Kitty Liao has invented a cooling system to preserve vaccines in transit to remote parts of the world. Her venture needs more finance, but how to attract it when maximising returns is secondary to her goal of saving millions of lives? She consults our experienced panel of IoD members
It’s estimated that preventable diseases will kill about 2.5 million people this year, half of whom will be aged under six, according to the World Health Organization. If this doesn’t give you pause for thought, then consider that 85 per cent of potentially life- saving vaccines are rendered useless in the last mile of their journey.
In order to work, vaccines must be kept at a temperature range of between 2ºC and 8ºC until use, but they are often exposed to heat when they’re being transported inside basic cool boxes to remote parts of the developing world and during the immunisation process.
Given the cost of making and exporting these products, this represents a billion-dollar problem, but Kitty Liao has come up with a solution. The founder and CEO of Ideabatic has invented a “smart last-mile vaccine cooling system” called Smile. One of its design innovations is a self-closing lid – a simple yet crucial measure to protect the precious cargo from heat damage.
Liao, an expert in low-temperature R&D, learnt of the problem at a “humanitarian hackathon” in Geneva, where participants tackled health, communication and transport challenges. “I thought: ‘There must be a way to solve this,’ so I decided to focus on it full time,” she recalls.
Liao’s venture has since secured more than £300,000 in grants and won several innovation awards. This has enabled her to continue developing Smile and file for a number of patents. Understanding that grant funding may not be sustainable, she set up Ideabatic as a profit-seeking social enterprise with the primary goal of saving millions of lives, rather than a traditional business or not-for-profit entity.
“Ideabatic needs to make money to sustain its R&D activities,” she says, noting that this first entails finding outside investment. To this end, she secured a place at the Imperial College Advanced Hackspace, which provides facilities to help inventors commercialise their ideas. “I’ve had to shift from being technically minded, where I simply think about solving the problem, to becoming more business-minded,” Liao says.
Because Smile is a “hardware device, investors have expected to see patents. Some of my patent applications have yet to be processed, but they still require a renewal fee,” she says. “I’d like to know what I can do to attract investors when the primary goal is to get Smile out there and make an impact for those in need,” as opposed to maximising the return on investment. Over to our expert panellists.
KITTY Liao graduated from Fu Jen University in her native Taiwan with an electronic engineering degree in 2008. After gaining an MSc in physics at Imperial College London, she moved to Switzerland for three years to work on the Large Hadron Collider. Following a stint as an Ivy League research fellow at Brown University, Liao returned to the UK and started Ideabatic in 2016 with the chief aim of “saving millions of lives” with her vaccine cooling system. Last year she secured an enterprise fellowship at the Royal Academy of Engineering, where her mentor is Richard Goodwin, MD of British engineering group Goodwin plc.
She is a member of IoD 99. For information about this network for new entrepreneurs, visit iod.com/99
Founder, Outside Partner
Approach your pitches in exactly the same way as you would with a purely commercial venture. Any investment committee will want to see a robust business plan based on high-quality data and sensible assumptions. Quantify the problem that Smile will solve and identify which parties bear most of the cost whenever vaccines are rendered useless. These entities will show the most interest. A range of public-private partnerships and global foundations are engaged in vaccine-related work. If you can show them a compelling solution to this problem, you will obtain the support you need.
Janine-Nicole Desai is a member of IoD London
It may seem counterintuitive, but I think that investors in social enterprises have much the same needs as investors elsewhere. Their ROI criteria may be more relaxed, but their assessment of your venture will be just as exacting. Get good at pitching, get used to not taking rejection personally and plan for the process to take you far longer than you think it will.
Paul Chowdhry is a member of IoD Scotland
John Courtney CEO, BoardroomAdvisors.co.uk
The social investment tax relief supports social enterprises seeking external finance by offering individual investors a range of concessions. Investors will take a close interest in how your venture is performing, so you should focus on maximising its profits. And, if you need patents to protect future profits, you should continue that process. While it may be a challenge to find investment, at least grants are also available – any start-up should consider UnLtd or incubators such as Social Innovation Camp as a resource.
John Courtney is a member of IoD Bristol
Independent board director
To be investible, any enterprise needs a sustainable business model, impact, scalability and good returns – be they in financial, reputational or CSR terms. Your story is powerful and also relevant to many suppliers that are trying to get their products across “the last mile”. Given this, you should secure the patents you need; share your story widely, both online and offline; and gain advocacy from civil society, commercial partners and experts in healthcare and logistics. Use digital channels to facilitate open innovation, crowdfunding etc. And, lastly, demonstrate Smile’s potential to prospective investors through the use of a strong test market.
Dowshan Humzah is a fellow of the IoD
Investment director, Big Issue Invest
Social enterprise investors can seem different from mainstream investors, but their basic concerns will be the same. For instance, I’d want to know whether Smile really can solve this big problem in the vaccine supply chain. Will it work in hospitals without reliable electricity? Can untrained and/or illiterate people use it? What is your launch strategy and what kinds of partners do you need? Are any other ventures developing similar products?
The real difference comes with the relationship after the investment. For example, a social investor might encourage you to use early profits to subsidise Smile’s roll-out to lower-income customers instead of paying dividends straight away. It might also ask you to measure Smile’s impact on communities, enabling it to use this data on top of the financials to decide whether the investment has been a success.
The great news for Ideabatic is that the social investment market is growing quickly. It will be worth spending the time to find the investor that really understands your goals and will help you to succeed.