Victorian wheel manufacturer Carbon Revolution is on a roll after a successful raising of capital in 2016, and is predicting growth to accelerate in the years ahead.
The Geelong-based startup produces the world’s only one-piece carbon fibre car wheel, which is so technically advanced it will be offered as an option on the fastest Ford supercar ever made, the A$500,000 Ford GT, when it goes on sale in the USA this year.
Carbon Revolution CEO Jake Dingle says the idea dates back to 2005, when a student-led team at Melbourne’s Deakin University developed a prototype for Formula SAE (a student design competition). They proved the concept, taking a lot of weight out of the car where it is most important – the rotating mass that sits below the suspension.
“We almost halve the weight of a wheel. Cornering, acceleration and deceleration are dramatically improved, as is the overall efficiency of the car,’’ says Dingle.
Road to overseas markets
In 2010, Carbon Revolution presented their prototypes to European and North American car makers. That generated enough interest for them to realise their technology had the potential to disrupt the market for aluminium wheels, in the same way aluminium wheels disrupted the steel wheel market back in the 70s and 80s.
“We got government funding in 2011 under the Green Car Innovation Fund, and we more than matched that with equity and private capital,’’ says Dingle.
“That enabled us to start to grow and bring in experienced industry professionals from OEMs (original equipment manufacturers) and from companies like Ford, CBI (formerly owned by Bosch and Pacifica group) and Boeing. We built up a business around the PhD engineers who came up with the initial concept.
“No one else has a commercially viable competitor to our wheels – it’s a challenging thing to design and produce,’’ says Dingle.
The A$50 million raised last year will enable the company to expand, put plants in offshore markets and take production to the next level, increasing volumes and lowering production costs.
Carbon Revolution has a production target of 100,000 wheels by 2021, but with 100 million new cars hitting the road every year, the potential demand is far larger than that – and then there are other untapped markets such as aerospace and a variety of industries.
Dingle says Victoria has proved a very favourable business environment for the company, thanks to the state’s long-standing manufacturing sector.
“There is a strong culture of manufacturing here, and a lot of good skills,’’ he says. “Whether its production staff, engineers, logistics – even specialist skills in manufacturing accounting – there are good people available here for the new wave of industry.
“The Victorian government is pretty proactive and keen to help, and the Geelong Region Innovation and Investment Fund provided A$5 million towards our A$25 million factory build.’’
The intention is to list Carbon Revolution in 2019.
Dingle says it has been challenging raising capital for a manufacturing business in Australia, where there is a strong appetite for investing in digital, but more risk aversion when it comes to physical technology.
The aim is to maintain local ownership of Carbon Revolution – a third of the company is held by Europe’s largest aluminium wheel producer, Ronal Group, but beyond that it is largely Australian owned – and Dingle says the team have taken heart from last year’s successful capital raising.
“The fact that we managed to raise that A$50 million means that people understand our vision, agree with it and want to be part of it, which is pretty exciting,’’ he says.
“A successful listing will reward all the people that have put their faith in us up to this point, and the more mainstream investors such as the big financial institutions will hopefully then see that innovative businesses like Carbon Revolution are worth investing in.