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The Future of Sustainable Powertrains...Project Timeline £1.9bn Carnot ExitValuation After 3 years...
Transcript of The Future of Sustainable Powertrains...Project Timeline £1.9bn Carnot ExitValuation After 3 years...
Page 3Executive SummaryCarnot is developing game-changing ceramic engines with
double the efficiency and half the fuel consumption / CO2
emissions of current engines. They will revolutionise the
industry and bring the internal combustion engine into the
21st Century. Primary target markets are Generators and
long-haul transport, for which there are no alternatives to
combustion engines. We are seeking £500,000 for phase 1
of our 3-year R&D-focused strategy to generate IP, run a
bench prototype before selling the company to a high-
volume manufacturer.
Page 1
Carnot
£500kInvestment
£1.9bn4-Year Exit Valuation
£540bnTotal Addressable
Market
ü Double efficiency
ü 30% reduced total cost of ownership
ü High margins for manufacturers
ü Operation on all fuels including biofuels and hydrogen
ü World-class team
ü Carnot is the only entity developing this technology
EIS/SEISTax Relief
Page 3
7 million premature
worldwide deaths in 2018 due to
air pollution
In 2016, 92% of the world’s population
lived in areas where air pollution exceeded safety limits
275 million people at
risk of flooding worldwide due to
climate change
1,576,593Death Toll
105,083Death Toll
39,536Death Toll
59,467Death Toll
1,614,620Death Toll
40,000Death Toll
The Global Problem
47,703Death Toll
68,520Death Toll
31,141Death Toll
Page 4Market Opportunity
• Net Zero Emissions Target by 2050• 30% reduced HGV emissions by 2030• 30% increased efficiency of ships by 2025
CLIMATE CHANGE
• Manufactures can’t adapt, looking to start-ups for solutions• No production-ready technologies for Gensets, HGV’s and
Marine to enable 2050 target.
INDUSTRY IMPACT
• $14bn in Financial Penalties for OEM’s and Operators• Manufactures and Operators looking to improve current low margins
ULEZ$14bn
OPPORTUNITY
CO2
Page 4
50% Gross Margins for
Manufacturerszero-carbon operation 46% Average Fuel saving
Page 5The Carnot Solution
Conventional engine
CarnotCarnot Genset
Exhaust30%
Power 70%
Fuel Energy
Fuel Energy
Power
30%
35%Cooling
Exhaust 35%
CO2
35% BFE
70% BFE
30% reduced total cost of
ownership
Meet the team
Archie WATTS-FARMER (MEng, CEng)CO-FOUNDER, CEO
Page 6
Bo GӦRANNSONSENIOR CONSULTANT
Francis LEMPP (MSc)CO-FOUNDER, ENGINE DESIGNER
Nadiur RAHMAN (MEng)CO-FOUNDER, ENGINE DESIGNER
Wolfgang LEMPP (MSc, AMPAS)NON-EXECUTIVE DIRECTOR
Peter FARMER (CA)NON-EXECUTIVE DIRECTOR
Richard KIRK (PhD, AMPAS)SENIOR CONSULTANT
Innovative and Dynamic Founders
Experts in Start-up Growth and Prototyping
- Awarded Two Innovate UK Grants
£540BILLION
Total Addressable Market
6.2%CAGR
Primary MarketsGlobally Until 2040
£61.5BILLION
Primary Target Markets
88%Global Market share
for ICEIn 2020
4%Global Market share
for EVIn 2020
HGV Propulsion/APUs
CAGR 5.5% Predicted until 2040
Marine Propulsion/APUs
CAGR 6% Predicted until 2040
Page 6
Generator SetsCAGR 9% Predicted until 2030
Page 7Target Markets£540 bn
£61.5 bn
£12.3 bn
Total Addressable Market
Primary Target Markets. HGV’s, Marine propulsion and Generators
20% market penetration after 10 years
Page 8Competitive Landscape
Total Cost of Ownership Low Medium Very high Medium
Refuelling / Recharging Minutes Hours Minutes Minutes
Life-Cycle Emissions Low Medium Low High
Range Excellent Poor Poor Good
New Infrastructure Required None Very high Large None
Reliability/ Life/ Maintenance Good Poor Poor Good
CarnotCarnot Gensets Battery Fuel Cell Conventional ICE
Page 7Page 9Customer Value Proposition
35%Lower TCO than best in class ICE
For Generators
£180kTCO saving for Carnot Genset
43%Reduction in
fuel costsFor Generators
28%Lower TCO than best in class ICE
For HGV’s
£355kTCO saving per
HGV
48%Reduction in
Fuel costsFor HGV
Expensive
Low Cost
High RangeLow Range
CarnotCarnot Gensets
Conventional Engines
Battery Tech.
Fuel Cell
£500kInvestment
First Round
£1.9MInvestmentSecond Round
£2MInvestment
Third Round
£1.9bnExit Valuation
4 Years
Phase I
Phase II
Phase III
PCT International Patent Applications
Test all Key-risks and Sub-systems
Run a Motored Prototype
Run a Fired Prototype
Page 8
EXIT
Page 10Program Milestones
2020 2021 20232022
IP Generation
Stakeholder Review
Stakeholder Review
2020 2021 20232022Phase I
£500k
Company Headcount
Investment Raised
8
Motored Prototype
Page 9Page 11
R&D funding and IP generation
£312k
£1.9M
Company Headcount
Investment Raised
22
Test key-risk sub-systems
Phase II
R&D funding and IP generation
£1.33M
£2MInvestment Raised
31Company Headcount
Run a Fired Prototype
Phase III
£1.34MR&D funding and IP
generation
(Cash Flow)(Cash Flow) (Cash Flow)
Project Timeline
£1.9bnCarnot Exit Valuation
After 3 years
£1bnCruise Automation
Acquired by GM
£235MMaxwell Tech.Acquired by Tesla
OEM’sCommonly invest
in early rounds
Page 8Page 10The Exit StrategyAcquired by Large
Manufacturer
4238
27
+110%
+140%
2015 2016 2017
No.
of A
cqui
sitio
ns
Powertrain Startup Acquisitions
Rising Trend in StartupAcquisitions
£1.9bn Exit Valuation
Based on DCF analysis and market examples
2016
2017
2019
2019
Expenditure PHASE 1 PHASE 2 PHASE 3 TOTAL
R&D £312k £1.33M £1.34M £2.99M
Business Development £0 £91k £91k £181k
Capital Expenditure £135k £146k £191k £472k
Other Overheads £43k £242k £304k £589k
Cash Flow -£490k -£1.81M -£1.93M -£4.23M
Page 10Page 12Financial Forecast
8xExit Multiple
Assumed
£1.9bnExit Valuation
4 Years
£4.4 MInvestment
Total
DCF10 year Company
Valuation
Phase 1 – £500k
£312k R&D
£135k Capital Expenditure
£43k Overheads
EIS/SEISInvestors Eligible
for Tax Relief