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Successful British engineering firm to invest millions into the Midlands through research into automotive supercharging and industrial air compression.
Lontra, the fast-growing Midlands firm backed by the Technology Strategy Board and The Carbon Trust, today announced the opening of a fresh funding round to secure new licensees for its ground-breaking Blade Compressor®.
The funds will support expansion into lucrative new markets in automotive supercharging and industrial air compression. The move provides investors with an opportunity to back a firm that this year granted global engineering business Sulzer a license to manufacture pumps based on its technology in a deal worth tens of millions of pounds in revenue over the next 20 years.
Funds raised through the round, expected to be Enterprise Investment Scheme qualifying, will fund a multi-million pound research and development effort to extend Lontra’s proven and patent-protected technology into new markets. Lontra’s Blade Compressor® is a replacement design for the industrial pumps and blowers that consume 10% of European industrial power. It represents the first clean sheet design in nearly 80 years for a market worth well over £20bn per annum, where today’s machinery is still based on designs dating to the 1935 Screw Compressor, Roots Blower (1867) and Vane Compressor (1588).
Lontra’s recent license to Sulzer was for the £600m per annum municipal and regulated waste water aeration market. Pumps incorporating the Blade Compressor technology are equally applicable to the industrial waste water aeration market, which is three times as large at £1.8bn per annum. Future R&D will adapt the Blade Compressor technology to match the needs of the industrial blower market with a view to seeking licensees for non-water applications of the same machines for industries ranging from cement, fabric and carbon black manufacturing to power generation worth a combined £2bn per annum.
CEO and founder Steve Lindsey, likened to British inventor and industrial designer Sir James Dyson by The Carbon Trust, says:
“Our technology is proven, licensed and in production. The myriad benefits of our novel design include low maintenance, low cost manufacture and low energy use. We have demonstrated the Lontra technology to great acclaim in the Water Industry with Severn Trent Water’s first machine having run the equivalent of 3 years duty without issue with their own figures showing a saving of electricity of 21%. This is a step-change in efficiency where many industries chase a few per cent gain. On the back of this trial Lontra won at the prestigious 2013 Water Industry Innovation Awards. We are now seeking investment to take this proven technology into new and even larger markets where our machine’s very high reliability and step change in efficiency will make a significant impact.”
To date Lontra has secured £5m toward the development of the technology and the business: £2.9m equity; £1.1m development finance/IP license revenue from partners; and £0.94m from public R&D grants. Equity investors to date include Imperial Innovations, Seven Mile Capital and MidVen, together with angel investors. Board members and their associates have invested £1.4m.
Lindsey is supported and mentored by Executive Chairman Peter Watson OBE. The former engineering director for British Rail was also Chief Exec and Chairman of AEA Technology where he was part of the team that licensed the Lithium Ion battery to Sony, technology that is today used in nearly all laptops and mobile phones. Lontra’s UK business development is run by the ex-Sales Director of leading compressor service company Motivair and the firm has a strong and growing representation in the US.