Poor indoor air quality has emerged as a big issue in office buildings, specifically pertaining to CO2 and smell buildup. This problem is even worse in large cities with heavy air pollution (e.g. Beijing). To solve the problem of indoor CO2 buildup, we are developing a microalgae air purifier “Terraformer-1” for generation of fresh air. Our plan is to deploy these devices in office spaces to generate fresh air, while removing excess CO2 and other air pollutants. This will create a healthy indoor environment but also reduce the need to bring in as much outside air, thus reducing energy cost.
We have demonstrated both lab-scale as well as small scale viability based on our proof-of-concept device. Based on our findings we have further iterated and refined our MVP design. Currently we are modifying the MVP design to fit with manufacturing capabilities of our supply chain.
On the business side, we have acquired partners in the Air Quality sensors industry. They are a strategic partner with mutually beneficial interests for both parties. Since we take care of the problematic areas they identify with their sensors, this further drives the adoption of Air Quality Sensors.
We have obtained multiple Letters Of Intent from real-estate developers and financial institutions who are most keen to deploy our solution.
Our target customers are large property owners and real estate developers of office buildings (e.g. capitaland, JTC), facilities management firms for large corporate offices (e.g. JLL). The target customers would have offices based in regions where air quality is of a higher concern (e.g. Beijing, where there is heavy air pollution).
This global market opportunity is worth 99 billion SGD with a CAGR of 6.8% annually. The regional market in India, China and Southeast Asia would be 47 billion SGD. Hypothetically, there are over 20,000 office buildings worldwide (buildings >10 storeys relying on centralized ventilation systems) that can benefit from our device. However, this device can also be used in smaller office buildings, expanding the market even further.
Problem or Opportunity
Guidelines fr om the global standard on indoor air quality and indoor CO2 levels, mandate they be maintained below 1000 ppm for a healthy indoor environment. However, in many office buildings CO2 which is produced by building occupants, regularly builds up and goes beyond this level. High indoor CO2 leads to fatigue and reduced cognitive function, and is a major cause of the ‘Sick Building Syndrome’, a medical condition wh ere occupants have symptoms of headaches, skin and eye irritation. Furthermore, high indoor CO2 levels result in higher HVAC energy cost (>50% of building electricity consumption). This is because large amounts of fresh outdoor air is required to be ventilated into buildings to displace and remove the CO2. This problem is even worse in large cities with heavy air pollution (e.g. Beijing) wh ere office buildings have difficulty bringing in fresh air from the outside due to the higher requirements for air filtration. In these instances, CO2 builds up excessively and HVAC energy cost skyrockets.
Solution (product or service)
To solve the problem of indoor CO2 buildup, we are developing a microalgae air purifier (the “Terraformer-1”) for generation of fresh air, while removing CO2 and other air pollutants (particulate matter, volatile organic compounds). Our plan is to deploy these devices in office spaces to generate fresh air, while removing excess CO2 and other air pollutants. This will create a healthy indoor environment but also reduce the need to bring in as much outside air, thus reducing HVAC energy cost for ventilation and cooling. Initially, we will deploy these devices as stand-alone units. At a later stage we will integrate these devices into the HVAC system of office buildings.
Artveoli’s technology makes use of microfluidic chips, which have a significant size requirement, small algal separation potential, and act as a small biomass container for excess algae. They are and will likely stay better at achieving higher CO2 diffusion rates and high algal concentration compared to what we are building but this will come at a significant space disadvantage due to the number of chips required (negating the advantage). This is a big space penalty on the scale of a device that is required to compensate for anything more than one person in a small room. For example, 1L of working liquid that performs better than ours (9g/L of algae, 2x compared to us) comes with a heavy penalty of occupying 50-100x space for each liter of working liquid. ETBio’s microalgae air purifier has a ratio closer to 5x, so even with a working liquid that has less performance than artveoli, the entire system performs better within the limited office space. There is not much they can do to fix this, unless they do a complete technological shift.
Algenair’s Aerium is a relatively small device with a very small coverage area (~10 m2) and CO2 removal capacity. Algenair is targeting the consumer market. They will likely face issues for the consumer market with the regular system maintenance that is required when using microalgae. ETBio’s microalgae air purifier is estimated to have a much larger CO2 removal capacity with a larger coverage area.
Advantages or differentiators
ETBio’s device is estimated to have a larger potential coverage area (over 200 m2) compared with competition. Furthermore, apart from CO2 removal and oxygen generation, our Terraformer-1 device will remove odors, volatile organic compounds and airborne particles such as PM2.5, bacteria and viruses (hot topic). Due to our algae separator component, we expect to have a much lower maintenance requirement.
Furthermore, unlike Artveoli or Algenair, our go-to-market strategy is to partner with air quality sensor companies. These companies deploy air quality sensors in many large office buildings. From these sensors, the customers can link the issue of ‘stale air’ or ‘stuffiness’ to the high levels of CO2 shown on the sensors, solidifying the unmet need for deployment of our device. These partners identify the problem, we have the solution for it.
We plan to earn revenue fr om our device through a subscription model wh ere the customer pays 1000 SGD/month. Based on our estimation, over the next 5 years we will be deploying over 10,000 units in China, India and Southeast Asia. In the 3rd year, we will begin to make net profit (3rd year = ~1M SGD, 4th year = ~27M SGD, 5th year = ~69M SGD). Without any cash injection, the company will be with negative cash flow for the first 3 years. Starting from early in the 4th year onwards, we will have positive cash flow.
We will generate revenue through a B2B subscription based model. Upon deployment of our device in the office buildings, the customer will pay us a monthly subscription fee on a contract basis. Through the contract we will provide fresh air as a service, as well as repairs and regular device maintenance (e.g. removal of waste algae, replacement of algae growth medium). Based on our market research and price testing with potential customers (e.g. Jones Lang Lasalle), we have determined 1000 SGD/month as the optimal starting point.
Money will be spent on
We have two phases in our pre-seed/seed stage plan:
1.) Product development phase: We will raise over 400,000 SGD for development of a functional prototype to trial with our first few customers (e.g. JLL, Capitaland).
a) 52% of funds will be used for prototype development (outsource prototyping, buying materials/consumables, provisional patent filing).
b) 41% of funds will be used for hiring of talent (algae scientist/technician, mechanical engineer) to help us build the prototype and for the founder's salary.
c) 7% of funds will be used for operations (lab/office rental, company admin fees).
2.) Marketing phase: We will raise ~600,000 SGD for marketing/sales and building several fully functional devices for early deployment with customers.
a) 22% of funds will be used for design of the first few pilot builds for early deployment with customers and filing of patent (PCT, National phase).
b) 37% will be used to continue hiring our team and for the founder's salary.
c) 36% will be used for sales/marketing (trade shows/exhibitions, contract manufacturing of pilot builds).
d) 5% will be used for company operations (lab/office rental, company admin fees).
Offer for investor
Currently, we are raising over 400,000 SGD. Our current, pre-money valuation is set at 4,000,000 SGD.
There are several risks we foresee: (1) Indirect competition (2) Adoption of similar go-to-market strategy.
1.) Potential development of other alternative CO2 removal devices. There are other devices and chemicals developed for CO2 removal (e.g. amines), however they currently have many disadvantages e.g. foul odor, requires high energy (heating) for regeneration.
2.) Other competitors may adopt the go-to-market strategy of partnering with air quality sensor companies. This could mean they will tap onto a stronger unmet need, than doing direct sales to office building owners themselves. Nevertheless, we have several technological advantages over direct and indirect competitors.
Incubation/Acceleration programs accomplishment
We were incubated/accelerated (February 2019) and later funded (May 2019) by Entrepreneur First in Singapore.
Won the competition and other awards
We participated in many pitch competitions where we quite often managed to reach the final stages. However we have not been winners so far.
Top 150 for Lee Kuan Yew Global Business Plan 2020
Top 10 for HKSTP Elevator Pitch 2019
Top 100 for Slingshot 2019
Top 15 for Hello Tomorrow (Regional Challenge)