It’s hard to think of a bigger technology opportunity than energy storage.
Everything from our energy supply, transportation, medical equipment, phones, tablets, computers, sensors – everything with a plug, basically – is impacted by the prospect of longer lasting, energy dense batteries. Such development will impact the air we breathe, the temperature of the planet, the healthcare we receive, our mode of travel, the knowledge and intelligence we’re able to access – pretty much everything.
So huge is the opportunity that every major technology & engineering company in the world is active in the space. Amazon, Google, Facebook, Samsung, Microsoft, Tesla, Dow, Panasonic, LG, Sony, GE, Ford, Toyota (and many more) are all a part of the battery supply chain, each one working, and working together, to create batteries or systems that will lead to longer lasting, more energy efficient products.
At the front end of this innovation lies the battery companies. Ten years ago, there were scores of young, highly innovative start-ups, many of them spin-outs from universities or companies. Significant money was raised and lost as companies and investors realised the challenges associated with such technology.
An auspicious start
Nexeon was one of the companies to emerge during this time. Started in 2007 on the back of research from Imperial College London, the company was one of Europe’s most talked about companies. It had very promising material and IP. It had a first-class management team with some of the world’s leading battery technology experts. It had raised significant money for scale-up and development, and had corporates from all over the world ready to partner.
Nexeon Chief Executive, Scott Brown:
“I joined Nexeon in 2009 and there was a real sense of excitement, not just in the company but in the industry generally. Lots of battery companies were getting funded, all claiming to have solved some of the fundamental chemistry issues associated with lithium-ion platforms. We were one of those. We had tremendous momentum and there was a high degree of confidence in our platform. This enabled us to grow quickly and engage with many partners across the supply chain.”
In its first five years, Nexeon raised £55 million, making it one of the most well-funded materials businesses in the UK, and the most well-funded battery company in Europe. What’s more, there was such confidence in its technology platform, it was considering manufacturing material to complement its licensing business model.
As it developed, however, technical challenges emerged. The technology was struggling to scale and performance was suffering. Customer trials were put on hold, and while partners were supportive, there was no denying the scale of the challenge. Recalls Scott:
“It was tough. Here we had gone out and generated such momentum with so much excitement behind us, but the material just wasn’t working in the way we hoped. We looked for different solutions but in the end we had to face facts. What we had just wasn’t working.”
In 2013, the company considered its options. It went through redundancies. It suspended its programmes with partners and early customers. It also considered its strategic options, offering to return money to investors, sell assets and close the business.
The investors considered these options but instead re-directed the conversation. ‘Every other battery company is in the same boat as us. Given a clean sheet, how might we approach things, knowing what we know now?’ Ideas were generated. A plan was formed. At the end of this process, the investors and board had one message – “let’s keep going.” As Scott tells it:
“I’ve been impressed with our board throughout but this was one time where they really stood out. Despite our setback, despite scores of other battery companies failing and closing down, they urged us to keep going. They believed that what we were doing was seriously important and we all agreed that despite the risks, the size of the prize made it worth fighting for.”
Older & wiser
In mid-2013, Nexeon set off again, older, wiser and still ambitious. The company widened its field of research, recruited additional talent and set off to create new solutions. Starting over was difficult. Recalls Scott:
“It was one of the most difficult phases of my career, and I think the rest of the team probably felt the same. There were many times when I’m sure each one of us wanted to throw in the towel. But that’s the nature of the business we’re in. It takes technical and engineering talent, but it also takes grit.”
The board was right to encourage the company. Earlier this year, Nexeon announced new financing of £30 million, bringing its total fundraising to £85 million. Underlying this was the development of new material that offers the most promising breakthrough the company has had in years. While it is still in development, early testing has shown it to be very promising and competitive. Commercial discussions have started again and the company is generating momentum once more. Says Scott:
“There’s still a way to go, but we have come a long way. We’re in as good a position as we’ve been in since we started, and that’s a good place to be right now. We are excited about the new material and we’re beginning to share it with partners. We are expanding our reach geographically, with a new office in Japan and one soon to be opened in the US. Of course, we’re out of the woods yet. The battery industry doesn’t work like that, I’m afraid.”
Nexeon’s journey is representative of many businesses that aim to change the world. It takes talent, resource, sacrifice, resilience, time and yes, even failure. Many companies in Nexeon’s place would have chosen to close down. Many did. But real success comes from not stopping when most would. Real success emerges only when you continue on.
At the Peloton Leadership Network, we understand that success is a journey.
The Peloton Leadership Network is a management consulting group that helps young technology businesses maximise their talents, capabilities and opportunities. Through executive data analytics, coaching & education and executive search services, we help transform high potential businesses into high impact companies.
For more information, please go to www.pelotonleadership.com