Westgen’s Successful Capital Raise Story
We interviewed Westgen Technologies President Connor O’Shea about his journey as an entrepreneur, the challenges faced during the Pandemic, and how they managed to secure more than $4 million in non-dilutive funding.
The global cleantech market is projected to exceed roughly $3.3 trillion by 2022, about 2% of anticipated global gross domestic product (GDP). Now we have clean tech and sustainability Canadian innovators that are among the fastest-growing businesses in the world. We sat down with Connor O’Shea, Westgen Technologies Co-Founder, and CEO, to find out more about his exciting fast-growing sustainable company, and learned how his story can inspire others with a similar market solution.
- Can you give us a short introduction to Westgen Technologies Inc?
Westgen is a leader in progressing the energy industry toward zero-emission sites. Westgen’s EPOD, is a solar-hybrid power generation system that provides an economic solution to eliminate methane emissions, reducing site emissions by up to 99.5%.
Beyond emissions reductions, the patented and award-winning EPOD reduces capital costs, reduces operating costs, improves reliability, and generates carbon credits for oil and gas producers. Since EPOD launched in 2019, over $30 million has been sold to 45+ oil and gas producers across North America.
2. What motivated you to start this company?
Westgen was started in 2018 by my co-founder Ben and me after a serious accident that injured a field worker when vented methane gas emissions caused a flash fire on a website. There was no practical solution to eliminate these emissions at the time. Recognizing the safety risk and environmental impact of methane emissions, we felt that this was a problem worth solving. Together on evenings and weekends, we worked on our technology design and started our company, called Westgen Technologies Inc.
3. What has been your biggest satisfaction and challenge so far.
Our company has grown from two unpaid founders in 2019 to over 70 staff today and we are projecting over 100 by the end of 2022.
We are proud that we have achieved this growth in three years without raising external capital until May 2022. In November of 2019, we sold our first unit for a small profit. We negotiated attractive payment terms with our vendors to create a negative cash conversion cycle allowing us to grow our business with cash flow from sales and support from government innovation agencies.
The biggest challenge was facing down the pandemic with our nascent business. We went into the pandemic as 2 unpaid founders with 3 customers. We persevered and emerged two years later with 9 staff and 25 customers. By the time we finally got together in person in the spring of 2021, most of our employees had never met each other in person!
4. Where do you envision going in the next 5 years?
In November 2021, the US Environmental Protection Agency announced a new proposed rule that will virtually eliminate methane emissions in the US oil and gas industry. This announcement crystalized a $10 billion retrofit market in which we are market leaders. We aim to scale our business as fast as possible over the next 5 years to take advantage of this market opportunity.
5. The Canadian government offers many support programs to develop innovation and startup ecosystems. What are the resources that you used and what works for you? Tell us about the experience!
We are happy to say we have a very youthful team thanks to a number of ‘under 31’ wage subsidies from Eco Canada and UNAC. We had success with supporting specific staffing needs from Alberta Innovates, NRC IRAP, and PrairiesCan. In our second year of business, we were successful in funding a $4 million project through Sustainable Development Technology Canada and Emissions Reduction Alberta.
6. What is your advice for those who consider applying for grants and debt financing.
Like everything else in the business and in life, applying for grants and debt financing is about building relationships and getting people exciting about what you are doing (aka selling). When meeting with innovation agencies and banks, focus first on getting to know the person, building a relationship, and building their confidence in your business. Let them be the first to bring up the topic of money.
7. When looking for alternative sources of capital, why did you choose debt, and why OKR Financial?
We were fortunate to find product-market fit quickly with our business and establish favorable payment terms with our suppliers. Despite this, our business required cash for the first 3 years. We turned to every source of non-dilutive funding we could find — grants, an operating line, a term loan, and a bridge loan from OKR. Doing so allowed us to scale our business and achieve a great valuation prior to selling any equity. OKR was responsive and was able to margin some of our grant and SRED receivables. The process was straightforward and easy. We have no regrets about choosing this path!
Originally published at https://www.linkedin.com.