Kinetica Ventures is a post-incubator “accelerator” that supports Alberta innovators
Alberta oil patch innovators are about to get another helping hand up as the Alberta and Canadian governments step up funding for Kinetica Ventures, a post-incubator program headquartered with Calgary Innovates.
One of the best kept secrets in Canada is the size, innovativeness, and export-orientation of the Alberta oilfield services and manufacturing sectors, which generate billions in annual revenues and employ tens of thousands of highly skilled workers.
In 2013, 1,852 companies in the sector generated $13.5 billion of revenue and employed 45,505 people, according to figures provided by the Alberta government. Those firms exported a very healthy $3.5 billion of goods and services.
There are two types of innovator, according to Kevin Frankowski, Kinetica’s leader.
The first is the “garage entrepreneur” who works in the industry, has technical expertise, and thinks he (or increasingly, she) has a solution to a problem. The sector is dominated by companies of this type. And Alberta is very good at generating a lot of them
The second is a university or industry researcher who has developed a new technology in the lab or the field and think it’s ready for prime-time.
Some of those entrepreneurs are part of the Calgary Innovates incubator, which helps entrepreneurs who walk in the door with a good idea but not much else. Once they have a business plan, start up capital, maybe a functioning prototype, they’re ready for the next step, which is Kinetica.
“Incubators being basically very early stage startups. And accelerators sort of later stage startups. Further down the maturation path,” Frankowski said in an interview.
Kinetica was soft launched last summer and currently supports 10 companies.
Some are working on greenhouse gas technologies, either capturing carbon or reducing GHG emissions. Another company is developing an additive for drilling fluids, while another is developing a very fast, low-cost, and accurate technology for hydrocarbon leak detection in pipelines and tanks, says Frankowski.
But once the products are ready for the market, the companies face special challenges establishing themselves in the oil and gas market, where producers are risk-averse and technical failures can cost millions of dollars.
“There’s a fair amount of de-risking that needs to occur. External third party technology validation. Testing your pilot sites, that sort of stuff,” said Frankowski.
Then there is the “implementation gap” between having a product that works and having customers.
“There’s this gap of having no customers because no one’s willing to try it [the new product]. So we help with that,” said Frankowski.
The Government of Alberta will partner with the federal government’s Canada Accelerator and Incubator Program (CAIP) to support Innovate Calgary and its Kinetica Ventures program. As part of a two-year funding commitment the Alberta Government will provide $500,000 per year to Kinetica Venture. The Kinetica Venture program is also supported by the federal Canada Accelerator and Incubator Program.
“The Alberta government is facing serious fiscal challenges with the falling price of oil and it is important that we continue to support innovation in Alberta,” said Don Scott, Alberta minister of innovation and advanced education in a press release.
“Our support of the Kinetica Ventures program gives entrepreneurs and investors increased capacity to commercialize their ideas while helping to grow and diversify our economy.”
These investments by Alberta and its partners through CAIP will allow business incubators to provide more of the services that guide market-oriented, innovative companies along the road to product commercialization. Initiatives supported through Kinetica can add value in the energy industry by improving processes, enhancing productivity and creating new applications of existing or novel technologies to enhance overall competitiveness, said Peter Garrett, president of Innovate Calgary in a press release.
“Kinetica’s mandate is to better understand the energy industry’s key innovation challenges, identify researchers/entrepreneurs and startups with promising technology solutions, and then help accelerate commercialization through collaboration with industry and investors,” said Garrett.
“We are excited to partner with Alberta Innovation and Advanced Education to deliver world-class energy innovation from Alberta.”
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