Joining Innovate UK’s Scaleup Programme has put the cleantech company ICAX in a very strong position to take its new domestic heat pump product to market. It now has a clear commercial strategy and a well positioned product, has switched to a new financial modelling process and secured R&D funding from the Welsh Government, with more to come once manufacturing starts. It has also onboarded new members of staff, improved its organisational structure and secured manufacturing opportunities in Wales. All of this in less than two years.
ICAX is helping the UK meet decarbonisation targets through its ground source and air source heat pumps. These pumps recycle heat, providing onsite renewable energy that helps the UK deliver on low carbon building targets.
Scaleup Programme helps ICAX break into Cleantech market
The company has benefited from Innovate UK funding and support in the past, for specific technical and R&D projects such as Smart Local Energy Systems. ICAX was invited onto the Innovate UK EDGE Scaleup Programme - an initiative that helps the highest growth potential businesses achieve their ambitions through intensive and bespoke support – in order to help break into the UK domestic heat pump sector.
The company, which had an annual turnover of less than £2 million when Innovate UK EDGE started working with it in December 2019, was already building heat pumps for large commercial projects and had created a prototype heat pump for domestic use. “That was why the Scaleup intervention was required,” says Steve Smith, one of the three Innovate UK EDGE scaleup directors working with ICAX on the Scaleup Programme. “We helped it develop a roadmap to mass produce the domestic heat pump and take it to market. It required a real step change in how it worked.”
The scaleup directors have been working closely with three ICAX directors, including weekly meetings. “There has been an intensive level of input and momentum, which has really driven progress,” says Mark Hewitt, Director at ICAX. “We had a very ambitious programme and in some areas, we have actually exceeded our targets. We definitely would not have got to where we are now, this quickly, without this team.”
Steve says ICAX, which is projecting £6.5 million in turnover this year, is now a more robust and commercially-savvy business. This is partly due to switching to open banking, a move that increased the company’s credit rating, giving it a significant credit limit uplift and enabling it to buy better.
ICAX has also relocated its supply chain. Previously, it was sourcing 80% of its products from China, but is now targeting at least 80% from the UK. “It’s a much more secure and cost effective supply chain and it’s of huge benefit to UK plc,” says Steve.
The scaleup directors helped ICAX identify four manufacturing bases in Wales, where four sub-assembly suppliers are located. This should lead to further financial support from the Welsh government, once the factories are operational.
The result is that ICAX is well placed to establish itself in a rapidly growing and important marketplace in the UK and to help achieve net zero.