Enrique Serrano: Deep Tech- the Combination of Organic Active Materials and Machines

On this episode of The Founder's Sandbox, Brenda McCabe speaks with Enrique Serrano, founder of B5Tec, about how his company combines organic chemistry coupled with manufacturing at scale.

You can find out more about B5Tec and Enrique at

https://b5tec.com/

https://ec.europa.eu/commission/presscorner/detail/en/speech_23_232

https://www.linkedin.com/in/enriqueserranodorado/

https://b5tec.com/b5tec-at-final-phase-of-bloomberg-bnef-pioneers/

 

Transcript:

00:03
We're standing, we're standing on the edge of something big. We're gonna make some changes. Good morning. Welcome back to the Founder's Sandbox. I'm Brenda McCabe and I own and operate a consulting firm, Next Act Advisors, where I have a simple mission.

00:30
I want to assist entrepreneurs and entrepreneurs in building scalable, well-governed and resilient businesses. The Founders Sandbox podcast of which you're listening to today is an additional channel to feature founders, business owners, corporate directors, and professional service providers who like me want to use the power of the private enterprise, small, medium, and large to create change for a better world.

01:00
Through storytelling with a guest on topics, including resilience, purpose-driven enterprises, and sustainable growth, my goal is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. Today, I'm absolutely thrilled. My guest is Enrique Serrano. Enrique and I go back.

01:28
Over a decade when I lived in Spain and worked in Spain and Enrique and I were both in the renewable energy space. He's still around with a new company and today we're going to talk about B5 Tech and specifically Deep Tech, the combination of organic active materials and machines.

01:52
Thank you, Enrique, for joining me in the Founder's Sandbox today. Thank you. Thank you. A long time. A long time. I know. I know. Although we see each other on these screens too much. But anyway, you know, we're almost at the first anniversary of a very sad event, the incursion of Ukraine by Russia, provoking not only a humanitarian and geopolitical crisis, but also an energy crisis in Europe.

02:22
Just last week at the World Economic Forum, the president of the European Commission, Van der Leyen announced to the attendees, we have a plan, a Green Deal Industrial Plan. Our plan to make Europe the home of clean tech and industrial innovation on the road to net zero. Our Green Deal Industrial Plan will be covering four key pillars, the regulatory, the environmental, financing skills,

02:53
and trade. And she concluded with the story of the clean tech economy is still being written. Enrique is going to be talking about how he's writing his novel, and with the business and the clean tech economy. You know, over the years, she continued, she's been coming to Davos, and she's heard many times that we are on the cusp of a period of creative

03:22
spoke of his idea that innovation and tech replaces the old, leaving the old industry and jobs behind. In many ways, this dynamic applies to the clean tech revolution of tomorrow. But I believe she says, if Europe gets it right, the story of the clean tech economy can be one of creative construction with the right support and incentives for companies to innovate with the right focus on skills and people.

03:51
with the right environments to make the most of our world-leading innovation capacity. Europe already has everything it takes, talent, researchers, industrial capacity, and Europe has a plan for the future. And she finalizes. And this is why I believe the story of the clean tech economy will be written in Europe. So I'm absolutely delighted, Enrique, that you are part of the clean tech economy in

04:21
And as an introduction for my listeners, you know, I've known you for over a decade. And we were both working. I was in the concentrated solar power. You were in PV at that time in Spain. And, you know, 10 over a decade is a long time, but it's not a long time in deep tech, is it? The road to commercialization in deep tech companies.

04:50
is long and arduous. Yes, yes. I leave one second to introduce one idea. One of my favorite song of ACDC is a long way to top if you wanna rock and roll. That's right, ACDC. You heard it here on the founders' band. It's a long way to the top if you wanna rock and roll. So if you are working with this tech,

05:18
know, is a long way. I love it. So before we get into the B5 Tech, the company that you founded and our CEO, you developed, this has been started the company in 2017, you developed being a disruptive technology, as opposed to technologies, right? Disruptive technology to create energy storage

05:49
Can you walk me through, you know, you're bringing, you're combining organic chemistry with manufacturing at scale. And that's what the podcast is going to be about today. So how you've merged the two worlds and you're scaling, you're actually going to be manufacturing in the next couple of weeks with a full manufacturing plant. So where did it all begin?

06:15
Yes, well, is this when you talk about these two different technology, people say, okay, this is and they are two really, really, really different technology. But it depends. 10 years ago, I personally worked with a really famous national lab in the US, the PNNL, and we know that a really, really, really brilliant around the center as

06:44
PNNL, also in Europe, mainly in Germany, people is working with organic active materials that has the same performance that metals in batteries. And this is really, really, really great. Why? Because it's the same, the pharma industry, they are using the same. They develop molecules that has the performance that you need.

07:15
we live in the, I think in the metal age. I know. Batteries, we know the lithium battery, we know the lead battery, we know the cobalt battery. But so what's happened? What's happened? And at the same time, different also around the public and private center, they are working with microfluidics.

07:45
100% of the market is medical technology, lab-on-a-chip technology. But you can use this technology to provide an energy storage solution. Why? Because a fuel cell is a flow battery. It's a fuel cell, sorry. So you can use microfluidics to develop these kind of devices. So we start to work with these two different technologies and mix.

08:13
You know, that's the way you described that really coincides with one of the points I or one of the characteristics that I described in a blog post on deep tech. I said there's five characteristics and one of deep tech is actually combining from multiple domains, right, to create a product or service. So you're saying that

08:40
the use of you've identified from the pharmaceutical and research for many, many years ago, the use of natural organic chemicals or chemistry, pardon me, can be applied in the energy sector. And it has not what we've been doing is mining for lithium and zinc and copper and destroying our and the second. And the second aspect you for saying you've you've

09:10
of not copied, but you've brought in from the also the pharmaceutical lab on a chip, right? Microfluidics. So you're bringing in two different domains from different industries to the energy sector. Wow. Yes, that was the idea. And this was, you know, in 2018. And maybe people say that we are a little bit crazy. Because

09:39
because there were obviously there were other times, the situation around the world, the geopolitical crisis, the rising of China was really, really, really different. But I think everybody knows the problem that we had 10 years ago and five years ago and today. And now, obviously our situation changed a lot because people believe

10:07
It's funny because you know after the 70s crisis, you know the oil crisis, a lot of new technology were developing. Cracking technology, lithium-ion technology, fuel cell, a lot of energy technology that we are using now were developing after this crisis. And now it's very sad, but I don't know, maybe the human civilization only works.

10:37
after a crisis. But now we are into a new crisis and people understand that we need to change a lot of things. Well, let's move into you've combined two domains. There's a geopolitical energy crisis that has accelerated but you've been at this since 2017 and actually before. Why have you chosen storage? All right, you can have productive assets.

11:06
But why are energy storage devices needed today and what is B5 Tech about? Thank you. Yeah, the founders, myself, we came from the, well, I personally work in the energy sector, all of my professional career. I started to work for an oil and gas company. A lot of different point of view, financial, operational, a lot of things.

11:35
after the big tsunami of PV plus wind, it's clear that the next wave is storage. Okay. Explain for my listeners who are not engineers, what is storage? Solar PV and wind is an amazing energy, it's the most cheapest energy in the world, but

12:05
is energy is not dispatchable. You can use when you want. Got it. If you have solar PV panels at night, doesn't work. If you have a wind farm, maybe now works or maybe not. So you need to storage and to manage. It's quite important. It's not only storage these energies, the right word is dispatch. Yes.

12:35
world that everybody in the industry use. Right. So, and people start to invest and have a look with all this technology that came from, for example, the 70s is the rise of a flow batteries. For example, I, as I said before, we had an agreement with the PNNL to develop a Vanadium flow batteries. Vanadium flow batteries was discovered in Australia, but where the best technology was

13:05
performance in the US. And now what's happening? Now, China are installing gigabit of these kind of batteries. The gigabit factories of Vanadium, right? Yes, yes, they have a plan. A really big plan to install a lot of capacity of these batteries. We are talking about gigabits, gigabits and gigabits and gigabits.

13:35
So in the Western economies, I usually say, let me to introduce another joke. I usually say, for example, project finance is a weapon of massive destruction for young industry in the Western economies. Say that again. So it's quite difficult to scale up an industrial business. All right.

14:05
really, really hard, really, really hard in the Western economies to rise an industrial business because people only have looking for to decrease the risk from the lawyer and financial point of view. Got it, got it. So it's more short-term, right? They don't have the longevity of the Chinese five-year industrial plan or? Yes.

14:33
So energy storage is the area that will be the next, I guess, wave of innovation, right? There are things out there, but there's scarcity of rare earth metals like lithium. Like lithium. I hope also, and I believe, but I hope there will be a new wave of innovation, but we need a step.

15:02
As I said before, we are using technology that came from a long time ago. We made in the last two years a proof of concept for the European Space Agency. This is to install using microfluidics to install a micro-fuel cell for small satellites. This looks so cool.

15:31
The head of the technology, the fuel cell, was used for the Apollo mission. So maybe we need more. We need more and more and more. Because, okay, it's good. We are using, we have enhanced technology that came from the system, but in my personal opinion, we need more, more and more. So let's go to,

16:01
concept that is technology readiness levels. I think for my listeners, it might be helpful because they don't all come from the deep tech industries that I cover. You're using some concepts and technologies that have been, let's say an R&D for the last 10, maybe 20 years, right? They're now coming out in the limelight because

16:31
geopolitical and energy crisis. And there's a race, right? Between countries to develop different solutions. How do countries, how do companies and how do private equity and VC look at technologies with respect to the technology readiness levels? And then the second question, Enrique, is where would you place the three products that you have currently?

17:01
at B5 Tech. Yeah, I think obviously the concept of TRL is quite important to understand. Yes. All of the industries has their knowledge, their skill, their metrics. And when you are talking, right, that came from IT, everyone knows that Minimal MVP, Minimal Bible Producer. Okay, in technology is really well known.

17:31
This is scale from zero to nine. This is the TRL, technology readiness level. Zero, an idea. Nine, you know everything. Your car, a oil car is a TRL nine. Nobody has any problem using this technology. Your laptop, TRL nine. So from zero to nine, we have different levels.

17:57
This concept was developed by NASA and all of the industry, all of the academia are using this. And I think it's critical to understand mainly when we are talking about industrial technology, finally energy storage solution or also medical is an industrial economy. The scale up is different.

18:25
It's different. It's impossible to move from an MVP to have 500 millions of clients. It's impossible. It's impossible when you are working in the industrial economy. So it's quite important to understand the DRL, the difference level of the DRL from zero to nine. It's the same. I really like it. It's like a school of thought as a philosophy.

18:55
the works that was made in the University of Cambridge. They say, we have three different ledgers. The first layer is technology. The second one is the product. And finally, above all is the market. To do innovation, we have technology push or market pull. In the seventies, the eighties, nineties, only works techno...

19:24
technology push. You know, Motorola, the R&D department, they decide the new device that you will use. And now the situation changed. We work only with a market pool. The guys that are below of all, they don't say nothing. And in my opinion, it's quite important to have a mix. We need the

19:53
market pool, but we also need the technology push, both. So it's quite important for, you know, PCs, for also for politicians, for the government to understand a simple, a really simple, simple concept. The TRLs, the technology push, but for example, in lab on a cheap technology, the problem that we have is clear that the problem is a market pool.

20:21
technology is ready. The technology can do amazing, amazing things. So you started the company in 2017 B5 Tech. You're located outside of Madrid, Spain. You will be soon installing a manufacturing line to scale to 500,000 cells that will enable you to get to TRL level seven, eight? Yes.

20:51
Right. Yes. You're also raising money and our B5 Tech is a finalist for the Bloomberg New Energy Pioneers Award. Yes. You know, what is the customer demand currently for B5 Tech for either the fuel cells, the hype, the supercapacitator or the battery?

21:19
Yes, your flagship. The hybrid supercapacitor. Got it. Fairly. It's because the DRL is high, the demand is great. Also, the Western economy and also around the world. We are electrification everything. We need supercapacitor and hybrid supercapacitor. OK. And people invest a lot in the standard batteries. OK. You know, the lithium ion batteries.

21:48
Other technologies are at the second level and we need a lot. There are successful companies around the world. For example, Maxwell, Eton in the US, Skeleton in Europe, and they are growing a lot. They are growing a lot. Why? Because the demand is massive. It's massive. Yeah. Massive. So for us it's great.

22:18
And finally, we are a company. We try to do great things, but finally we are a company. We need money. We need revenues. We need the VITA. We need, you know, all the financial metrics have to be the right. So the first goal is to develop the hybrid supercapacitor. Yep. Our second step is the fuel cell.

22:48
Why? Because again, the demand is growing a lot. And we started, it's funny because we started with the organic flow battery. Yes. But now to be honest, is in the third level, the last level of priority. Why? Because to install a battery in your home for residential, a customer, or whoever, it's quite difficult.

23:16
The electrical markets are in a crazy situation. In Spain is different, in England is different. Well, maybe in Europe it's quite similar, but in the U.S. are different. And we are moving from the oldest electrical markets that all of the industry use turbines, the frequency regulation came from these strange.

23:44
topics that use the electrical engineers and to have a right market. So this product is quite difficult. Okay. It's quite difficult at this moment. So finally we are a startup and we have to be focused. Yes. So our first goal is the hybrid supercapacitor. Excellent. Now people say a hybrid supercapacitor are super batteries. Okay. Good. Is that cool?

24:13
It's a cool word for this product, but this is the situation now for us. And for this reason, we are raising money. Why? For example, for the next step of the fuel cell, we need a new facilities. This you need a facility to use, you know, hydrogen gases, a different devices and also to grow, to start up the factory.

24:43
the to say, okay, we start with a manufacturing facility is a major endeavor. I love it. It's out. It's it's scaling. Right? I had when we when we think, okay, we will start a factory, we say, okay, please come on. Oh, my God. What's your overall investment in the factory?

25:12
What is the overall investment in the factory? Of millions. So for a company like us is huge. Right. Is a good opportunity to build and this is the final you take the decision to do that, but is a big change for us. So take me to where the customer demand is by vertical, by use case. The customer, for example, we have a lot

25:41
that came from the electrical industry, the renewables, it's so easy for us because we have a lot of network in these areas. But the most, the market that are more expensive, more successful for this kind of application are others. For example, electrical mobility, for example, drones, for example.

26:07
micro robots for logistic warehouses. Okay. And it's great. Or again, security and defense or a lot of different things. And it's great. So our, our intention, our goal, our challenge is to try to have a pilot project. Everything everywhere. Why? Because it's so easy. For example,

26:36
to sell a project for a wind farm, one wind turbine, only one is 18 megawatts. Wow. A lot of sales, 18 megawatts. This is for offshore wind plant. Yeah. For offshore farm, only one wind turbine, 18 megawatts. Amazing. 18 megawatts means hundreds of drones. Hundreds.

27:06
For maintenance, right. Yes. But the impact is higher for the drone industry, for the electromobility industry, also the price, also the revenues, everything. So the idea is to try to find also not only the customer, not only the markets, also the regions.

27:34
have projects in the US, have projects in Europe, have projects in different locations for different applications. This is a great segue to the next part of the podcast, Enrique. How can my listeners find out more information about you and B5Tech? This will be in the show notes. Oh, I think we are a really open company. So...

28:03
Using LinkedIn, using our page. Our web page is really, really poor. We are trying to open a new web page in the coming weeks. I think we'll be ready. But keeping contact works. We have a lot of contact with universities, suppliers, research centers.

28:32
entities in Europe, in Spain, in the US. One of the colleagues that managed the fuel cell business for us, they were in America six months. They traveled, I think in May, and they spent the next six months there, working with other guys in a university and with other companies to develop

29:02
technology together. So we are a really, really, really open company. It's so easy. Excellent. So that's a great, I want to talk about the company and the culture. And I want to wrap it around the three themes that I work on with the founders, company owners that come to NextAct Advisors. I like to build and work with them on resilience, right?

29:32
Because owning and operating an early stage company and scaling it, we've all listened to Enrique right now, it takes resilience. And I like to understand what you've done for resilience.