Sherbrooke, Que,-based Oneka Technologies has raised $5.5 million in a round of equity and non-dilutive funding led by Nova Scotia venture capital Crown corporation Innovacorp, and plans to establish a base in Atlantic Canada.
Founded in 2015 by mechanical engineer Dragan Tutic, Oneka manufactures wave-powered seawater desalination systems housed inside autonomous buoys. The company started as a student project and is now aiming to sell its technology to resorts, coastal communities and the owners of private islands.
Tutic, now the CEO, said in an email that his team has already tested a prototype off Eastern Passage near Dartmouth with the help of a roster of local contractors, including industrial diving company RMI Marine and data analytics firm LeeWay Marine. The success of the project has spurred him to permanently locate a prototype-testing team in Nova Scotia.
“Nova Scotia and Halifax have great infrastructure regarding marine equipment assembling and deployment,” he said. “In addition, there is a deep know-how regarding ocean technologies and operations. This encouraged us to develop new partnerships for future collaborative projects.”
The prototype testing team has already left Nova Scotia, but Tutic said he forsees Oneka returning in a permanent capacity by 2022.
He said he has not yet decided where all the links in Oneka’s supply chain and logistics network will be located, but he anticipates a coastal city being pivotal to those plans.
“As we're moving to larger-scale production, especially for larger units, that's where we might need more presence in a coastal place,” Tutic said in an interview. “And when you look at Canada, Nova Scotia is pretty much the best option.”
The $5.5 million will be used to finance Oneka’s first two commercial projects in Florida and Chile. The Florida installation is being sold to the Ocean Village Property Owners Association -- a seaside retirement community that the company said in a press release will act as a jumping-off point to enter the resort market in the United States and Carribean.
Oneka’s latest funding round builds on a $2 million angel round from 2018, with several returning investors.
As well as Innovacorp, the newly inked deal includes money from San Francisco’s Baruch Future Ventures, German filtration and vacuum system giant Mann+Hummel, Chile’s Renewable Energy Development Enterprise, and several angel investors. The company also received grants from Investissement Québec and Economic Development Canada and Sustainable Development Technology Canada.
Renewable Energy Development Enterprise will also be a collaborator on Oneka’s expansion into Chile, which will see the two companies deploy Oneka’s technology in remote communities and mine sites.
Tutic has wasted no time deploying the capital. He said he has already doubled the size of his team, from around 10 people to about 20. He is also still looking to hire a project manager for Oneka’s offshore operations, having not yet found a candidate who is the right fit.
“The world is running out of clean water and Oneka has a solution,” said Innovacorp Investment Manager Jonathan Saari in a press release. “It works, it’s affordable, it’s better for the environment, and it can be scaled from local disaster relief and regional demand all the way to meeting utility needs.”
The seawater desalination industry was worth just shy of $16 billion globally in 2019, according to San Francisco consulting firm Grand View Research, and could grow to more than $32 billion by 2027.
But that growth is likely to come at a cost: Conventional desalination methods are very energy-intensive and are often powered by fossil fuels. Oneka said in a press release the industry could produce as much as 2 billion tonnes of CO2 emissions annually by 2050. Globally, civilization currently emits about 50 billion tonnes of CO2 each year, according to Our World in Data.
But because Oneka’s technology is powered by renewable energy, it could help meet the demand for desalination without contributing to those emissions.
“My team and I are proud to welcome these new financial partners,” said Tutic. “This partnership with Innovacorp, Baruch Future Ventures and our strategic investors will enable us to reach the next level on our path to becoming the world’s leading sustainable desalination solution.”