Renewable energy startup Wave Swell Energy is on track to close a $9 million funding round, which includes $1.5 million from an equity crowdfunding campaign.
The startup uses technology to glean energy from the ocean, converting it into power on land.
Founder Tom Denniss tells StartupSmart the startup has already been pledged about $7.5 million in equity investment and is looking to raise the final 20% of the target capital through equity crowdfunding platform Equitise.
“We thought there were good synergies between the type of investors that would normally go through crowdfunding and our type of renewable energy company,” he says.
Raising capital for a new technology is always difficult, Denniss says, especially when you don’t have a big public profile.
“Crowdfunding is a great alternative,” he says.
“It broadens your potential clientele, and opens it up to many small-scale investors rather than a few large ones,” he adds.
The startup was founded in 2016, but Denniss and his team have been working on the technology for almost three decades. Denniss actually proposed an early version back in 1990.
The business, however, was launched to commercialise the product, and the team are working towards the first commercial demonstration project on King Island in the Bass Strait.
The total $9 million raised will be “100% directed at this project”, he says.
“After that, we expect to be fully-fledged commercial and doing profitable projects.”
The product is beyond the research level, however, the past two years have been about securing IP and completing final testing. The most recent iteration of the product was verified at the Launceston-based Australian Maritime College, which is part of the University of Tasmania.
Denniss describes the tech as “a big static chunk of concrete below the water”. It has no moving parts aside from an air turbine eight metres above the water level, he says.
Having nothing moving below the water level means there is not a whole lot that can go wrong, which keeps operational and maintenance costs low. More importantly, perhaps, it means there’s little to no risk to marine life.
“It doesn’t disrupt any more than having a rock there,” Denniss says.
We’re not going back
Denniss sees wave energy as being a big part of the renewable energies drive, and suggests it could already provide a cost-effective source of power for island nations.
For energy on the mainland, “it will take five or 10 years to drive the cost down below other sources”, he says.
Wave energy is also more predictable and more consistent than other natural energy sources such as solar or wind energy.
“You can be much more confident about the consistency over a long period of time, and it can be predicted five to 10 days ahead,” he said.
“That enables us to produce much more reliable power that has a higher value.”
In the energy space, “it’s a very good time to start a startup”, Denniss says, just as long as you have a technology that has the potential to be cost-effective.
Interest in alternative energy sources is only going to increase, he says.
While some may believe renewable energy could lead to higher energy prices, “that’s really not the case”, Denniss says.
“There’s no turning back, we’re not going back to a fossil fuel society, although some politicians don’t believe that,” he adds.