Underwater Robotics Technology – Interview with Igor Martin, CEO of Hydromea
Interview was conducted by Nina Fois, QUORUS GmbH, Research, Marketing & Communications and Isabelle Ganz, Partner of QUORUS Gmbh
Hydromea is a Swiss-based RaaS (robotics as a service) company developing a portable underwater robotics platform that will certify the integrity of submerged assets for many clients in the water-based market verticals. Its core expertise lies in underwater robotics and navigation as well as through-water wireless communication and data algorithms. The company was founded in 2014 in Lausanne, Canton of Vaud, by two German engineers with each 15 years of experience in fundamental research and development in the Academia. Both founders joined the École Polytechnique Fédérale de Lausanne (EPFL – one of the top engineering institutions especially known for its excellent experience in micro-engineering and robotics) – obtaining a grant to work on underwater swarming technology. In the last five years, Hydromea worked on key-enabling components that allowed the company to increase its strategic value by building the world’s first portable autonomous underwater drone for confined flooded space inspections. Thanks to this drone platform, it will be possible to fly the drone autonomously and provide integrity data about an asset in real-time, something that would be impossible with the traditional methods.
1. How would you describe the purpose and competitive advantage of Hydromea?
Hydromea’s purpose is to certify the submerged asset integrity in various water heavy industries, something that today has high costs, leads to significant downtime of assets and may result in safety accidents Although the initial focus of the company is on the hydropower and the offshore market verticals offshore oil and wind), there is great potential in many water based indu stries l ike aquaculture , water /sewage infrastructure, nuclear or water plants.
The industry of aerial drones h as been growing immensely over the last decades, yet have you heard about underwater drones at all? Probably not. And that’s because there aren’t any today. Water is a different and in many ways much more complex element than air and it requires completely different technologies to navigate and communicate in for instance, radio waves that the aerial drone industry is built on cannot penetrate water . This makes simple things like GPS, navigat ion and communication a very tough challenge to overcome using other methods. And this is where Hydromea have built an unfair advantage over the last 15 years in academia and early days at Hydromea.
2. For what reasons did you choose Switzerland as your location, especially with regard to other attractive locations in Europe? What were the key elements the Swiss parquet offered and which of these elements played the decisive role in your decision-making?
The choice of Switzerland as a business location was a consequence of events and decisions made by the two co-founders. Being an ocean-tech company, Switzerland was not a natural choice for Hydromea that should have ideally be settled in the tech clusters near the ocean, like the United States or United Kingdom, Norway, Japan or Canada. This distance presents its challenges, this is why the company decided to establish also a legal entity in the United Kingdom, Scotland.
However, it is worth mentioning that the country’s high level of education, research and innovation as well as its vibrant and innovative environment and the startup ecosystem of the Swiss universities are perfect to set up innovative companies. Not by chance, Switzerland is ranked at the very top of the innovative countries.
It is also important to note that EPFL did play a key role in the establishment of Hydromea: EPFL is one of the top engineering universities in Europe and it is widely known in the fields of robotics expertise and micro-engineering. It is a very strong academic institution with a lot of talented people and a strong ecosystem and expertise in the concerned sector. We have less competition for the top engineering talent who wants to enter an autonomous robotics space than if we were in the US or UK. There, we wouldn’t be able to compete with Google, Amazon, Tesla and other giant companies all looking for talent in autonomous technologies.
At the same time, the EPFL’s limnology department has a worldwide reputation and is exactly where the company’s project started. Networking opportunities as well as patent/brand regulation and protection are other factors that have been taken into account.
3. Which Swiss financial instruments could you benefit from when you set up your company?
Hydromea could benefit from private and own funds and from the confederation’s public funding, thanks to the grant awarded by the government to Hydromea and EPFL that allowed the company to focus on the development of the component’s side of its platform. So it served as a great springboard for our company.
In its later stage, Hydromea also profited from risk capital financing, thanks to the pre-seed round that took place in November 2019 and subsequent seed round that we have just closed in June 2021. The funds will help us through the co-funded project by a Scotland-based offshore innovation hub NetZero Technology Center, also supported by Total Energies. At the end of this project next summer, we shall launch our first commercial drone and be ready to scale up.
4. How can a startup approach an investor in Switzerland, what were your experiences in this regard? What advice would you give to a startup when looking for investors in Switzerland?
The small size of the country enables you to join the Swiss startup ecosystem making new contacts very quickly. Moreover, there is a greater number of events that give exposure to potential investors interested in doing investments in similar companies. These events give you the possibility to establish the right relationships indispensable to raise money in the future.
When I joined the company, I immediately started to develop and expand our network in the Swiss startup ecosystem. The country has a lot of resources and opportunities available and getting introduced to the right people, talking and presenting your idea and your project are an essential part of the work needed when looking for investors. The advice I would give to somebody coming to Switzerland is to begin doing the preliminary research work and connecting with the people and the network already from the outside, do not wait to be in Switzerland to start doing it. Someone said that if you ask for money you get advice, if you ask for advice you get money. So keep this in mind as you
5. What challenges did you have to overcome during the foundation, development, and establishment phase?
The most important challenge was to find the right product/market fit. It’s not enough to have a great idea, someone needs to be convinced, too, that your idea is great and make them pay money for that. And this is only possible if this idea resolves one huge headache for a customer. There is a lot of inertia generally across most businesses and people are generally risk averse. For someone to put a foot forward and say “we need this solution”, they are typically creating an additional work for themselves. It better be worth it.
Once the product/market fit is there, this would not be enough. In order to raise money, it is very important to have a solid business model that can show how you intend to monetize your project profitably, what your plans are to scale the offering and how you are going to realize them.
6. What concrete opportunities has Switzerland offered you as a business location? What
advantages does Switzerland offer for scaling up a successful startup/company?
The Swiss environment is favorable for startups and in general for those aiming to start a new business. That said, the differences between the Swiss cantons should not be underestimated: each of them has different offers and specific industry clusters, i.e. the focus in a particular field. Hydromea was founded in the Canton of Vaud that offers a good share of support addressed to startups active especially in the field of technology, robotics and engineering.
In this regard it must be said, that other European countries, such as the United Kingdom, are not too far behind Switzerland and have a well-thought through startup support system with specific programs and direct funding mechanisms. The way Swiss government startup funding works is quite different from many European countries. Here, the government do not provide direct financial support to startups. Instead, startups can receive R&D funds through the grants made available to academic institutions like EPFL and ETH. It is therefore very important to quickly find the right academic partner that understands your ambitions and can help you realize them taking your projects to the next stage.
Hydromea is planning to scale its business outside Switzerland. As I have previously mentioned the company already has a legal entity in Scotland that is particularly important given its location by the North Sea. The company’s project has been accelerated thanks to the collaboration with a technology center based there, which has great exposure to the offshore industry (oil, gas and wind). The team spent almost half a year in Scotland in 2019 studying the market, connecting with local experts and successfully identifying key market pains and potential customers for our solutions.
What factors should foreign founders consider when starting a business in Switzerland? What
Russian companies or startups need to bring in order to take the step into the Swiss market?
When establishing a business in Switzerland, there are several factors to consider, starting with the country’s subdivision in 26 cantons, each with its own specificities. It is therefore important to evaluate them and make sure you choose the one that best matches with your project.
Foreign/Russian companies and startups that are willing to take the step into the Swiss market should consider the following elements:
- Prepare the documentation in the proper way and learn the Swiss way of doing things: make sure to understand how things work in Europe/Switzerland and take every chance you get to visit the country before you relocate. Be open to learn and to understand how people present their ideas, how they talk and how they run their business. Try to learn more about who the investors are and what their interest is. In Switzerland there are plenty of events organized for startups, where you can meet interesting contacts and understand how things work here.
- Culture is a very big, sometimes even critical, element in the process of establishing a business in a new country. Even if Switzerland is very international and many investors are not Swiss, it would be advisable to have a local partner that can help you through the whole process, introducing you to this ecosystem. Do not be shy but be prepared to do the homework and most importantly stay open and positive, listen before you speak and take an opportunity to learn before you teach.
- The support projects for startups are very well organized and available in English, therefore you do not have necessarily to speak French or German.
- Once again, the choice of the canton is very important, because of their different regulations and support mechanisms, etc. For example, while the Canton of Vaud and the Canton of Zurich are very well known in the field of robotics, AI projects and technology in general, the Canton of Zug is internationally known thanks to its strong fintech ecosystem.
- Make sure to identify the right clusters, because there you will find the talents and potential investors that will help you take your project to the next step.
What advice would you give to a startup/company when looking for investors in Switzerland?
In general, it is very important to have a well-prepared basic documentation. A good and holistic set of documents will provide you with a solid starting position. In this regard, there are three important points that should not be forgotten:
- To be able to attract investors, your company pitch must be simple and give a clear overview of your idea, its importance and its potential also explaining how you will monetize it. Depending on the stage of your project, the business plan is not always necessary: this is the case of the seed stage, where many things are still very fluid. It should also be clear how you intend to go to the market with your products and how you will reach your potential customers inside and outside of Switzerland.
- Establish a direct contact and keep an open channel with the investors trying to understand who they are, where and why they invest as well as what their concerns are. If you have the possibility to speak with them, take it and try to understand if you are on the right path using their feedback as guideline for the future. It is very important to be mindful how you decide to set up your project and communicate it to third parties.
- Be ready to listen and learn from others: we constantly learn and Hydromea would not be where it is today if we would not have considered new ideas and suggestions. Challenge yourself and be open to ideas and recommendations from others.
Igor Martin graduated in economics and industrial engineering at the Saint Petersburg Technical University. After obtaining an MBA in the United States, Igor Martin worked over 15 years for an American multinational corporation, where he ran a global business. When the business was sold to another company, he decided to join Hydromea becoming the third (late) co-founder of the company. “The underwater tech was a completely new field for me, but I love the challenge of creating and scaling-up a business into a successful enterprise.”