The acid test of a supposedly breakthrough technology is whether customers are willing to pay for it.
AIM is littered with companies with bright ideas that have failed to convert into money-making products.
It is not always the innovators that are at fault.
The finger can often be pointed to the advisers who brought tech minnows to the equity markets well before they were fully incubated commercially.
So it is exciting to see a business gearing up for a float that has not only copper-bottomed the technology and sought third party validation for it, but is also making sales of said product.
Mapal Group, founded in 2007 and funded to date by around 300 UK seed-funders, has created a unique, low cost system that could revolutionise the way waste water is treated.
Currently there are two main methods used to insert the oxygen needed to break down the organic contaminants found in sewage: mechanical aeration and diffused aeration.
The former, which introduces water into the air, is very energy intensive and is prone to breakdown.
The latter is the gold standard – it is far more efficient at introducing fine bubbles into the process and offers significant energy savings compared with the old method of treatment.
The problem is that diffused aeration is very difficult to retrofit into existing lagoons and reactors.
So, Mapal has come up with an ingenious method called the floating fine bubble aeration (FFBA) system, which as the name suggests floats across the top of these giant water tanks.
It was created by Hanoch Magen, the company’s chief technology officer, who worked for Israel’s state utility, and was borne of the same lateral thinking that has helped a nation irrigate large tracts of barren desert in order to feed its population.
However, some of the first adopters have been UK’s water companies. In fact three of the UK’s biggest companies – Thames Water, United Utilities and Anglian Water - now all have a site using Mapal’s system.
Mapal believes that this third part-party validation will allow it to go out and sell the FFBA worldwide.
“This is a conservative industry, so to have these companies [on board] provides very good reference sites,” said chief executive Zeev Fisher.
“We are able to tell them [prospective customers] this technology has already been tested by United Utilities, Thames Water and Anglian.
“These are tightly regulated businesses that have a real eye on what they are dong, so it had to work 100% for them.
“From a sales point of view this sort of validation will open doors.”
The AIM float is likely to occur this side of the summer break and the funds raised will be used to gear up the commercial operations.
Here in the UK and Ireland there are 13 water company with approximately 2,000 waste water treatment plants that could deploy this ‘matured’ technology.
The latest wave of water regulation imposed by Ofwat, and embodied in AMP6, which commenced in April, means companies will have to be more productive and cost-efficient.
Of course, Mapal’s technology helps in this endeavour as it could put a dent in our £4bn year waste water treatment bill.
But while Britain has been an excellent test bed for a conservative industry, the plan is, with the help of the funds raised from the stock market listing, to take the FFBA technology around the world.
Initially it will target new territories such as Latin America and Australia, as well as commercial markets such as pulp and paper that use a lot of water to create their finished products.
And it has a three-pronged approach: it will sell the product direct, rent it to the customer, or install it on the basis of sharing the cost savings.
This means Mapal isn’t unduly restricting its potential marketplace.
“We have so many leads and proposals submitted to potential customers,” said Mapal co-founder and CEO Fisher. “We have sales agents and distributors, so we are spreading internationally.
“For a company the size of Mapal this is a whole ocean of opportunity. We need to establish ourselves as a good company and grow the revenues.”
Under Fisher, Mapal is ready to hit the ground running when it joins the stock exchange’s junior market.
And as mentioned earlier it is the antidote to the half-baked university spin-out.
“Investors are looking for companies that have a good future, where the story is interesting, there is minimal risk and where the company has already started selling,” said Fisher.
“This is what we are. We are an established company with blue-chip customers with a technology that has global applications. It serves a huge market with needs.”