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VEN21 by Lab26 team

We are pleased to share with you another investment opportunity.

LAB26 is a startup with a VEN21 prototype solution developed for predictive maintenance of rotating equipment (pumps, compressors, mills, manufacturing machines…) for companies having difficulties installing IoT on older types of machinery. VEN21 can be easily installed without machinery modification or invasive methods, in most cases also by user. 

 

Industry 4.0. is a new mantra within existing players. The team made a pivot last year, observing the market and finding the right target spot. A team of technology experts from the IoT field is offering software solutions, using hardware from the market, and building it as a solution – easy to scale and expand. The team is looking for 100.000 EUR to finish AI development and start making pilots within different industrial and other companies.

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We will be allocating slots as follows:

  1. Business Angels of Slovenia members
  2. BAS partners

Further information:

  1. The minimum investment is EUR 10,000
  2. We might have to cut back if we are oversubscribed
  3. Accepting allocations until the 30th of March 2022 (if not oversubscribed earlier)

 

If you are interested, please email 

nina.dremelj@businessangels.si

maja.krizan@businessangels.si or mark your interest directly here 

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About VEN21 Team

Dr. Aleš Suban – Managing Director, responsible for business development and digital change lead. Founder of Znanost za varnost d.o.o (Science for safety Ltd.) and Lab26, Technology Innovation Lab. I have D. Sc. (PhD) in Maritime sciences and transport from University of Ljubljana and history of working in the field of mechanical and industrial engineering.

Dejan Sakeljšak – IT& Cloud Specialist responsible for Software and cloud development lead, background in IT engineering. Software engineer with more than 15 years of experience with Java technologies, Scala, Erlang, Node.js, C/C++. Broad experience in the financial sector, distributed systems and multimedia.

Marko Oblak – IoT Development, responsible for IoT development and hardware R&D, electrical engineer by profession.

Aleksander Ristov – IoT developer & Integrator, responsible for SW & Firmware development, mechanical engineer by profession

Dario Ekšič – iOT developer, responsible for IoT and Hardware R&D, electrical engineer by profession.

 

DECK: Here 

ROUND DETAILS: Raising 100.000 EUR, 900.000 pre-money valuation (11% equity share)

Runway: TBD

Information rights: Yes

Estimated fees: 7000 EUR for DD and management costs, legal costs are not included

Soft – committed in this round (EUR~ 0) – we will keep this updated

No previous funds raised for this project. 

 

Problem

  • Electrical machines can become malfunctioning without any prior signs stopping the production process or causing great costs with their malfunctioning
    • Ex: Malfunctioning refrigeration systems are 25-30% the reason for food, cosmetics and pharmaceutical spoilage that cost industries more than 40 billion USD per year.

Product

Solution that allows easy predictive maintenance for rotating equipment driven by AC electric motors and is less complex solution for implementation. Low costs of implementation and short time frame of implementation

  • scaling solution with some competitors (showing this is really industry niche, but super scalable), them focusing on big, corporate companies not SMEs
  • scaling is quick with added value as off the shell solution as next step
  • all hardware is assessable easy, not depending on Asian markets
  • own IP and know how

Hardware

  • A proprietary system that can be installed quickly and easily (calibrated in under 1 min)
  • all hardware is assessable easy, not depending on Asian markets
  • Currently the hardware is assembled from premade items, but in the future the company plans to develop their own components that will allow for greater cost efficiency

Software

  • The software gives real-time collision warnings to reduce the risk of costly failures on any machines
  • The system enables day and night use
  • The system is easy onboarded and only depending on source of electricity

 

Market

The global TAM of VEN 21 is estimated to be $ 67,8 Billion in the AC electric motors only and it is growing 7% per year. The global AC electric motors industry has not been negatively affected by COVID-19. 

Predictive maintenance market size is 4,3 Billion and is rapidly growing 28.8.% yearly with prediction to grow up to $ 31 Billion. 57 % market share belongs to devices with electric motors what represents $ 2,45 Billion market potential. In 80 % cases of predictive maintenance on electric motors Vibration analysis is used to predicted problems and potential causes. Ven 21 has better position with their product, especially focusing on mining industry, chemical plants, food factories, water treatment etc. This creates a more favourable environment for Ven 21 current and future products to make more penetration in the market.

Business Model

The following revenue streams as SaaS have been identified:

  • smaller systems up to 3 KW/motor: 25 EUR/month 
  • medium systems 5-15 KW motors: 50 EUR/month – larger systems: 100-250 EUR/month 
  • IoT Data – monthly subscription (turnaround times, near misses, layout optimization, risk analysis)

Revenues

  • First revenue is expected to generate in 2021
    • projected 200,000 EUR  for beta testing, 

IP

  • software developed within the team, own know-how, protected as business secret
  • hardware bought on market, just final assembly to adjust software as complete product is done within Ven21

Planned revenues

  • 2022 – 135,000.00 EUR
  • 2023 – 461,500.00 EUR
  • 2024 – 1,406,000.00 EUR

Unit Economics

Currently the price of 1 system is approximately 100 EUR; this goes for the machines used in the smaller and medium subscriptions. The ones used for the larger subscription cost approximately 20-30 EUR more. That is due to the fact that that system needs 3 additional sensors. In the future the costs will be reduced to approximately 70-80 EUR per system due to the increased efficiency of hardware items.

Key metrics (for prototype development and testing phase)

Milestones for 100k:

– 4 months after investment AI prototype.

– 6 months after the investment of 10-20 test users

– 9-12 months after investment solution MVP (AI + other)

Other recent traction

  • Concept tested and validated in lab and son some pilot projects
  • Ven21 is currently working on pilot projects on pumps, compressors, refrigeration systems, conveyor belts. They worked on cooling systems in coastal hotels (Istrabenz turizem, Bernardin – Sava turizem …) and a few restaurants. 
  • From the mentioned hotels we have LOI (letters of intent) that they think Ven21

solution is good and would use it when it is developed enough for independent use by them.

Pumps and compressor systems were only tested on heating and similar systems. Team is currently working on the level of fault detection on the simulation platform (adequacy of data for later development of the AI model).

Current Shareholders Structure

Currently the company is not yet formed, and it will be formed together with the Investment. Shares will be divided as major share, ESOP and investor’s share.

Vision

Ven21 wants to become the main solution for predictive maintenance of different electric motors and machines.

Competition

Ven 21 has direct competition in Semiotic Labs – now Samotic (https://www.samotics.com/) what shows huge market needs. They are oriented on bigger companies. Ven 21 is oriented on SME market. 

Main barriers identified – 2 reasons why you should not invest from the founder:

  • Development from TRL4 (Current development stage) will not develop according to rapid market shifts
  • Growth can show some risks at expanding on foreign markets 

Reasons why you should not invest from BAS:

  1. Do not invest what you can not afford to loosing it
  2. The long-term market effects of COVID-19 are uncertain

Exit Strategy

The whole concept of VEN21 is designed in a way, that will be ready for sale to one of the bigger companies, that offer solutions for predictive maintenance, digitalisation and industry 4.0.

The team is confident that with an Investment between 400 – 500k in the next 2 years, they will be able to accelerate their development up to a degree where they will already be interesting for exit in the next 3-5 years. Some companies that could be the potential buyers are Schneider Electric, Adash, ABB, Software AG, SAP, SKF etc.

In addition to them, Lab26, could also be interesting to midsize companies in the field of digitalisation and maybe startups, that would like to accelerate their growth into new markets with this new technology, that could act as their competitive advantage. Examples of these are Predictive-Sigma, Seebo, Sigma Industrial Precisio or Kolektor.  

Asks from Ven 21

  1. After successfully done pilots, team will expand on foreign markets- recommendations and help from foreign investors wanted
  2. Our interest is to enter new DACH markets and capture customers rapidly. Do you have any contacts or experience in the market entry, business development and the acquisition of subsequent investments with focus to help us to scale our product?

 

If you would like to assist – please feel free to reach out to Aleš Suban directly (info@lab26.eu)