The 2015 edition of the pan-European startup contest Idea Challenge sees an increase in variety and internationality. The series of events re…
While earning his Master's degree in Mechanical Engineering and Business Administration at the Technical University of Graz, Austria, Matthias Rebernik focused on increasing the efficiency of internal combustion engines and ways of reducing emissions. However he didn't need a crystal ball to show him that the future of transportation was moving away from fossil fuels.
BMW was in the process of developing its Hydrogen 7 passenger car and Rebernik’s PhD-Project focused on the thermal insulation of liquid-hydrogen cryotanks being developed by BMW’s external partners in Graz. Two key findings were: that the insulation system didn’t sufficiently store liquid hydrogen in passenger car tanks; and that the manufacturing process was not suitable for automotive standards.
He tried to push his ideas for improved systems working for a large corporation. “I learned quickly how it works in large corporations – individual interests are often in the way of working on the problems at hand.” he recalls. “I failed spectacularly!”
Embittered, but not defeated, Rebernik decided to give it a go himself: “I always wanted to start my own business and my initial failure was the feather that tipped the scales.”. Luckily he had a feather in his cap which would be of enormous help in getting started – his father's support and experience.
“My father, Bernhard, a PhD in mechanical engineering, started as an engineer and became a member of the board of Andritz AG, a large industrial corporation in Austria,”says Rebernik. “He taught me that achieving success always means taking a risk, but once achieved it also carries responsibilities – one must give something back to society,” says Rebernik. “With his experience and network, he's always been involved in our strategic development, financing, setting of milestones and goals. He has replaced the need for other key investors, business angels and consultants.”
Bernhard Rebernik invested part of his success in his son’s vision and brought in another strategic investor from Graz – Karl Rose, the former Chief Strategist for Royal Dutch Shell. In 2008, Rebernik received pre-seed funding from the Austrian federal promotional bank (AWS), which, according to Rebernik, “was a credible and competent outside view of our goals and plans. They were very helpful in every way.” Investing his own money as well, he was able to hire his first employee and began developing a prototype for a cryogenic storage tank for liquid hydrogen fuel.
Overcoming initial obstacles
World Energy Council website https://www.worldenergy.org/news-and-media/news/12243/By the next year, it became apparent that fuelling passenger cars with liquid hydrogen would not be marketable. So he started seeking a new application for his cryogenic technology and soon settled on Liquified Natural Gas (LNG), which when cooled to -160°C takes up relatively little volume thus enabling its use as a fuel for the long-haul heavy duty trucks. They tweaked their technology, started new market research and contracted with an industrial cooperation partner based on their insulation technology.
Everything was looking rosy, until it didn't. “Our partner was trying to get everything for itself and was clearly in breach of contract.” The contract was terminated, yet Rebernik retained all his IP rights. However, this meant that he had to develop a complete tank system without an industrial partner. “I saw it would take additional technology components to do so. The seed money from AWS allowed us to develop our concept, and now that we have received the [1.7 million euros] EU grant to augment our own capital, we can proceed with industrialising our prototype.”
The European Union's Horizon 2020 initiative recognised the huge potential of Cryoshelter, which was incorporated as an Austrian GmbH in 2013. LNG technology has been around since the 1960s, but has been mainly a way to transport natural gas over land and sea. Lately, it's growing in the trucking field, because gas is environmentally cleaner, more affordable and more available domestically than diesel fuel, thus immediately addressing the three “Energy Trilemma” priorities set forth by the World Energy Council in 2014 (see diagram).
“China, then the US and then the EU enjoy the biggest cost advantage from replacing diesel with LNG” claims Rebernik. “There is general agreement within the trucking industry that natural gas is the fuel of the future. The OEMs are all moving in this direction and most of the key global players are all are based in the EU, so we have a good base for starting here and then expanding throughout the world.” There is also a large potential market for retrofitting existing diesel vehicles.
Currently, at least, competition is low, however manufacturing issues and obtaining global certifications loom large. “We are looking in the USA and the EU to partner with an established Tier 1 manufacturer to make the standard pressure vessels, onto which we would install our own insulation system for future series production. Until then the first few hundred tanks can be delivered with the existing supply chain.
Managing fears of failure
Having already emerged successfully from several major challenges, Rebernik is confident that Cryoshelter and his growing staff of 10 employees will succeed: “That's the most fun – to see a problem, find a solution and to just try things,” he believes. “Austrian start-up founders and investors are always asked, 'how do you deal with the possibility of failing?' I spent three years in the USA and that question is just not on their minds. Failure is seen as a learning experience. Period. You just move on.
“In Europe, however, failure is seen almost as proof for a person’s inability to succeed. So a lot of energy goes into avoiding failure or being responsible for it in any way. That to a large extent determines every day of work life. As a consequence people try to know everything in advance to make sure not to fail – instead of identifying opportunities and simply verifying them one step at a time – together without pointing fingers. I can deal with my own fear, but to conquer theirs is a real challenge. Sometimes the only help is to bring in some ‘grey hair’ – experienced managers to ease the fear of failure.”
This story is brought to you in partnership with aws
As we reported back in June 2014, the Salzburg-based academic spinoff Authentic Vision received a large investment from the Dolby Family Trust after enjoying a successful incubation at the Business Creation Center Salzburg and obtaining seed financing from AWS and FFG. As they announce their big cooperation deal with HDMI, we checked in with co-founder Thomas Weiss to see how things are developing today.
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