Emrod is raising funds through a SAFE at a valuation cap of $17 million and with a discount rate of 20%. The price is high for a company that is still in a very early development stage. It also represents a revenue multiple of around 52x — quite high. Emrod does have a massive addressable market and its technology has major potential, factors which likely drove the high valuation. However, given the company’s current progress, $17 million is not a fully justified price.

Emrod’s power transmission technology has all manner of potential applications, but its target market itself is massive. The global power transmission and distribution equipment market was valued at $256.5 billion in 2020. The market is expected to reach a size of $312.8 billion by 2026, growing each year by 4.8%. The wire and cable section of that market — which Emrod technology could be replacing — accounts for $117.7 billion of that 2026 figure.

While wire certainly can and has serviced most of the market, there are certain environments for which wireless power transfer is either the only option or a far more practical choice. Examples include across oceans or otherwise inhospitable environments. While Emrod has competitors, its potential market size remains absolutely massive while it is the first on the scene with this kind of technology.

Emrod founder and CEO Greg Kushnir holds an MBA from NYU Polytechnic. Kushnir has been working in technological fields since the days of LAN Manager at AIG in 1996. He spent a few years in product management, business development, and marketing and sales before he started leading companies. After several years in the role of tech company CEO, he founded Peregrine Pacific, his entrance into venture capital. He went on to co-found and direct Zodiac Psychics, a networking app for supernatural service providers. Zodiac Psychics was successfully sold to a venture capital firm in 2019. He also co-founded and directed Tatau, a blockchain-based distributed computing platform based in New Zealand.  While Kushnir has extensive entrepreneurial experience, he has not worked in the power industry before Emrod. 

Lead Scientist Ray Simpkin holds a PhD in electromagnetics from Imperial College London. He has several decades of experience working across public and private sector research and development spaces. He became a senior research scientist with Industrial Research Ltd in 2001. He took on the role of “Distinguished Scientist” with Callaghan Innovation i until his move to Emrod, where he worked on developing the long-range wireless transfer technology.

Product Manager Mark Tomkins has a degree in electrical engineering from the University of Auckland. He claims many years of engineering experience with companies as far-ranging as the UK, Indonesia, and New Zealand. Apart from his engineering roles, he has spent some years in project management for Jacobs and Ergo Consulting. CEO Kushnir brought him on to support Emrod in both project management and electrical engineering roles.

The Emrod team has expanded to nine members with varying degrees of commitment. Kushnir appears to have supplemented his lack of power industry knowledge through multiple technical team members. However, the team does not have an established track record of building products and scaling companies.

Emrod sets itself apart by being the first commercial offering of a long-range wireless power transmission technology. None of its competitors offer that kind of tech. Even without the high levels of efficiency offered by wired transmission, wireless power transfer has specific use cases that can’t be duplicated. It can be deployed in areas where wired power transfer can’t and can be done easily and cheaply. Enrom does this in a significantly different way than previous wireless concepts: by focusing beams rather than sending them omnidirectionally.

Emrod’s technology is made through highly advanced technology and has been in development for more than two and a half years. While its patents are still pending, it is unlikely competitors will be able to duplicate it in the near future. Once those patents are granted, Emrod will cover the transmission and relay aspects of the technology. However, due to the lower efficiency of wireless power transfer — and existing infrastructure that supports wired power — wired options are likely to be far superior in many cases.

Despite not having a functioning product yet, Emrod has taken in funds through grants from New Zealand’s innovation agency and $2 million in prior fundraising. It has confirmed an infield project for 2021 and signed memorandums of understanding with three organizations, with others underway. Considering it started on proof-of-concept in early 2019, that’s rapid progress. There’s still a lot of work before Emrod can be a properly profitable enterprise, but for now, it takes in revenue from pilot projects.

An investment in Emrod comes with a very high risk profile. While Emrod has a prototype and proof-of-concept for its technology, it hasn’t demonstrated through trials that it works. The transfer has to function, and it has to do so on a level approaching the efficiency levels Emrod has indicated. Otherwise, it will not be commercially viable. The line of sight limitation could present significant issues in actual testing that wouldn’t be evident during initial development. There is also significant team risk for a startup with a single founder, and some team members are committed to other endeavors. There is the chance that the market will be hesitant to adopt an unproven technology, even with its potential for game-changing benefits.

Most significant of all, Emrod is a long-term proposition. Having only a working prototype means the startup is many years away from the commercialization it envisions. Getting there will require experimentation, design, refinement, and finally scaling. Reaching that point will require time and resources, which means investors won’t see returns for some time. As this has never been done before, it’s impossible to say how long that refinement period will continue. 

The opportunity to be part of a potentially game-changing technology is always exciting. However, investors should keep in mind that proof-of-concept is a long way from a viable product. Emrod still has years of resource-intensive labor to convert its theory into practically useful consumer products. In the meantime, existing wired infrastructure continues to be laid, and sudden innovation in energy storage could render Emrod’s innovation less useful.

As with any startup, investors should be aware of the possibility that Emrod might not succeed in business, even more so with a technology company like this. There are so many things that could go wrong that would make the product unviable. Even if they don’t, there’s no guarantee that other solutions to Emrod’s proposed use cases couldn’t develop in the meantime.

Assuming the Emrod technology does work, it has the potential to bring huge changes to the way energy is transported and how vulnerable communities can stand up to natural disasters. It can make renewable sources less dependent on nonrenewables for actual use. It can provide rapid sources of power in the event of disasters, and it can accelerate the world’s progress toward carbon-neutral power.

These may sound like benefits for the planet rather than investors, but investors can benefit from this as well. Public opinion for energy innovation is more supportive than ever before. Governments are investing huge resources into promoting technologies like this, and big companies are often on the lookout for acquisitions to expand their portfolio. As the first to utilize this technology, Emrod has huge potential for an acquisition that could net investors a significant return.

Emrod is bringing long-distance, wireless power transmission to commercial markets. Its tech, which is still in the prototype stage, uses innovations in radar and metamaterials. Emrod’s patent-pending technology has the potential to revolutionize how energy is transmitted around the world. It has myriad use cases, which are especially relevant as the world braces for climate catastrophes and works toward a carbon-neutral future. However, the technology remains unproven, and commercial deployment is likely far down the line. Emrod will need some years of development and refinement before it is fully ready to enter the market. Still, there is nothing else like this on the market so far. If the technology works, it has the potential to transform the world — and investors that get in now could reap some of those benefits. For these reasons, Emrod has been rated a Deal to Watch.

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Analysis written by Benjamin Potts.