Focus, jointly with the Delegation of the European Union, presents the stories of three Ukrainian entrepreneurs, who, thanks to the low-interest loans provided by the European partners, realized their dreams.
Are 20 years a lot or little? Everything is relative. On the scale of the Universe, this is no term at all. For human life, it is a solid time period, during which generation has time to change. For a technological civilization, it is an incredibly long period that changes the established rules and habits of people. 20 years ago, a personal computer was an expensive toy. Today, it is difficult to imagine a world without smartphones and the Internet. For today’s civilization, technology has become the same indicator of well-being and progress as industrial production was 100 years ago. That is why developed countries invest huge money in technology support. Moreover, thanks to the support of the European Union, Ukrainian entrepreneurs can also take part in the global technology race.
Focus presents the stories of three Ukrainian companies that received grant support from the European Union’s Horizon 2020 Programme and, through grants, created technologies that can be considered a “calling card” of our country.
In 2015, Svitlana Malovanna, an entrepreneur was the owner of a law firm. A Ukrainian company developing a technological solution in the banking sector was one of her clients. Malovanna’s lawyers developed agreements and helped with the registration of the trademark for it. Besides the lawyers, technical specialists directly implementing the project also worked on the project. When the project came to an end, the two groups decided to meet and celebrate the successful work. “During the meeting, I let slip that I didn’t like to work with a computer mouse. As for me, it is very inconvenient, especially if you need to operate with large amounts of information,” says the entrepreneur. She described to her colleagues colourfully, how convenient it would be to work with information in three-dimensional space, when with a single movement of your hand you can scale a graph or diagram.
In early 2016, when this conversation took place, the topic of virtual reality was just on the wave of popularity. The technical team of the project liked the Malovanna’s idea. That is how the Raccoon startup was born. Initially, the company set itself the task, which was to develop a technology that allowed actively interacting with the digital reality with the help of special controllers. Then the team saw the use of this technology in completely different niches: game industry, virtual and augmented reality, telemedicine, rehabilitation, combat engineering, underwater work, etc. They decided to start with the application in the entertainment industry, since this market was the least demanding on product developers and fast-growing.
Now Raccoon is not only a controller for people with impaired coordination of movements, but also software to it.
However, it turned out that at the same time Samsung presented a controller for virtual reality headsets. Therefore, the community’s attention turned out to be paid to the technology giant. But the startup team did not despair. “We began to analyze pre-orders, correspond with everyone who became interested in our products,” recalls Malovanna. A curious fact was discovered: most clients had problems with hand mobility. They chose a controller due to its special form of attachment, since they could not use a normal mouse and keyboard.
The team first thought not so much about the work in the game industry, but about the medical area. According to the entrepreneur, one of the exhibitions where the startup came to show the invention helped them finally move from the game industry to rehabilitation. A boy with a slight form of cerebral palsy approached the stand. Putting on a controller by Raccoon, he was able to play the game for the first time. “This was the final point for us. In January 2018, we consulted with the team, investors and decided to change our vector,” recalls Malovanna.
In the spring of 2018, Racсoon introduced the first device for people with impaired coordination of movements – a revised controller prototype and software for connecting it to games. The team began to show it to physiotherapists and actively cooperate with them. They say at the company that during 2018, they were engaged in finalizing the functional, because the difference between the game industry and rehabilitation is enormous.
Today, Raccoon is not only a controller, but also software to it. The team spent most of the time on creating the software. A physiotherapist enters parameters of a person, his/her diagnosis into the program and receives a plan of exercises that need to be conducted. Exercises are performed in a game form, i.e. commands from a computer game are programmed into movements for training. Thus, the patient restores motility, using in the game only the movements that the physiotherapist prescribed for him/her.
Currently, the company is actively developing a new market. The release of the product is scheduled for the summer of 2019, and the company already has a number of pre-orders from rehabilitation centers in Germany and Ukraine, which are now actively testing the solution. Racсoon will work with them based on the model of subscription to services. “We give controllers to the rehabilitation center and register a monthly subscription to a certain number of accounts. A rehabilitologist can at any time remotely track how a patient is being trained. A monthly subscription to one account costs EUR 50 to 200, depending on the functionality,” says the entrepreneur. The above figures are the price for German hospitals. The cost of the service is lower for Ukraine.
A grant from Horizon 2020 has become part of the realization of Raccoon’s desire to change the world, in particular to improve life quality of millions of people after neurological diseases and injuries.
The investments necessary for the implementation of a large-scale project are not an easy task. Contribution to the financing of Racсoon was made by Horizon 2020, program of the European Union aimed at financing research and innovation. “I heard about this program from my friends. The team and I carefully approached the issue of filling out the application, as a result, the company received EUR 50 thousand of grant aid,” says Malovanna. However, the main value of support was not in finance. Getting a grant from the EU is an achievement that is valued in Europe and helps open the right doors. If the project has been checked by experts and they have believed in it, it provides significant credibility from potential partners, investors, clients and mass media. For example, European funding has become an additional advantage of a startup in selecting Startupbootcamp Digital Health Berlin, one of the largest medical accelerators, and helped establish contacts with German rehabilitation centers and insurance companies as well as attract bridge investment from a private investor in the amount of EUR 50 thousand.
In the summer of this year, the company will enter the market with a simplified product, and in 2020, unique features of automatic FX rate generation and duration forecast will be added. To achieve this goal, Raccoon is additionally looking for EUR 600 thousand to be spent on research, testing in rehabilitation centers and CE Class 2a European certification. However, Raccoon has already calculated that it will be able to return investments by 2023, even in the worst-case scenarios. Perhaps, this will happen in 2021. In short, access to EU grant programs helped a promising startup to start working in the European market and simplify the process of finding customers and partners. A grant from Horizon 2020 has become part of the realization of Raccoon’s desire to change the world, in particular to improve life quality of millions of people after neurological diseases and injuries.
Dmytro Kovalchuk, a Ukrainian entrepreneur, started his own business in the late 90s. Prior to that, he worked at the E.O. Paton Electric Welding Institute, where he was engaged in the electron beam technology. Many people still remember the old massive TV sets and CRT monitors. The principle of their work is that in the back of tube has a source of negatively charged particles, namely electrons. Under the influence of a magnetic field, electrons deviate from the original trajectory and fall into a certain place on the front side of the kinescope, where their energy causes the luminescence of the luminophore. A similar principle is used in electron beam guns. But in this case, the electron beam carries much greater energy, which can melt the metal. Moreover, the direction and power of this electron beam can be easily and flexibly controlled. Due to this combination of properties, electron-beam technologies are widely used for refining, smelting, welding and other types of processing of refractory and high-active metals used in the aerospace industry, energy, defense industry and other industries.
In 1997, Kovalchuk and his partners founded Chervona Khhvylia, a company he is still in charge of. Initially, the company was engaged in trade in metal products made of titanium alloys, then, together with the E.O. Paton Electric Welding Institute it was the first in the world to organize the production of titanium ingots completely from secondary raw materials, in particular scrap, using the technology of electron-beam re-melting. In 2005, Kovalchuk started the work on the creation of industrial equipment for the implementation of electron-beam re-melting technology, primarily for the production of ingots from titanium scrap and spongy titanium (the main raw materials for the manufacture of metallic titanium, which is obtained from the mineral ilmenite). By 2015, the company became a prominent supplier of equipment and technology for titanium smelting for the markets of Ukraine, Europe, the USA, Russia and China.
Business turnover varied from year to year. According to the entrepreneur, the amounts ranged from USD 200 thousand to USD 500 thousand, depending on the number of orders. Most of the money earned, Chervona Khvylia reinvested in development. Back in 2009, the company had its own design office. In 2014, Kovalchuk learned about a great interest of the global industry in 3D printing technologies with metals. According to experts’ forecasts, the volume of 3D printing on metal will grow by about 20-25% per year over the next 20 years. His team is actively engaged in this new activity.
Around the world, the locomotive of the development of 3D printing with metals is the aerospace industry, and the titanium and its alloys have become the main metal to which such technologies were intended to be applied. “I thought, why not apply our unique developments in electron-beam metallurgy for 3D printing,” says the businessman. This technology helps significantly save on raw materials. Kovalchuk gives an example: while to manufacture a certain part in the traditional way 20-30 kg of titanium is consumed, then with 3D printing technology by Ukrainian developers – only 3-5 kg.
The company’s engineers have developed and patented a unique technology for 3D printing with metals, which has no analogues in the world. After a year of experiments, Chervona Khvylia developed and built a laboratory printer for 3D printing of parts made of titanium and other metals. It works with the use of a special electron-beam gun as a source of heating and an ordinary wire as a material for 3D printing. The company had enough of its own funds to build the first printer. But the introduction of new products to world markets also requires a lot of money, so the company constantly had to look for additional sources of funding. “One of the people I knew advised to apply for support to the European Union’s Horizon 2020 Grant Programme,” says the businessman.
At first, Kovalchuk was frightened off by the difficulty of filling out the grant application. Again, an advice of the friends to turn to professional consultants helped. With their help, in two weeks the entrepreneur prepared and submitted an application, which received a high score. A few months later a grant of EUR 50 thousand was credited to the company’s account. “Working with Horizon left a good impression. I had a ready working idea, so I knew the answers to all the questions addressed by the commission, which decided on the fate of the money,” Kovalchuk recalls.
Thanks to the funds received within the program, Kovalchuk’s company continued research. The leading aerospace companies of the world eventually became interested in Ukrainian development. The businessman does not disclose the details of the contracts, but, according to him, the price of a 3D printer for printing titanium parts ranges from USD 300-700 thousand and Kovalchuk already has orders for equipment.
Energy is rushing
The Ukrainian company Salix Energy, which grows energy willow that is a promising source of biomass for the production of energy from renewable sources, also received assistance from the Horizon 2020 European Programme. Energy willow is a close relative of the weeping willow. However, it grows very quickly, while it is extremely unpretentious to the soil. Saplings of energy willow become sprawling bushes after a few years. Grinding the wood of willow, you can get the material for burning and the production of thermal energy and electricity as well as for the production of pellets.
The company laid the first mother plantations in 2011. “The business of creating energy willow plantations has an investment load in the first year or two of plantation development. But they bear fruit for 25 years, and the only costs of this period are harvest,” says Iryna Hnap, Director of the company. According to her, investment in one hectare is about EUR 1.5 thousand.
Salix Energy obtained the first industrial harvest in 2014. According to Hnap, from 2011 to 2014, the company purchased equipment for planting and care, harvesting, prepared the soil for planting, developed plantations, tested and selected the best varieties of saplings, and adapted European technology to Ukrainian soil and climate. As of 2014, the company already owned 1.7 thousand hectares.
Since 2014, the company has been harvesting biomass, namely chips of energy willow every year. The main market for chip sales at that time was the Polish one. The reason is the lack of capacities for burning chips in the local market of Volyn Oblast in order to produce thermal and eclectic energy. After two years, the situation in the local market has changed, and the biomass grown is consumed in the local market.
In 2016, with experience and competences, Salix Energy became a participant in the international Sustainable Exploitation of Biomass for Bioenergy from Marginal Lands Project (SEEMLA) within the framework of Horizon 2020. For three years, the company received about EUR 130 thousand for research in the field of growing energy crops on barren soils.
Research work is very important for the development of bioenergy in Ukraine. For example, they explain at Salix Energy that global warming is taking place in the Volyn region, and farmers have successfully grown sunflower for several years, which was previously not typical of this region.
How do droughts affect yields of willow and other energy crops, which of the marginal lands are good for growing energy crops, what indicators of marginality are critical when choosing lands for cultivation? These questions were investigated by the SEEMLA project for energy willow, poplar and a thermophilic paulownia that is absolutely new for Ukraine. In many ways, it was the European grant that helped Salix Energy do the agronomic research. As a result of the tests and exchange of experience, the participants of the consortium (eight participants from four countries) made conclusions and recommendations for companies interested in such a business.
The heroes Focus told about are a good illustration of the proverb “He who seeks will always find.” Thanks to the participation in Horizon 2020 of the European Union, Ukrainian entrepreneurs were able to significantly expand the markets for the sale of their products and become partners of international companies, once again marking our country on the innovation map of the world.
Source – Focus