Pavegen’s technology converts footsteps into electricity to power services in high-footfall locations and provide real-time data for analytics. Founded in 2009, the company has delivered over 100 projects, including Heathrow Airport and Harrods, across 30 countries generating a cumulative revenue of over £2.5 million. With a global distribution network in place and internationally granted patents, the next step is scale.
Increasing demand for new types of renewable energy that are low capital, smart enabled and produce electricity where and when it is needed.
- Lack of viable solutions to harvest kinetic energy in our cities, this source is currently untapped.
- Legislative, social and economic demands to increase renewable energy mix.
- Traditional renewable energy faces planning and real estate constraints due to their environmental impact and need for land.
- Smart cities require better data to manage energy, security and transport.
Renewable energy sources have limitations when implemented within cities. We believe Pavegen will play a significant part within our future energy mix.
Studies by the Carbon Trust have shown that urban wind turbines are negligible for CO2 savings within cities, due to the effect of buildings on wind speed.
In comparison to Pavegen, solar is restricted to already crowded rooftop locations and at ground level has limited real estate free from the shading effect of buildings.
The world is currently experiencing the largest wave of urban growth in history. By 2050, 75% of the 9bn population will live in cities.
It is estimated that an average person takes over 216 million steps in their lifetime. The potential to harvest kinetic energy from movement within cities is vast. Pavegen are currently market leaders in the kinetic floor harvesting industry of which the energy harvesting market as a whole is projected to reach a value of £4.2 billion by 2019.
Our technology has been deployed in high footfall locations around the world, including transport hubs, retail sites and offices.
The UK is committed to reducing its CO2 emissions by a factor of 80% by 2050.
Our customers need new tools to meet these legislative requirements and boost CSR initiatives. This is particularly important in new build infrastructure.
Global requirements such as BREEAM and LEED actively encourage the movement towards greener and smarter cities. Pavegen perfectly complements these schemes.
Smart cities are currently driving the development of new energy systems to couple power generation with local demand.
Pavegen is designed to produce power where and when it is needed. Our energy source is predictable and available on demand, simply requiring the power of a footstep.
Unlike solar and wind energy where generation depends on the time of day and the weather, Pavegen’s power output is closely coupled with demand; you generate the power that you use when you use it.
As the Internet of Things megatrend continues, using our API, Pavegen are in a strong position to facilitate efficiently managed systems and services within our cities.
As well as power, Pavegen produces real time wireless data. This means that pedestrian flow and energy production is monitored. Our data provides cloud-based analytical services that produce valuable information to our customers. Retailers will get real time insights into shopper behaviours whilst transport sites will gain a detailed understanding of people flows.
It is projected that there will be over 200 billion interconnected devices by 2020. Pavegen smart floors will control energy use, lighting demand, information services, passenger flows and more.
A data-ready, renewable energy product that can be installed where many other technologies are limited.
A tile of 5 parts:
- Custom top surface
- Outer box structure
- Patented energy generator
- Smart power output
- Wireless data
On day 1, the technology cost over £5,000 for a single tile. Today, we batch manufacture the product for under £250. This has been achieved through reinvestment of our profits and the efficient utilisation of early funds. The next stage is to achieve price parity with regular flooring across our key markets.
- On Demand Power Pavegen energy source is designed to be predictable and available on demand, simply requiring the power of a footstep. Where there are people, you need light.
- Smart Power/Smart Storage The tiles can harness energy from footfall to directly power applications, connect to the grid or store the electricity for later use.
- Deployable Power Source Pavegen can be installed anywhere with a floor, to generate renewable electricity for local applications.
- Real-Time Analytics The system can collect and communicate real-time footfall data for analytics, directional information about pedestrian movements.
- Wireless Data/API Interconnectivity with the cloud and application software. Machine to machine control (M2M).
- Fully Certified The technology has been tested to withstand over 20 million footsteps, in extreme weather conditions and even submerged underwater to a depth of 1.5m.
- Easy to Install Pavegen technology uses a plug and play system for easy installation.
- Custom Surfaces A range of textures to fit into high-end retail, transport and public realm works.
We have received global recognition for our patent from companies and professional bodies including The World Technology Award, Shell and Skanska.
Pavegen has 2 granted patents in USA and Australia, along with 6 applications in the national stage (Europe, China, India, Brazil, UAE and Qatar) expected to be granted this year. The company’s first patent was filed in 2010, with a priority date of 2011. The patent application relates to the core technology within the tile and the method of converting downward movement into energy.
We have registered designs and trademark, including UK, AU and China.
Pavegen aims to file an additional 3-4 patents in 2015 that will provide further protection from a technical and a software ‘smart systems’ standpoint.
The Pavegen tile has the ability to broadcast wireless data from each footstep. This data gives customers insights as to how people move in the public space. As the cloud-based software is developed further it could become common place within the retail, industrial and domestic sites, enabling them to increase revenues by improved service leads. There are a variety of applications currently under development as highlighted below:
Security: Detecting pedestrian presence in secure areas as people walk over the tiles.Transport: Crowd management and passenger flow within transport and high footfall urban sites.Retail: The Pavegen technology can help retailers and shopping centres to increase revenue and profitability by analysing how people move within their stores.
Management of power, control of applications and connectivity to cloud-based data services is achieved through the use of a conventional PC or laptop. Data services provide footfall and energy feedback to our customers through a range of customizable cloud-based applications.
As Intel are to computers, Pavegen will aim to be to energy haresting.
We aim to mass manufacture our tiles at the same cost as conventional flooring to provide on-demand energy generation, real time data analytics and M2M control. Beyond the Pavegen tile, we aim to repackage our IP into a suite of kinetic energy harvesting products and using our global patent we aim to become an ingredient brand.
By refining our API for M2M interaction and developing the technology for surfaces such as stairways and roads, we intend to ensure that Pavegen remains at the forefront of the footfall energy harvesting sector.
The next generation of Pavegen product could replace the power hungry PC with a compact, low energy, secure wireless gateway and power management system. A new platform of cloud-based analytics will provide a new range of insights, information and services to our customers.
Pavegen have made great strides since incorporation in 2009 delivering cumulative revenue of £2.5 million and growing. We now have a structured approach to both the rental and permanent markets for Pavegen.
Pavegenlabs.com was established in 2015 to separate brand activations and distinguish the rental and permanent offerings of the business. Pavegenlabs.com aims to operate as a ‘fully integrated innovation agency to brands’ that is led by a separate sales team devoted to experience-led marketing.
Permanent projects are the key focus for Pavegen Systems.
Year on year, Pavegen have seen increased demand for permanent solutions. Since the first permanent install in 2011 we have seen a drastic shift in client demand as we scale the permanent offering. In 2013, 40% of our revenue was attributed to permanent projects moving to 65% in 2014. We are on target to increase this further in 2015.
Permanent project statistics:
- 2011: 1, UK
- 2012: 2, UK & Australia
- 2013: 13, 9 countries
- 2014: 23, 8 new countries
- 2015: Forecasting >40 projects globally
The current Business Development team comprises four individuals who focus on achieving high rates of inbound lead conversion.
Short term sales strategy post fundraise (6-12 months)
- Scale the pavegenlabs.com to become a ‘fully integrated innovation agency to brands’
- Double the size of the BD team to 8 people hiring 4 focussed outbound sales executives
- Focus on established distribution channels to execute a rapid growth in permanent sales
- Establish agreements with key industry partners (sales, marketing and install)
- Scale the data service through current key client base in transport and retail specifically e.g. Heathrow Airport and Westfield
- Convert proven data service to a scalable, recurring revenue service model
Medium term sales strategy post fundraise (12-24 months)
- Distribute suite of energy harvesting technologies through established network
- Secure licence agreements under global patent with key partners
London is expected to grow by 1.8 million people by 2031; this is the equivalent of an entire tube train of people every 3 days.
Meeting the energy demand within our cities requires a new source of power. Pavegen intends to meet that demand. Based on our understanding of the market, we believe there are no other companies currently able to deliver commercially viable low-maintenance footfall or vehicle power generation for the built environment.
By 2020 it is projected that electricity prices in the UK will rise 40% on 2010 levels. In conjunction with this, the global LED general lighting market will have a 70% market share in the same time frame. Our products and services are intended to take advantage of this trend.
Global smart cities market to reach £2 trillion by 2020
We believe that Pavegen is positioned perfectly to take advantage of this growing market.
The energy harvesting market is expected to reach a value of £4.2 billion by 2019
Based on our understanding of the market, Pavegen consider ourselves to be the global market leaders in the footfall energy harvesting sector. The next stage is to develop a suite of energy harvesting products through iterations of our current patent, further increasing our market share.
The global flooring industry projected to reach £207 billion by 2020
As we to continue to scale the technology and reduce cost towards parity with regular flooring we intend to become the product of choice for architects and designers at specification stage for new build infrastructure.
With the exponential growth of the Internet of Things, Pavegen have developed their technology in line with the big data megatrend through the use of our wireless API. The tiles can collect, monitor and communicate real-time data, calculating footsteps per tile and total energy usage, as well as connecting to social media. The ability to interact with surrounding devices and objects makes Pavegen ideal in the smart city environment, contributing towards Out-of-Home advertising, heat-mapping, footfall data visualisations and wayfinding solutions.
Our Sales and Markets:
In transport, Pavegen is designed to power lighting, wayfinding solutions and advertising. Data can be used to efficiently manage energy/security systems and provide people flow analysis.
The first public install of Pavegen was at West Ham Tube, funded by the Olympic Delivery Authority and TFL. Our technology was installed on a footbridge connecting the station and the Olympic park to store power during the day and power lights through the night. This was an invaluable case-study location for us to monitor the units’ performance. In 2012, we secured GDF Suez as our first permanent corporate rail client to install tiles to power LED lighting/phone charging. In 2014, Pavegen were commission by Ferrovial Group to install the largest array of public footfall energy harvesting technology of its kind within transport at Heathrow Airport, London to power corridor lights and provide real-time data analytics.
Additionally to lighting, Pavegen can be used in retail to monitor and display customer footfall. One opportunity for retailers is to identify footfall ‘hotspots’ within their stores, allowing for targeted advertising.
In 2012, the retailer Uniqlo activated an experiential/digital campaign using the installations of tiles around key sites within London and Paris. Most recently, Pavegen installed 10 tiles in Harrods powering LED lighting surrounding the technology. Our most high profile retail project will be at Westfield Stratford in Q4, 2015. The installation is set to be the largest array of its kind in the UK, centred within the heart of one of the largest urban shopping centres in Europe. We believe that the opportunity for energy harvesting within retail is substantial and our sales strategy will reflect this into 2015/16.
“Imagine if the walk to work in the morning could power the lights during the walk home in the evening.”
In 2012, we partnered with Siemens to install 5 tiles in Melbourne, Australia, to contribute to the cities low carbon initiative. This year we installed at the Milan World Expo with Coca-Cola. Our 30-tile dance floor is installed in the client’s corporate pavilion, showcasing innovation and creativity. 2015 marks the confirmation of our most high profile US public install. In collaboration with the US Department of Transport and ZGF Architects, Pavegen are contracted to install a 70 tile “kinetic pocket park” minutes away from the White House, representing the largest install of its kind in America. Pavegen believe that there will be a spike demand within public realm projects as product cost reduction is achieved.
Within offices, the energy harnessed from employees can contribute towards energy-efficient systems by powering and triggering lighting only when people are there.
In 2013, Pavegen completed a permanent retro-fitted installation of Pavegen tiles at Renaissance Works contemporary London offices, seamlessly matching the existing style and design of the site. More recently, we have partnered with SNCF to install 6 tiles along a corridor in their Head Office, Paris, as part of their focus on research, innovation and development. The installation is powering LED lighting and displaying an interactive screen of the amount of energy generated. Pavegen and SNCF are in conversations for further collaboration in 2015. RATP, who own the Paris Metro system, have also recently engaged with us commercially.
Pavegen have experienced demand and continues revenue growth from the schools market.
In 2014, we integrated our technology with solar to power an innovative phone-charging station at Webster University, available for public use. Also in 2014, Riverdale School in New York installed eight tiles inside the cafeteria where the energy stored is used to power lighting and a phone charging station. Most recently, Bloomington High School placed tiles in the main entrance to power educational boards and a phone-charging station. Using our API, the tiles also collect information on the number of steps throughout the day, displaying the data.
Working to promote sustainability within the events sector, Pavegen have installed within football pitches, stadiums, dance floors and marathons.
We installed 178 tiles at the climax of the 2013 Paris Marathon, commissioned by French energy specialists Schneider Electric. In 2014, we installed 200 tiles into a football pitch redeveloped by Shell in Morro da Mineira. The tiles work alongside solar panels to power the lights for up to 10 hours on a full battery, creating the world’s first people-powered football pitch. In 2015, we partnered with Samsung to install a 68-tile walkway in one of Africa’s most prestigious shopping centres. After storing the energy generated for a few months, the power is then distributed to rural areas. Event activations for Pavegen are run through our www.pavegenlabs.com brand.
Laurence Kemball-Cook, CEO Founder
Laurence founded Pavegen in 2009 after completing a degree in Industrial Design & Technology. He encourages a revolutionary approach to the renewable energy industry, whilst leading the Pavegen team. Laurence generates international media and press interest and is a regular speaker on technology and entrepreneurship, including TED and the UN’s +20 climate conference.
Charlotte Mason, NED
An INSEAD Executive MBA, Charlotte has worked for leading ERP software vendors in various countries. She has a Masters in Manufacturing Engineering & Management and holds various board seats including a NED of INSEAD National Alumni Association UK and is an INSEAD Entrepreneur-in-Residence. She is also a professor at HULT International Business School, a mentor to London Business School’s Entrepreneurship Summer School and has delivered lectures at Cambridge Judge.
Chris Smith, CFO
Is an experienced SME Finance Director with 20 years’ experience of working with rapid-growth early stage technology companies, turnarounds and PE-backed investments on a portfolio basis. A commercially minded chartered accountant who thrives on change, Chris helps his businesses to ensure that they are investor-ready, that funding plans are complete, understandable and realistic, and that companies have appropriate systems and controls in place.
Richard Kemball-Cook, NED Chairman
As a Chartered Accountant Richard was Chief Accountant to the Royal Ordnance Factories. Hired by BT plc. He maximised profitability on the company’s engineering processes as its network changed from fixed line to mobile. He became an expert witness on inter-utility network disputes before co-founding Pavegen in 2009.
Don Eungblut, Investor NED
Don is an experienced board-level mentor, advisor and investor in early stage technology-based companies. He brings a wealth of knowledge from a wide ranging career encompassing telcoms, IT digital media, international marketing and management consultancy. His experience in guiding business, product and service innovation aid his role as investor director.
Craig Webster, CTO
He was co-founder and director of the successful clean-tech start-up Aveillant Ltd and Head of Clean Technology at Cambridge Consultants. He has an extensive track record taking new leading edge technologies to market. Craig is an experienced technical leader and has built and led teams to develop high efficiency electromechanical systems including electric vehicle drives and low cost cordless power tools.
These notes should be read alongside the Financial Snapshot
- Permanent sales and rental of Pavegen tiles.
- Rapid growth through established distribution channels for new product developments. Currently in 8 countries.
- IP Licensing agreements with key global partners.
- Data services to relevant key markets. EG. Retail, footfall modelling and people tracking.
- Current Business Development team is 4 people and 100% of sales are finalised through incoming/reactive leads.
- Post funding, Business Development team will double to 8 people and their focus will be on securing focused, outbound active lead generation to sell product to clients where we know the product will be of large commercial benefit.
USE OF FUNDS:
- Invested funds will be used to pay for an acceleration in the development of the existing product to make it as efficient as possible. This will be done using outsourced expertise.
- Once the development has been completed, further funds will be spent on tooling to enable the cost reduction and mass production of the improved product.
- We will be growing our team substantially to meet our growth targets supplemented with external resources for expertise in individual areas.
EXPENSES AND PROFITABILITY:
- As the business has been trading for 4 years there is an established team and effective controls to ensure the efficient use of resources.
- Gross Margins are established at around 65%.
- The funding will enable the business to incease spend on marketing and headcount, but we anticipate profitability in mid-2016, leading to strong levels of EBITDA thereafter.
EXISTING DEBT OR EQUITY INVESTMENTS:
- The company has no debt.
- To date £1.02m has been invested in a Friends and Family round and two Angel rounds.
- The business can operate with the planned level of CrowdCube investment, and will then raise in excess of £2m in 2016 to enable further global development.
The Exit Strategy
Please note that A Ordinary Shareholders’ pre-emption rights on new issues can be disapplied by board approval (which shall include the Investor Director where appointed). Please see the attached explanatory note and Articles of Association for more detail and obtain indepedent advice if necessary.
There is also a 10% option pool which will dilute all shareholders (including the Crowd) equally if the share options are granted and exercised.
Pavegen considers itself to hold a market leading position in the footfall energy harvesting market and is confident that it can be a highly scalable business. Management see it as a potential future public company or acquisition target as part of a trade sale. Pavegen sits across a number of different spaces, including renewable energy, ‘smart products’, energy harvesting and flooring. A trade sale exit is most likely to either a large infrastructure business, a flooring or a data driven internet company.
Below are some notable acquisitions of similar businesses in the smart, flooring and infrastructure space to provide an insight of the targets that Pavegen aspire to.
Nest the smart thermostat maker acquired by Google for $3.2 Billion in 2014.
‘Smart Things’ Smart technology app company that synchronises connected devices and gadgets to a single hub- Smart building automation: Samsung – $200 Million.
IVC Group – Flooring vinyl business: Mohawk Flooring – £1.2 Billion.
This company is offering both A and B shares. If you invest £25,000 or more you will receive A-shares which have full voting rights. If you invest less than £25,000 you will receive B-shares which have no voting rights or pre-emption.
Please note that A Ordinary Shareholders’ pre-emption rights on new issues can be dis-applied by board approval (which shall include the Investor Director where appointed). Please see the attached explanatory note and Articles of Association for more detail and obtain independent advice if necessary. There is also a 10% option pool which will dilute all shareholders (including the Crowd) equally if the share options are granted and exercised.
Pavegen has submitted their plans to raise money, details of their structure and trade etc. to HMRC and is awaiting advice on whether or not the proposed share issue is likely to qualify for Enterprise Investment Scheme (EIS) tax reliefs relating to their shares.
Tax relief is available to individuals only, who subscribe for shares in an Enterprise Investment Scheme (EIS). Relief is at 30 per cent of the cost of the shares, to be set against the individual’s Income Tax liability for the tax year in which the investment was made.
If you sell, give away, exchange or otherwise dispose of shares, tax reliefs can reduce your Capital Gains Tax bill. Your shares must meet certain conditions to qualify for these reliefs.
The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investors, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.
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