University of Waterloo-startup roots on to solve global sustainability challenges starting locally

The region’s tech startup roots have deepened further now that two companies, Halion and H2nanO, have launched out of Velocity and into their own lab spaces. Joining the Velocity alumni community of 150 companies, Halion and H2nanO will continue to grow their sustainable solutions and, ultimately, further commercialization of their deep tech products while remaining in the local area.

H2nanO’s inception can be traced back 10 years to the University of Waterloo campus, when the co-founders Zac Young, Tim Leshuk, Stuart Linley and former Waterloo professor Frank Gu, met and developed a unique approach to treating wastewater using photocatalysis, the process of using light to drive chemical reactions.

Its processes treat wastewater from large resource industry operations, treating dissolved contaminants to improve water quality and to reduce greenhouse gas emissions and odours by more than 90 per cent.

H2nanO is now piloting the largest-ever in-field solar photocatalysis system, working towards a treatment solution for the 1.4 billion cubic meters of water stored in Canada’s oil sands.

Young is H2nanO’s chief operating officer and says that these milestone transitions for the company meant the need for a bigger, specialized space. The team built its own lab in Kitchener, as well as an operations facility in Alberta, where its major projects are located.

Young says that while building a lab is time and resource heavy it’s an exciting opportunity for the company.

“There comes a point when the flexibility and sandbox time Velocity provides runs its course,” he says. “It’s time to be in a space tailored for the company, to fit our unique needs.”

Halion’s path to exit Velocity materialized by design and luck.

Halion is developing smart glass technology that can transform glass from a dark to light state at the push of a button. This would, for example, improve fuel efficiency or electrical vehicle range by more than 6 per cent.

Co-founder and CEO Ryan Marchewka says that in order for the company to support its product development, it needs to hire more staff and space is needed for that to happen.

However, finding lab space in the area is incredibly difficult, he says.

“It was serendipitous that we found a lab — the timing was magical and shows the importance of reaching out to connections” Marchewka says. “During our time at Velocity, we’ve been able to hit certain milestones that can back our claims, we see the market demand, have letters of intent and companies wanting to buy our product.”

Marchewka started working with Matt Lavrisa, co-founder and chief technology officer, on Lavrisa’s fourth year engineering project at Waterloo. The company has evolved and over the course of its seven years at Velocity it has focused on creating different products for different markets.

The smart glass product is just one piece of its grand vision — a future where every surface is a display, customized to people’s needs, displaying information and different colours or patterns, Marchewka says.

“[The smart glass] is a steppingstone product for us, we can get it relatively easily to market and build revenue while we work on more complex things,” Marchewka says. “At Velocity we had time to prove that the technology works at a basic level, turned that into proof of concept to sell to stakeholders.”

Velocity accelerates deep tech commercialization
Deep tech is commonly defined as technology requiring a novel scientific or engineering approach that is transformational, disruptive and world changing.

Young says due to the complexities of commercializing deep tech, working out of Velocity helped in a big way.

“There are key milestones in startup development that Velocity helped us get to as effectively as possible, like working to develop products based on demands from customers,” Young says. “Velocity having a specific focus on deep tech is unlike other incubators, and because of that there are many deep tech companies there, which has created a community of startup founders and a cluster of companies that are in the same field — so that we can learn from the successes and failures of our peers.”

Marchewka says that working in deep tech requires a different mindset compared to other tech spaces. It’s a different venture capital scene requiring a unique business plan sometimes involving up-front investments in production, supply and distribution chains with sales cycles as long as three years.

“Growth could mean jumping from zero dollars in revenue for five years to $15 million the next — it’s a step-function rather than compounded growth,” Marchewka says. “It’s one of VC’s key questions for Halion: ‘When you hire the next chemist/scientist, how do you (motivate them) to stay with you for seven years, how do you build it into your culture?’ The dynamics are different.”

And now hiring more staff is one of Halion’s priorities, looking to grow from 10 employees to 15 by the end of the year.

“We are excited to grow the team and get more done,” Marchewka says. “We are not in this for the money, success will come when what Halion has built is in consumers’ hands. Something out of the lab that is brought to life — and now we are one step closer to that happening.”