ACES Profile: Lamera provides spin-out proof of concept for Chalmers

Lamera co-founder Mattias Grufberg receives the ACES award from Marja Makarow, Chief Executive of the European Science Foundation, at the awards ceremony in Paris.

Chalmers University’s School of Entrepreneurship has reversed that flow. There, it is the academic world that picks up technology from industry and provides the business development needed to carry the innovation to the market.

This business model for creating spin-outs has to date driven the creation of a portfolio of 50 companies valued at €70 million.

In the case of one such company, Lamera, whose founders won the 2009 ACES Award for Materials and Chemistry, it has proved to be super-efficient.

Back in 2004, Mattias Grufberg and Anders Axelsson, two young engineers, were sitting on the benches of the School of Entrepreneurship in Gothenburg, Sweden. The school had been asked by the Volvo Group to explore the potential of a technology invented at car manufacturer’s labs some years previously. Grufberg and Axelsson were assigned to analyse its potential, to write a business plan, and eventually to launch a start-up as the basis of their Masters degrees.

The technology stemmed from research exploring how to reduce the weight of Volvo cars without shifting from steel to aluminium, as many competitors have done. One Volvo researcher, Roland Gustavsson, had come up with a very interesting solution inspired by nature, and more specifically by the structure of birds’ bones.

His technology, Hybrix, is a “microsandwich” of hollow sheet metal that looks and behaves like solid metal. Like birds’ bones, it contains a lot of air, making it very light.

But the innovation never made it into the car plants: after the acquisition of Volvo Car by Ford, it stayed on the shelves. So the Volvo group, which kept the trucks, aircraft and boat engines business of the original Volvo conglomerate, together with its patents portfolio, turned to the School of Entrepreneurship to find a future for Hybrix.

Over the past ten years, the School of Entrepreneurship has developed a rather unique way to translate laboratory inventions into successful marketed products. Every year, it has launched five spin-outs that transform its students into real-life entrepreneurs. In this model, the owner of intellectual property (the Volvo Group in the case of Lamera) keeps 45 per cent of the newly created company. The founding entrepreneurs and the university share the remaining 55 per cent.

“For students it means a job and ownership,” explains an enthusiastic Grufberg. But to become the chosen entrepreneurs, the students have had to come up with a very solid business plan.

That was exactly what Grufberg and Axelsson accomplished back in 2005. “In transport industries weight reduction is synonymous with fuel efficiency,” explains Grufberg. With oil prices starting to shoot up, any technology that could reduce the weight of planes, trucks, wagons, boats, cars and so on would be very welcome. But the transport industries are also very established ones, with high barriers to entry and tortuous processes for the acceptance of new technology.

So Grufberg and Axelsson’s first step was to focus on a niche. “In the car industry, a weight reduction of one kilo translates into savings between €5 and €15 over the lifespan of the vehicle,” says Grufberg. “But in the aircraft industry, one kilo less translates into a saving of between €100 and €140 on kerosene a year.” So a tonne less on a 361-tonne Airbus A380 saves €140 000 a year for the carriers. Given this value proposition, Lamera knew where to focus.

But finding a niche was not enough. Targeting a multibillion industry, Grufberg and Axelsson needed to fine-tune their proposition. Planes are traditionally made of sheet metal, and any transformation at the material level has to go through a long certification and adoption process. “Composites were invented thirty years ago, but it is only today that they have become the preferred material for parts in the primary structure of planes,” says Grufberg.

With that in mind, the founders avoided a long entry time by adopting an easier target, in the interiors of airplanes. “Because sheet metal is cheap and simple to use there is a lot of it used in aircraft interiors. Entry time is a lot shorter, but the value of weight saving is the same. For example, there can be up to 100 kitchen trolleys in a commercial airplane made of sheet metal. Reducing their weight with Hybrix pays for the shift of technology within months.”

With a technology that can reduce the weight of steel by 70 per cent and aluminium by 30 per cent, Grufberg and Axelsson had a clear business plan that convinced not only the Volvo Group but also Midroc New Technology, the venture arm of billionaire Mohammed el Amoudi (according to Forbes, the world’s 43rd richest man). Midroc took a stake in Lamera, which has now raised €2 million to date. Grufberg and Axelsson’s holding was diluted to 12 per cent in the process, but they could start to develop the first production line.

With this first factory now ready to start shipping, they have confirmed with the value of their business plan. For the moment, their facility produces Hybrix sheet by sheet and not on a roll like in a classic steel factory, which makes it a little more expensive than solid steel. This means they need to find customers ready to pay that little extra to get a fast pay-off – such as the aircraft industry, which is under intense cost pressures.

With scaling, Lamera will be able to reduce the price of Hybrix and expand its niche. It also plans to apply the technology to other metals, such as copper, where scarcity rather than fuel efficiency drives the need for weight reduction.

With their focus on to accelerating the time to market, Grufberg and Axelsson are in a good position to exploit these opportunities because they have already secured the first revenues.

And for Chalmers School of Entrepreneurship, which supported Lamera at the beginning with office spaces and €10,000 in seed money, Lamera is a clear proof of concept.