Bankrupt with groundbreaking environmental technology, but employees refused to give up and invest in new “start-up”.
Original article published in Shifter.no on Tuesday, May 18th Shifter.no © copyrights with Shifter.no (Please note that our translation contains limited clarifications of the original text.)
Investors came in with half a billion Kroner (EUR 50 million), but Viking Heat Engines AS went bankrupt. The inventor and several former employees have bought up the bankruptcy estate and are back on track – with a new international top manager on board.
Viking Heat Engines started visionary in 2010, with Harald Nes Rislås’ idea of a machine that could convert surplus heat into electricity (ORC) on a small scale. At this time, such distributed power production was high on the environment agenda, both at governments and industries, but a viable business was far ahead of market developments.
Uncertain which way the market would go, the R&D team developed a solid technology platform with the objective to serve multiple markets. Unfortunately, the company chose to invest in a machine size and key markets that turned out to be wrong for customers. Nonetheless, many stakeholders realized the potential, but the fully developed product never became profitable, though some machines were sold.
Consequently, the technology platform was therefore further developed into an industrial heat pump. This time too, the results attracted lots of attention. The heat pumps broke most temperature and performance records, but the technology suffered from the same problem, that nothing was done with the size of the products. This resulted in a heat pump that was too small for industrial customers, and at too high a price.
What could have been an entrepreneurial adventure seemed to end its days in bankruptcy, after as much as half a billion kroner had been invested in the technology.
Up from the dead
Now it may seem that “all good things are three.” The project has in fact risen from the dead, after Rislå and parts of the previous management have bought up the bankruptcy estate together with angel investor Kjell Lunde. According to Fedrelandsvennen (a Norwegian regional newspaper), they paid seven million Kroner (EUR 700k) for what was left of the Kristiansand company.
The technology is still highly relevant and absolutely necessary for industry at large to be able to achieve the energy savings and CO2 reduction that will be required in the future, says former CTO and now co-founder Geir Robstad in the newly started company, which has been named “Heaten”.
There is still some way to go until Heaten returns to the same old heights in the team. Today there are four employees, compared to over 40 when Viking was at the top.
Are there any critical voices/doubts to start up again in this way?
“The big creditors at the time have welcomed us with open arms, and we have only received congratulations, even from the European Investment Bank. We have also entered into a new agreement with the former development partner,” says Robstad.
Now he hopes to bring back more of the valuable skills and experience from former co-workers. This technology is not something you learn in school, and much of the value lies in the people.
Heaten has successfully started to attract funding from strategic investors to deliver series production in 2025. Already by 2023, a limited pilot series will be on sale to key Venture Clients..
Given the former company’s history, is it difficult to raise capital?
“We are not very afraid of facing relevant questions, and the response from the market has been positive. This time we also know how not to do this. we know what went wrong last time. There was no lack of interest last time, but bad choices were made. Among other things, it was about focus, and knowing what the customers wanted. As a good southerner, he has the following metaphor: We did not reach the market. If people want melons, it does not help to have lots of good strawberries” (N.B.: Norwegian saying).
Technology with a big lead
According to Robstad, the technology is far ahead of competition. Heaten owns crucial Intellectual Properties (IP) to secure the company’s technology leadership in the future.
“An enormous amount of good work was done in Viking Heat Engines, but the management probably underestimated both the price and the time it takes to deliver a bold ambition. It is also risky to have to grow a company towards commercial operations at the same time as platform developments had been ongoing, something Viking unfortunately learned the hard way. The technology was and is in many ways ahead of its time”, says co-founder and inventor Harald Nes Rislå.
“We will follow a completely different strategy for growth and commercialization in the future, something we are absolutely certain will be of crucial importance”, Rislå concludes.
A necessity for the environment
Industrial high temperature heat pumps recover what is normally lost heat from industrial processes and return the energy efficiently at higher tempertures. Based on earlier developments Heaten’s heat pump is ready for upscaling.
“This technology has a huge market. It is not only profitable in itself, but it is also necessary for the de-carbonisation of energy-intensive industrial processes in segments such as food production, drying, brewery, paper production, carbon capture and plastic production”, says Geir Robstad, COO of the new company.
“The heat pump technology will, for example, in a drying process for bricks be able to reduce CO2 emissions by 79 percent and energy consumption by 84 percent compared to the use of gas burners”, he continues.
Adding an experienced industry leader to the team
Heaten has also appointed P. Peter Breithaupt as incoming CEO. Breithaupt joins Heaten from Shell New Energies, where he was responsible for power-to-heat business developments and acting as senior technology lead for Venture Capital investments in in renewable energy technologies,, energy storage, data science and IoT.
“Heaten’s technology is already fully developed, which makes this the most special start-up company I have seen (in my career). The company is a unique opportunity for me to use my experience and work with a very experienced team. Our joint ambitions is to serve our industrial customers’ need to transition from fosil fuels to renewable energies”, says Breithaupt.
Friend of Norway
Although Breithaupt will not take up the role of CEO until June 2021, he has nevertheless taken a large part in the company since last summer. He has spent much of his free time participating in the development of market analysis, business strategy and building networks with future customers and investors.
“I look forward to getting started with the work in Heaten. In addition, it will also be nice to come back to Norway. Norway is a “power house” for engineers with well-educated and experienced people. All ingredients are present for the growth of high-tech companies”, says Breithaupt, who took a master’s degree in thermodynamics at NTNU through a scholarship from RWTH Aachen, one of Germany’s leading engineering universities. He later received a doctorate.
Breithaupt and his family have also traveled a lot to Norway. “This is where my sons learned to ski”, says Breithaupt
He has also been part of Shell Ventures’ due diligence team, where he has examined very high heat temperature technologies in general. He became acquainted with Heaten’s technology and Harald Nes Rislå in 2019, and quickly saw that the technology had investment potential.