We are in an exponential age – the leading edge of the next innovation super-cycle that will have far reaching impact on society, business and economies. This next period of disruption will be bigger, faster and more profitable than the digital revolution.
At Chrysalix, we have built our reputation on bringing disruptive innovation to the world’s largest industries by focusing on where technology meets physical science. We invest in the key enablers of intelligent systems and automation platforms – technologies that combine sensing, thinking and acting to unlock new services, new products and new production processes.
Our investment thesis is that the biggest impact and opportunity for the exponential growth of sensors, data sets and computing power is in large industrial sectors that have been relatively untouched by digitization, and where concentrated and proprietary data monopolies have yet to form like in the consumer sector. These traditional industries are also facing massive market pressure from decreasing productivity, increasing capital and labour costs, inefficiency and excess waste, and have challenges accessing and implementing innovation.
Over our 15-year history, Chrysalix has built a deep understanding of large industrial markets. We have sourced, built and invested in successful start-ups with breakthrough innovations. We look for company profiles that address these large market opportunities and can be de-risked quickly to achieve attractive early-value inflections. Key attributes are:
- Scalable technology that can be de-risked at low cost;
- Compelling fundamental economics that create value and drive adoption;
- Business models that capture that value and simplify buying decisions;
- Concentrated customer groups with large projects leading to rapid revenue growth;
- Broad set of strategic partners, suppliers and acquirers;
- Quantifiable total cost; and
- Top notch teams.
Example Investment: MineSense Technologies
MineSense Technologies is a sensor-enabled IT company that upgrades metal ores for the mining industry, playing at the intersection of the industrial internet, data analytics and machine learning to create and apply valuable information the mining industry has never seen before.
We recognized early-on the massive potential for these disruptive technologies in the mining sector. The industry is facing significant pressure from historic low commodity prices, decreasing productivity, and increasing costs from lower ore grades and more complex mineralogy that is found in deeper and more remote mines. The market pain is only enhanced by the lack of R&D investment and slow adoption of innovation due to the traditional conservatism of the industry.
In particular, the economics of a mine is very sensitive to the input material; yet the visibility, resolution and availability of real-time data is limited. Mining operations today assume homogeneity of mine blocks at large length scales and do not account for natural variability in ore distribution. Blocks are designated based on static, point in time measurements with little sampling, leading mines to routinely misdirect significant quantities of ore to the waste dump and waste to the mill, which is extremely costly and energy intensive.
This deep understanding led to our investment in MineSense, a smart mining company that has combined sensing, thinking, acting and engaging in a solution that provides unprecedented ore-grade resolution, precision and accuracy to enable real-time decisions and enhanced mine knowledge.
The technology can be applied to a wide range of Cu, Ni, Cu/Au, and Fe ores and is enabled by new differentiated low cost sensors. The solution can be configured to integrate with shovels and scoops or with conveyors to allow the operator or an automated actuator to sort the rock according to value and direct it appropriately. The upgrading of ore through pre-concentration impacts every downstream process cost (energy, labor, capital) and creates an annual value of up to $200 million per mine while minimizing the environmental impact of emissions, water use and tailings.
Although MineSense represents a “cold start” from a data acquisition perspective, by creating a significant and immediate value for the customer, MineSense has created a virtuous cycle for rapidly building large data sets and proprietary insights for a mine. Considering the rising cost of exploration for the identification of new deposits, the use of machine learning algorithms to recognize complex patterns and correlations from more granular data sets enables better predictive maps and exploration models to be developed.
MineSense Technologies is an example of Chrysalix’s thesis-driven approach for investing in intelligent systems and automation platforms that can unlock big industrial markets, and is representative of the impact of exponential technologies on large industries facing transition.