 30. So late. Late 20s. Yeah, late 20s.

Speaker A: Okay. Okay. So what, uh, like what made the funding happen? What did the investors get most impressed by?

Speaker B: Looking back, I think it's down to, um, the persistence that we had. So, like, each of these investors, they turned us down first. Um, so it was a case of constantly going out there, proving ourselves, keep coming back, making things happen. Um, and I think it was the excitement at the technology. And certainly there were market factors here as well, because, uh, 2019, 2020, there was a big push in climate to do things. And batteries as well, saw a huge amount of investment. Um, so these things, they come in waves. I think we were able to ride some of that wave for a while. Um, and yeah, so I think those are the main reasons. Um, and we had something different. Like we weren't saying to people, we're going to go and build a gigafactory somewhere. But we had, uh, an interesting technology that was genuinely different in the market, that was protected because we had some patents around this as well. Um, yeah, I think there was lots of interest in that.

Speaker A: And the only way to manufacture batteries would have been through China. You couldn't have done it domestically, right?

Speaker B: At that point. Yeah, because majority. I mean, there were no gigafactories in the UK, um, Europe. that point in time, China was the place where a lot of the manufacturing was happening. I mean India started coming online towards the end of that. But yeah, China was the. China was where a lot of the manufacturing was happening.

Speaker A: So whom were you selling to? You were getting these batteries made, uh, in China the thesis was that our batteries will last much longer. Like we can continuously, uh, because they are easy to disassemble. So we can continuously make sure that they don't have to be thrown. Uh, we can swap out individual cells which are not working. Very similar to say you have these keyboards which have replaceable buttons. So even if you spill water on it, a button goes bad, you can pluck that button out and put in another button. So the life is longer. So which is what the promise was for your battery, that the life will be longer. How um, were you selling it? Was uh, it a one ah, time sale or was it a leasing kind of a thing? Which would probably make more sense if you believed the life was longer.

Speaker B: Yeah. So by the end of the journey we were focused on selling uh, mobility style batteries. So these were for light mobility, so two wheeler, three wheeler, four wheeler vehicles. Um, uh, these are small modules but high power modules that were suitable for powering those vehicles. Um, and then we also had mostly stationary batteries. So these were um, systems more so systems that were designed for residential and sort of light industrial use. So this was the sort of 10 kilowatt hour, up to 150 kilowatt hour range.

Speaker A: This would be power backups.

Speaker B: This would be, yeah, yeah, uh, power backups or hybrid power use. So, uh, where you might have solar or even sometimes grid grid backup as well. Yeah, yeah.

Speaker A: Even in the grid you have P cars and you have non P cars. So you draw more in the non P car. So that in P cars you're not drawing. Got it, yeah.

Speaker B: Doing the energy arbitrage. So being able to buy electricity when it's cheap and sell electricity, uh, when it's expensive. Um, so that was another model and. Yes, exactly. So leasing these modules. So we called it energy storage as a service or subscription, uh, on the modules. Um, and uh, then we started exploring the licensing approach as well. So we had a few approaches actually because we were in partnership with the, and supported by the Department for Business and Trade in the UK and, and they have a big thing, they do

Speaker A: a lot of work.

Speaker B: Particularly keen on the relationships with India as well. So they started putting us in front of lots of different Indian companies, particularly ones in the automotive supply chains. And um, so we had lots of visits, we had trade visits and so on. And then, um, one of those partners, uh, really expressed an interest and we started then sort of working with them and developing a licensing arrangement around the IP because they wanted to bring this all in house.

Speaker A: So like a legacy battery company in

Speaker B: India, I'm guessing not legacy battery, actually. This was a. So this is m. The company ultimately ended up acquiring, uh, um, Advic. Uh, they are a Tier 1 supplier in the auto market. So they sell drive, uh, chain components, so metal for traditional internal combustion engines. And they wanted to get into. Are getting into batteries for the electric vehicle, electrification, um, of these as well. Um, so that was their interest in the technology. It was different. It was something which they could do by hand as well initially, um, and make work. So that's where the relationship began with them. And then they made an offer. They, they offer to lead around or they, they offer to, to buy the technology from us. And, and that's ultimately sort of where we ended up. So if I rewind a little bit. So in 2021, the end of 2021, Toyota invested. The beginning of 22, we were going to do another funding round and this time we were going to raise, uh, £5 million. And during that process we, we ended up, um, appointing a corporate finance advisor to help. And this is the first time I'd worked with a separate advisor. But historically all the funding rounds had just been done by myself. And over that period they didn't manage to secure for us any investor meetings really whatsoever, any investor interest. And then they started ghosting us, uh, after a while as well. So it was not a great situation. And at that point in time, so this would have been March 22, we were at a fork in the road. So we had Runway at that point in time, uh, to get to September of 22. And my gut, uh, instinct was, let's go back, I'll redo the materials myself, I'll go back out to market myself, go and raise the money and get the 5 million. I'm pretty sure I can do that. And we've got enough time to do that.

Speaker A: Yeah, you already raised 10 million, so another five, I'm sure you would have managed it.

Speaker B: And then we had the chair of the business who was a finance person, he'd been appointed by one of the investors and uh, he said he disagreed and so he said no, I think we should be, um, asking our existing shareholders for more money. So we'll do an internal funding round and Then we'll buy ourselves another year, we'll go back out to market next year, some more traction and sort of raise the larger round end. And I defer to his experience. He's a finance person, he's appointed by the investors. You think he probably knows more than me about these finance related matters.

Speaker A: How much, uh, ownership was still with you at this time?

Speaker B: At that point in time, uh, it was about 15%.

Speaker A: So yeah, you had no choice but to listen to. I mean investors own 85%, right?

Speaker B: So yeah, so still lots to, lots to do, lots there. I mean it was my, myself and my co founder between us have 30%. Um, but yeah, it was roughly.

Speaker A: Yeah, okay, okay, okay. Investors on 70%. Got it.

Speaker B: Yeah, yeah, yeah. And so we uh, I deferred to his judgment and then spent the next two months working on a different plan, uh, which was aimed at existing investors to raise more capital. Presented that to the board at the very beginning of June and went away then for the first two week holiday in six years. So prior to that, every time I'd been away it'd been just for one week at a time. And then I came back from holiday and this is 27 June 2022. The chair called me into the office, said we need to speak urgently. I went into the office and he then said to me, while you're away, the investors have agreed that you need to step aside as the, uh, leader of the business, as the CEO of the business, you're not allowed to leave. If you leave, it doesn't work. But you can't be the CEO anymore. They've said if you don't agree to this change, they're not going to fund the business. But this is not a command, this has to be your choice. Uh, but if you don't agree with it, then all of these people you've employed, at that point we had 35 people in the team and all of these people you've employed will not have a job anymore. So you've got 24 hours. What do you want to do? Think about it. And um, I always said from the outset of the journey I didn't want to be the bottleneck to the success of the company. And so I agreed to the change. And what followed was the hardest six months of my journey, of my career. Um, because five weeks later the investor that was pushing for it decided not to invest anyway. So they ran away. It was like they dropped a brick into the pond, watched, uh, the ripples and then run away anyway. So they didn't support us and we really needed it. And I was left with someone else being appointed as the CEO, um, while still trying to fundraise for the company. So it was clear to me that couldn't rely on the existing investors. So I went out to market again, no longer as a CEO, not really sure what the position was, what I was doing. And I started talking to various investors and I managed to get a family office. Um, and they really liked what we were doing, felt it would fit well with their portfolio. They agreed to a term sheet, so they gave us a term sheet for the 5 million and went through the process with them. So we got to a stage where the legal agreements had been agreed and it just needed signature on paper and cash transfer to finish just before Christmas, because this is always the time when these things happen. The, uh, managing director of the family office ended up resigning. Nothing to do with us. He just, he must have had a different job or so whatever happened, I'm not sure, but he resigned. The family office was made up of three people, the managing director and the two family office owners. And the family office owner said, we're putting everything on pause until we recruit a replacement. Uh, and so we went into December 22 not knowing what was going to happen next. And then we came back in January and the existing investors that remained, not the one who had, um, told us they weren't going to support us, but the existing investors of Toyota and one of the other two venture funds, they said to me, we need you to step back in. So we're going to make another change. We're going to reverse the change I was made before. We'll, um, change the chair. Um, and please can you go and sort of do the next step? So at that point in time, we had Runway until March and I had to, then we had to then go through a period of. We had to cut the team in half, basically. We had to drastic reduction in headcount. We, um, had to keep moving forward, do another fundraising process. And it was while we were doing that process that Advik made the offer. And it was, to me, I was ready to. Having gone through that whole period. It was, for me, it was a, it's not ideal, but actually this is a better way to end things than, you know, carrying on for another five years feeling really burnt out and, you know, all the rest of it. I mean, I'd already said to the, I'd already made clear to the, to the board that raising funds, not a problem, but I was probably, it was, it was going to be time for me to leave anyway after that, to get the company into a good place. And then when this offer came, the existing investors and the board, when I said, look, this is the situation, they said, well, we know that you could raise the rest and uh, there's a couple of term sheets that are incoming, but if you're not going to stay anyway beyond this period, the company's not yet in a place where it can really survive without you being there. So we agree with you that actually this offer to buy the company is probably better than the alternative, which is you raise the rest of the funding and then you leave and we have to go through a period of recruitment and so on. So that was the best option for the company at the time. Um, even though it was all incredibly, incredibly painful. I mean, I look back on it now, actually. I think this was one of the most challenging, challenging experiences. But I, but it was genuinely one of the best gifts that I could ever have received. I learned so much more from that experience and I'm so grateful for the experience. I would never want to go through it again and I wouldn't wish it on anyone else.

Speaker A: Yeah, I can imagine.

Speaker B: But, but actually it's. It was a, it was a present. It was a gift, um, which I could not have received from anywhere else.

Speaker A: But I'm assuming it would have been less than what, like that 10 million which was raised. It would have been less than that.

Speaker B: Yeah. Yeah, yeah.

Speaker A: Okay. I guess to me, uh, the one big, uh, takeaway from this story is, uh, that kind of dilution, which you did 70% to investors at such an early stage. Uh, and it is equally, I guess, the investors to blame who, uh, agreed to, uh, come in m. With that kind of dilution of founders. Uh, I mean, the skin in the game is not there, uh, that strongly then, you know, uh, which is why it was for you. The decision to move out was not a tough decision to make. Uh, the ability for investors to derail, uh, what was something which could have been saved. You know, all of those things are just coming from that one captable decision of, uh, diluting so much. What, I mean, what do you think? Like, do you agree with that?

Speaker B: I think there's a few things in this. I think one is the first time founder naivety. I think two, it's the attitude, uh, to venture capital, certainly in the uk, where the feeling is very much one of optimizing to reduce downside as opposed to optimizing for maximum return. And what that means is they.

Speaker A: Yeah, that's what I want to take out of 10.

Speaker B: They take larger stakes earlier because they know that their feeling is, well, the value of sort of exits is smaller, this is a smaller market and so on. So that's where I think it also is really challenging. And then the third thing is I think the business model and the sort of approach, the hardware nature of this meant it was really challenging as well. Also, just also to say that, and I don't mean this with any disrespect to investors, you know, there are some wonderful investors out there. But when, when investors have, you know, if they've got a purely finance background or they've never been in the arena as an entrepreneur, uh, they don't necessarily know what it means either to do this. And um, you know, ultimately if I think about our journey like it could, it could have been a very different outcome if we had um, if, if we hadn't had that instability and 2022 and there was no need for any of that, but it ended up happening. So uh, my favorite phrase, I reflect on this a lot, but my favorite phrase is that there are just, there are only two types of problems in business. There are people related problems and there are problems that you don't yet realize are people related problems. And in our case, okay, that was absolutely true. We didn't have, it wasn't a technology problem. There was a bit of, a bit like we could optimize the business model, but really it was a people problem. That's what ended up sort of causing it to go on a path that was suboptimal perhaps.

Speaker A: I mean, I don't know if I would call it a people problem when, uh, the cap table to me is the villain in the story, like uh, 70% gone at such an early stage, uh, you would have been at best a Series A business. Right.

Speaker B: We were raising the series B in

Speaker A: 22 and this was obviously a business which needed you to raise a significant amount. So there would have been multiple rounds that you would have had to continue to raise. And uh, yeah, I, I, I think what you explained as the minimizing the downside, uh, the risk that in the UK market the outcomes are not so large, therefore they want bigger stakes. Those are structural problems. Uh, how do you see this getting solved?

Speaker B: I think we need more founders to become investors, um, because they bring that level of empathy. I think there's also part of this we can borrow from other cultures which are much more entrepreneurial, um, and less risk driven. Some of them as you say, are systemic and they Require change in law. So even the way you treat things like uh, bankruptcy in the uk, in America it's designed for that entrepreneurial way where you just, you, you finish one thing and then you can move forward and it's nothing wrong with it. But in the UK there can be real serious ramifications. It could lead to prison time. If it's done in the wrong way, the risk is much higher. And so if you want to promote that sort of lower risk culture, then some of that is in that direction. But I think we can learn a lot more from other cultures, um, where this is done much better. I mean there are some things that the UK have done really well. Like for example, um, there's tax incentives for high net worth investors where there's something called the seed enterprise investment scheme. Um, and the enterprise investment scheme where they can get up to 50% of their investment back as a tax rebate. Um, so that's literally de, risking their investment by half. Um, and so that has unlocked so much more early ah, stage capital. But then you've also got this big gap between the early stage and the sort of series A plus rounds. And then you also factor in hardware. Like the UK is really good at fintech. It's one of the strongest in fintech. There's so many sort of investors who are interested in that and maybe SaaS software, not so much in hardware. Um, there's far fewer investors interested in hardware. And that's also challenging as well.

Speaker A: Yeah, it's a finances versus hub.

Speaker B: Um, so, and then, and also our markets. So we were focused on markets like East Africa, like India, like Central America. And like most UK investors don't know anything about that.

Speaker A: No, but these markets you are focused on for selling the batteries or for licensing deals?

Speaker B: Both. So what we found in our experience was that we needed to demonstrate the technologies could work in these markets in order to attract and prove that there was a license worth taking. Um, because the technology was so different from conventional technology. Um, and so that was part of the reason why we ended up selling in these environments.

Speaker A: Okay, so, okay, uh, what next then? So you managed to walk out of it, uh, without being jailed.

Speaker B: Without being jailed, yeah.

Speaker A: Yeah. Let's count our blessings.

Speaker B: Oh, 100%. Yeah. So I had the option of staying with the company. So, uh, um, my co founder Carlton, he did. So he's still with Advik now as of recording. So he spends most of his time, he's been now more times to India than I have. Um, and uh, he knows the route well, he Knows the people well. Um, so yeah, he lives in between the UK and India at the moment leading on their battery work. But I had made clear that I was ready for the next thing. So I took a little bit of time off. I ended up aching about three months, three months off, um, to, I say sort of to get over the trauma of the whole experience, um, and just to decompress a little bit. And then I started getting inbound inquiries pretty much straight away. So I think the day I said I was sort of finished with the journey, I think I had like three or four people approach me and say would you be interested or could you come and join us and do this, you know, for us?

Speaker A: So these were like entrepreneur in residence kind of roles?

Speaker B: No, no, these were like full time CEO of other, of other startups and company roles. Um, but I wasn't, I didn't feel like I was ready uh, for those. And then I had an approach from carbon13. So carbon13 is a, is a venture builder in the UK, um, and in Germany as well now. So they, they have, then what they do is they bring together founders who don't necessarily have ideas and they bring them together, they let them percolate, come up with good ideas and then they invest the first check into the top teams and top ideas. And so they were looking for a new entrepreneur in residence to join the team. There's about 10, 10 or so of us. And then um, yeah, that was the sort of first thing that I really felt like doing because it was so fulfilling to be able to teach and pass on these lessons to the next generation of founders who's going through the program. And I was also invited to join the Strategic Leadership Group of the Ayrton Fund. So in the uk this is ah, a UK aid fund. It's a billion pound fund which is focused on um, commercializing research and development in Commonwealth countries. So a lot of the work we were doing in Sub Saharan Africa and India, they were a partner of ours through some of the corporates that we were working with. So I was asked to come and advise on the circular energy storage aspects along with other folks. And then I was also invited to join fast forward 2030 as well or it's just changed the name now. So Fast Forward Global, um, which is based out of UCL's Institute for Global Prosperity, um, and that's all about getting more people into social enterprise. So I was doing a lot of this work and while I was doing the entrepreneur in residence work over the next sort of year or so I started to getting the feeling, the itchy feet, the sort of clenching of hands when you give people advice and they don't necessarily follow the advice. Uh, and so I wanted to see if I could do it better because I reflect, I reflect on the journey with Acceleron and I often think that 90% of the decisions I made I would do differently the second time around. And so I thought, well, why am I not doing that? I should go and do this. And so I ended up two of my team at Acceleron, so Barry and Paul, um, we were working together and decided to do something together. So we started thinking out some ideas. What could we do? And that's where, that's where lawfully began. So lore is spelled L O R E and it means a body of knowledge which is typically passed from person to person by word of mouth. And when we started it, so this was now, um, in sort of mid 24, uh, when we started was really to address one of the big challenges we faced in Acceleron. So in Acceleron, because we were so busy all the time and we had projects going on everywhere, there was never enough time to write things down properly. And this was especially true for people in the field doing things. And so we started out this concept of how do we make it easy for people to share what they know? Um, because especially like field engineers, if you're out there in the field and you enjoy that kind of work, the last thing you want to do is be sat at your desk writing lots of things out. And so with the advance of uh, technologies, um, like AI, we thought there must be an easier way to do this. So Paul, my co founder, ah, I've known him since my PhD day, so he was also a PhD, um, in the same research group as I was. But his specialism was in computational science. So he did, he did his PhD in Computational Science and then he moved into postdocs, uh, in machine learning and sort of AI science. And he did that at Stanford in the U.S. he did that in Denmark at DTU. Um, and then he came and joined me in Acceleron and he was leading up a lot of the software that we were developing for the remote monitoring of the batteries and the predictive maintenance and things like that. And so he starts turning his mind to it. And then Barry, our third co founder, has a background in a lot of these operations. Um, and so he's often, he is the Ying to my Yang. Uh, he is the I come up with the crazy ideas and then Barry's the One who makes them turns m them into reality. So we ended up designing something. I spoke to people, we got some pilots very quickly with big multinational organizations, all these sort of field service engineer type roles. And those pilots went really well. So we were using the software, making it easy for people to tell us what they were doing on these jobs and then categorizing and structuring that information. Um, and we then found that as those pilots came to a conclusion and they were successful by the metrics we set out, things really slowed down with these big multinationals because what we realized is that they don't have budget lines for things like knowledge management. And so you end up in this bureaucratic nightmare where you need to get approval from 10 different advisory groups that exist all around the world. And by the way, the advisory group, the next one that's on the list just met last month, so you've missed them. And the next time they're going to meet is in six months. Everything slowed down because we ended up in this bureaucratic nightmare where we would end up having to, um, talk to different boards that were sort of all around the world. And especially with AI at that point in time becoming such a big topic areas. Sometimes we'd get approval for something and the next thing we know they would say, uh, we've just been told that the company as a whole has brought together a new convening group with a new AI person. But that person's just started, so they're going to take six months to get their feet under the table and that's going to take some time. So it turned out to be really. So some of those conversations are still ongoing even now. Um, and so by the end of 24, beginning of 25, we thought we've got to pivot this because if we carry on waiting, we're going to run out of resource. And so In April of 25, we thought, okay, well let's what if we take this problem and apply it to smaller companies? Because we know that so these large corporates have this problem. Chances are small companies are also going to have this problem. So, uh, that should work out for us. Um, started talking to lots of small companies and as part of that we decided to exhibit at a trade event called the Installer Show. It's quite a large industry event here in the uk. So it's a trade show and they had, last year they had 31,000 people attend. I got in touch with the organizer, um, and decided, well, I wanted to see if we could get some free space, uh, because being a small, scrappy startup, you've got to try and get everything for as little resources you can. And the organizers saw what we were doing when we showed them and they said, well, forget your application. Can you use this in the context of our event and tell us what you learned? So I said, we'll give you the space for free. You come and do what you need to do, report back to us afterwards, and we'll take it from there. So we thought, okay, there's something here. They're giving us free space. They seem really interested in this, and if they're interested and it works out really well, maybe there's something more to this. So we pivoted at that point to design, uh, a system that would work in the context of an event. So it's very different use case. And the show was a huge success for us. So in June 25th, at the very end of June, exactly one year ago, almost one year ago, um, we went there and we captured lots of information, all about what installers thought about heat pumps and, uh, associated technologies. And then, um, at the end of July, we had our debrief meeting with the organizer and they said, this is amazing. You've never had this level of quality of information. We need to start talking about the next event. Then middle of August, two weeks later, I thought, there's clearly something here, so we should start reaching out. I'm going to start reaching out to other organizers who are running events and see what we can do. And very quickly we managed to get our second trade event, which was a trade show called, uh, the Senex Expo. So this was the, it was a low carbon vehicle showcase. And that too went down really, really well. And what we worked out is that the micro problem that we're solving, because I like to think now about problems in two stages. You've got the macro problem, which is what is the big picture problem that we're solving. And then there's the micro problem, which is the sort of who are we specifically solving it for and what's it about? So the macro problem, if I could take a step back, is that we believe that human knowledge is far too valuable to lose and yet we're really casual about doing so. And imagine, I'm always fascinated by this idea that imagine how much further ahead we would be as the human race if we had access to all the genius of our predecessors. But unfortunately a lot of that is just lost to the sands of time. And how many lessons do we keep having to relearn because we forget that we've already been through this experience. So imagine if we could capture all of this genius and bring it together. That's an immense amount of value. So if we can capture this human expertise at scale, we can convert it into useful insights and we can progress faster towards things like net zero and the benefit of humanity. As we, as we went through this process, the micro problem that we worked out is that organizers in particular, uh, people who are convening people for these events, no one ever fills out post event surveys. They have very little idea about how their event is being received. There is a wealth of content being generated around them, but they don't have the capacity or the bandwidth to capture any of that. And then the third problem is that, uh, they're under immense pressure from sponsors, from exhibitors, from attendees, all to prove what is the return on investment for me being at this place in time. The second challenge that they experience is that there's a lot of content being generated around them and there is no bandwidth to capture any of it. And then the third, uh, challenge that they face is that they're under immense pressure from their sponsors, their exhibitors, their attendees, all to prove the value, the return on investment for spending their time and resource being at this point in time. What I find, Piketty, again interesting, is that we are bringing together hundreds if not thousands of people into a given space, all of whom are subject matter experts in their own way. And it feels like an absolute waste to let them leave without trying to capture something because they're all having wonderful conversations and they're coming up with the next best idea that could be the game changer for the world and it's all being lost, it remains in their minds and maybe the people they're talking to, but no one else will ever know. I also think there's something beautiful about the thought equality aspect of this as well. Because when you go to an event, you hear from the good and the great, you hear from the people who are well known and talk with authority about a topic. But actually there are so many people in the room who have an informed view, who never get the chance to express it in a way where it's recorded. And so the number of events I've been to where I've spoken to people and they've said, I'm not qualified to answer this question or I can't possibly have anything interesting to say. And when you press them and they do tell you what they think, what they're saying is actually incredibly valuable and it's a viewpoint which no one else has expressed. So it's really truly that diversity of experience and thought process that manifests.

Speaker A: Uh, I want to. So I hear you. The knowledge that can be captured there is valuable. Uh, what I want to understand is how is it through audio recording which gets transcribed and analyzed by AI.

Speaker B: So we developed a software platform, um, which we take along to events with us and then we have human to human conversations. So this is not your traditional tech company where there are no people involved. This is very much that interface of human and technology. So we have human to human conversations with people. We talk about topics and we capture those conversations that we're having with those people. How do you capture them all? Through the software that we've developed.

Speaker A: The phone would be in your pocket

Speaker B: and no, it's literally like it's not a hidden thing actually. So I would come to you and I would say, actually we're here at this event together. I'm curious what your view on this topic is and do you mind if I transcribe what we're going to say now? And then we would have a conversation about it and we'd go as deep as you're comfortable going and then, yeah, we'd capture that information.

Speaker A: Doesn't sound scalable if you need people to be manning every event.

Speaker B: I think that depends on the size of the event and what the desired output is. But so far it's been entirely scalable. Um, also because a lot of these events have their own teams there anyway. They have showrunners who are employed specifically to do different things around the venue. So this infrastructure already exists. I think what we are showing is that we can use that existing infrastructure in a different way to capture additional data that can be used for multiple purposes.

Speaker A: So you would equip the showrunners with the app and then they would go out and chat. Uh, would you also give them questions? How would they know what's an individual?

Speaker B: Yes, that's right. So that's the other part of our system is we understand from the organizers, the sponsors, whoever is directing the question, what is it that they're really looking to know. And what's different about our system is, uh, unlike a, uh, survey, you ask one question, you get a response. This is more like a conversation starter. Uh, and so we have topics that we want to talk to people about, not necessarily specific questions. We then have those conversations and what we come back with is a rich data set full of information that can then be used for whatever the purpose is. So in some cases people want to Use it for capturing the latest thinking about a topic. In other cases it's. Well, actually we're spending money being at this event. It's great that our logo is here, but actually we need a year's worth of thought leadership material now. Um, so can you convert all of this content you're generating or capturing into a series of blog posts or some uh, newspaper articles or a white paper or LinkedIn posts, whatever that format needs to be.

Speaker A: And this is also run by humans, the conversion.

Speaker B: So it's all AI in the background, but human in the loop.

Speaker A: So you need someone to prompt that. I need a, ah, LinkedIn post.

Speaker B: No, we've set all of that up already. Um, but it's more about the human in the loop element is making, is the editing and the reading to make sure that it's not, it's not just,

Speaker A: you know, it's not AI based on.

Speaker B: Yes, exactly. Yeah. I mean we're quite fortunate because we're using AI in quite a clinical fashion. You know, we're not asking it to generate new things. Uh, it's based entirely upon the data set that we, that we are capturing.

Speaker A: Yep, yep, yep. No, uh, it's uh, I can imagine the quality of content would be very high. Uh, so it would definitely be a good marketing investment for the event. Uh, so I see the marketing ROI on this. What are the other ROIs like? The marketing ROI like you know, in terms of powering the social media content and posts and stuff like that. So I see that. What else is there?

Speaker B: So sometimes organizations just want to know what is it that ah, we are missing? Um, or we need to think about a new way forward in our sector. Ah, but we can only be in so many places at once. So what does the audience thing of experts or the stakeholders who we care about otherwise we wouldn't be sponsoring this event. What do they think about this specific topic that we're interested in? Um, through to. So that's another use case. Others have been more like, oh, uh, we need to know what's the perception about our brand or what do people. And what's the first thing someone thinks about when they think about Heatpub? Which brand comes to mind?

Speaker A: Got it, got it. So market research and insights, basically research and insights.

Speaker B: Research and insights which can be market research but also can be wider trends, can be the deeper, uh, underlying sort of expertise that exists in the room around that technical subject matter, something like

Speaker A: what Nielsen might be offering. Uh, but not just in terms of product, but also in terms of ideas.

Speaker B: Ideas, innovation anything at all, which is, again, the more subject matter expert it is, the stronger it is as well. Um, so when you've got a conference that's all about the latest in sustainable chemicals, you know, that's quite a technical subject.

Speaker A: Awesome, awesome. Great, uh, chatting with you, Amrit M. Thank you so much for your time and wish you all the best.

Speaker B: Thank you so much, actually.