Women in Cleantech Challenge
This report is part of How Governments Support Clean Energy Start-ups
How Governments Support Clean Energy Start-Ups highlights and unpacks government initiatives that help entrepreneurs get new clean energy technologies to the market, and offers recommendations to inspire innovation policy for net zero emissions. Read the report, and explore the case studies.
Government: Canada
Responsible government entity: Natural Resources Canada (NRCan)
External partner: MaRS
Target type of innovator: Female cleantech entrepreneurs with high-potential technology ideas who are underrepresented in the area of clean energy technology and need support for the faster development of their technologies and businesses
Links: www.womenincleantech.ca
Key elements:
- All finalists receive an annual stipend to give them financial freedom to commit 100% of their time to the start-up during the duration of the programme.
- It provides access to federal government research facilities to support technology scale-up and testing, with the costs of laboratory time and staff covered.
- Female entrepreneurs get a tailored three-year incubation programme at a private innovation support organisation.
- A cohort of finalists is developed, leading to a stronger network for these women-led businesses.
Summary of the types of support provided or enabled by the policy initiative
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Type of support |
|||
|---|---|---|---|
|
Financial |
Infrastructure |
Services |
Networking |
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Direct: stipend funding for finalists and a large financial prize for the winner |
Direct: access to national energy laboratories, and the costs of laboratory time and staff covered |
Direct: access to federal energy laboratory research expertise Indirect: MaRS was funded to provide an incubation programme |
Indirect: peer-to-peer networking between finalists, and MaRS is funded by the government to provide networking benefits |
NRCan launched the Women in Cleantech Challenge in 2018 to promote women-led businesses by supporting entrepreneurs in cleantech areas to scale their technologies and grow their businesses. It is one of six cleantech challenges in the Impact Canada Cleantech Initiative. NRCan designed the challenges to help address pressing environmental problems. Eligible technologies were those that are able to reach international markets, use fewer inputs, generate less waste and cause less environmental damage than the alternatives. The technologies needed to be between technology readiness level (TRL) 2 and 5 and be potentially “disruptive”, i.e. able to redefine the market for a given service and thereby capture significant market share from incumbent technologies.
The three-year challenge to support these women-led business has been completed. It attracted almost 150 entrants, and had 6 finalists and 1 grand prize winner. With the success of the Women in Cleantech Challenge, the delivery partner (MaRS Discovery District) was able to attract private-sector investment to support women entrepreneurs and launched the Women in Cleantech Accelerator with support from the Royal Bank of Canada. This helps support the idea that government programmes can seed organisational capacity building and follow-on private activity to deliver specific policy goals.
How support is made available and allocated
The Women in Cleantech Challenge involved a one-off call for applications that was open for two months. An evaluation committee, assisted by technical advisers, was asked to select a minimum of 25 applicants. Shortlisted applicants went through a more thorough screening process, including an interview with a review committee that selected ten applicants. These ten applicants attended a public pitch event at MaRS Discovery District where a jury of six judges announced six finalists. These six finalists each received a package of support over three years, during which time their progress was tracked by MaRS Discovery District, and the information provided to the jury who selected the single “grand prize” winner.
Financing
NRCan offered all six Women in Cleantech Challenge finalists a non‑dilutive unconditional grant of CAD 115 000 (Canadian dollars) (USD 90 000) per year in the form of a stipend during the time that they compete for the prize. The final duration of the stipend was three years and one month. The stipend covered living expenses and the travel costs for programme events, laboratory visits, and meetings with potential investors, customers and partners. The recipients could spend it in whichever way they found most valuable. Finalists also received a small budget for marketing.
The challenge additionally attracted applicants with a “grand prize” in the form of a non‑dilutive unconditional grant of CAD 1 million (USD 0.8 million) prize to be awarded to one finalist at the end of the three-year programme. The prize was awarded based on a range of performance metrics, including quarterly reviews, business development, valuation of the company, and on boarded investors.
Infrastructure
The Women in Cleantech Challenge finalists were provided access to federal government research expertise and facility access to support activities such as testing and technology development worth up to CAD 250 000 (USD 200 000) without co‑funding requirements.
Services
For the Women in Cleantech Challenge, NRCan partnered with a not-for-profit private innovation support organisation, MaRS, which designed and delivered the business service elements of the challenge. The business incubation support had a value of CAD 300 000 (USD 235 000) for each finalist. MaRS designed a tailored package of support for the six finalists, taking into account the needs of very early-stage technology developers and gender-related barriers. In addition, the services were adapted to the requests of the participating entrepreneurs once they entered the three-year programme. While the finalists were mostly at an early stage of development, the level of services went beyond that available through MaRS’ standard incubation and acceleration packages, especially in terms of the amount of hands-on support. The package included:
- a curated curriculum of in-person workshops and training in Toronto every quarter, responding to arising issues and covering dimensions specific to female founders
- remote learning modules taught by external experts (partly enforced by the Covid-19 pandemic)
- a hands-on mentoring team of business and technical advisers for each finalist that met with finalists as frequently as every two weeks depending on needs
- setting milestones for each finalist and in-person feedback on progress from the support team each quarter
- introduction to an investor network, and regular feedback from a team of investors on their progress against milestones
- speaking slots at relevant events in Canada and the United States
- assistance with some market research, for Canada and globally.
Networking
The six finalists followed a joint programme, including in-person training sessions in Toronto, which created a strong cohort and ongoing network among these business leaders.
MaRS introduced the finalists to various investor networks and provided opportunities for them to engage with potential customers and investors at a variety of relevant events, including international events where start-ups were encouraged to identify the best possible market and investment opportunities globally.
Evaluating and tracking impacts
The Women in Cleantech Challenge tracked results on a quarterly basis using quantitative and qualitative indicators, as well as narrative descriptions of progress. Finalists were required to report on key technical advances, development of prototypes, patents, business growth (employees and revenue), partnerships, investments, funding, awards and media recognition. MaRS assessed finalists on various entrepreneurial competencies and their participation and engagement with business accelerator elements. As part of the grand prize submission, finalists provided summary reports of technical and business progress, final qualitative and quantitative metrics, and plans for their next steps and scale-up. Given that projects are working on early research and prototypes (TRL 3-5), finalists were not required to report on greenhouse gas or other environmental outcomes. While there are no formal reporting requirements after the end of the challenge, NRCan will use interviews, technology and business news scanning and patents to monitor finalists’ progress and impact.
Finalists in another NRCan programme, Breakthrough Energy Solutions Canada, were required to estimate that their technologies could potentially reduce emissions by at least 0.5 Gt CO2 per year. NRCan developed a spreadsheet tool for applicants to complete.
Experiences and learnings so far
During the course of the challenge, the six women-led businesses were able to cumulatively attract CAD 52.5 million (USD 41 million) in investment.
The Women in Cleantech Challenge was a comprehensive package of funding and support that provides insights into the value of both direct and indirect support to clean energy technology start-ups. Six elements were particularly successful in the first cycle, most of which are challenging for the private sector to provide:
- The stipend model of grant funding was highly successful in attracting applicants from the target groups of innovators. In some cases, this provided the security to commit to the company full-time for the first time and spend on the most pressing needs, not just technology development. However, costs were not equal across participants, and differentiated amounts should be considered to reflect the variable costs, such as travel to get to on-site training in Toronto.
- The finalists rate the “cohort” effect (the bond among them) as one of the core benefits of participation in the programme, an advantage that was enabled by the programme design and in-person events and training. One reason this was so effective was the small cohort size, the similarities in stages of development (all finalists were early-stage start-ups), and the shared experience of all being women facing related and often underappreciated challenges. After the end of the programme, the finalists expect to continue to share challenges, experiences and opportunities with one another.
- Publicity and promotion at national and international events provided faster access to investors, industry partners and customers.
- National research expertise and facility access for testing and validation was highly valued as the cost of this process is normally a barrier to the scale-up of technologies. Continued collaboration support from government researchers and research facilities is critical to consider when investing in this space, particularly to support the scale-up of clean energy technologies.
- The indirect provision of business services and market research provided recipients with greater awareness of international opportunities and less pressure to be limited to domestic markets.
- The customised training and quarterly feedback, while relatively costly, allows start-ups to progress more quickly, especially if they have little prior business experience.
Complementary and related programmes
Breakthrough Energy Solutions Canada, a partnership launched in 2019 by NRCan, private investor Breakthrough Energy Ventures and the Business Development Bank of Canada, a public investor. It is supporting Canadian entrepreneurs in commercialising clean energy technologies in the areas of manufacturing, electricity, transportation and buildings. After an initial call for proposals, ten recipients were selected for non‑dilutive finance to develop technologies as well as incubation and acceleration support. Breakthrough Energy Ventures and the Business Development Bank of Canada provide feedback on progress and will consider equity investments in the companies.
Science and Technology Assistance for Cleantech (STAC) was launched under NRCan’s Clean Growth Program as a new means of providing small and medium-sized enterprises (SMEs) with in-kind access to technical expertise, equipment and infrastructure at federal laboratories and research centres. It allows contribution agreement funds to be combined with in-kind science and technology services to improve the chances of successful outcomes for cleantech SMEs and Canadian society.
This article has been produced with the financial assistance of the European Union as part of the Clean Energy Transitions in Emerging Economies programme. This article reflects the views of the International Energy Agency (IEA) Secretariat but does not necessarily reflect those of individual IEA member countries or the European Union (EU). Neither the IEA nor the EU make any representation of warranty, express or implied, in respect to the article's content (including its completeness or accuracy) and shall not be responsible for any use of, or reliance on, the publication.
The Clean Energy Transitions in Emerging Economies programme has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 952363.
