CUSTOMER STORY • START-UP

FREDsense Bacteria Sensors Ensure Water Is Safe And Contaminated Soil Can Be Monitored For Reclamation

THE CHALLENGE

Develop cleantech solutions that are

simple to use in the field for real-time

testing and reclamation monitoring of

dangerous contaminants in water.

THE RESULT

A simple-to-use electrochemical

biosensor system using bacteria to

measure levels of iron, arsenic, and

manganese in the field in real time,

eliminating the cost and time of

conventional lab analysis.

COMPANY: FREDsense Technologies

FOUNDED: 2014

INDUSTRY: Cleantech, Water, Oil and Gas

RESULTS, OUTCOMES, AND ACHIEVEMENTS

Finalist in an arsenic field kit challenge, sponsored by Xylem and the EPA Bureau of Reclamation.

FREDsense technology is in use for water projects in Arizona and California, and at mining reclamation sites in Quebec.

Biosensor technology proven to work as well as traditional technology in a lab, and faster and less expensively in the field.

Raised $1M+ in equity financing, beginning with $100K from SU.

2017 Finalist in the Imagine H2O accelerator.

2017 SU Global Grand Challenge Award Winner for Water.

“... we founded the company as an

environmental remediation solution,

helping those who need to come

in and treat water or different waste

effluents to provide safeguarded

means of ensuring that our

environmental and drinking water

supplies remain clean.”

— David Lloyd, CEO and Founder of

FREDsense Technologies

How safe is the water you drink? There are many

factors that can negatively impact water quality: aging

infrastructures, drought, declining levels of groundwater,

contaminants from agriculture, manufacturing and mining

runoff, just to name a few. FREDsense Technologies, a

startup using electrochemistry and synthetic biology to

detect dangerous levels of iron, arsenic, and manganese

in water, is here to change that.

According to David Lloyd, CEO and Founder of FREDsense Technologies, “There are so many problems with the water industry because it’s been underinvested in for years, and as a result slow to incorporate new methods and technologies. In the next 20 years, we are only going to see more water issues. Flint, Michigan is not going to be an isolated incident. We need better tools and technologies.”

A cleantech company, FREDsense (FRED stands for Field Ready Electrochemical Detector) was founded in 2014 by six University of Calgary students, including David Lloyd and Emily Hicks, who while at university were recognized in the 2013 International Genetically Engineered Machines (iGEM) competition for their use of bacteria to sense and measure different chemical compounds. Their solution originally received funding from the Oil Sands Leadership Initiative in Alberta, Canada, which was looking for disruptive technology solutions to change how people think about the oil and gas industry. Their technology was initially seen as a solution for managing tailings ponds, which are massive lakes of contaminants that result from washing bitumen out of the rocks during oil and gas extraction—a problem from traditional and fracking methods that is common to Northern Alberta and other areas of the world.

“There are government mandates requiring these lands be cleaned up,” said Lloyd, “and so we founded the company as an environmental remediation solution, helping those who need to come in and treat water or different waste effluents to provide safeguarded means of ensuring that our environmental and drinking water supplies remain clean.”

When the oil market crashed in 2014, FREDsense pivoted its business strategy and found traction with municipal water utilities. “Essentially, what we do is genetically engineer bacteria to turn them into sensors for measuring specific contaminants in water,” said Emily Hicks, President of FREDsense. “Our techniques tune the bacteria to get them to detect

something specific like lead or arsenic, and they respond by producing an electrochemical signal that we can easily measure and quantitate using off-the-shelf hardware.”

Prior to FREDsense’s breakthrough biosensors, the industry used chemical tests which needed to be analyzed in a lab. The old process could be inaccurate and difficult to use, more costly, and time-consuming. “Bacteria are cheap to produce and the process makes the tests easier and more accurate,” explained Hicks. “As biology advances, we’re able to come up with new ways of creating sensors so that we can broaden what we can accomplish with the types of sensors we can build.”

“A lot of the technologies and techniques still

adopted today were written into state or federal

standards more than 50 years ago.”

— David Lloyd

The Use Cases for Bacterial Sensors

There are three use cases for the FREDsense solution. The first is for water utilities and drinking water supply companies, primarily in the U.S. Utilities need to better monitor their treatment infrastructure and understand how well they are cleaning their water before it hits the tap.

“The challenge,” said Lloyd, “is that water is a highly regulated industry and very slow-moving. A lot of the technologies and techniques still adopted today were written into state or federal standards more than 50 years ago. As with disruptive technologies such as ours, it can be quite difficult to change the minds of the regulator. We’ve had to first demonstrate equivalency of our technology to existing methods and then show the benefit of seeing results immediately from those monitoring the situation in the field.” FREDsense tech is currently in use with utilities serving cities in Arizona and California.

The second use case is for industrial processes. Gold mines use arsenic to treat rock that contains gold, producing a lot of tailings that need monitoring. FREDsense is currently in a pilot with the Canadian Mining Innovation Council in Quebec.

The third application applies to mine closings and efforts to remediate the affected land. This application is used at sites across Canada and the U.S. to continuously monitor levels of contaminants. The Canadian federal government requires this information rapidly, making the FREDsense field kit a better option than lab analysis.

Hicks wrote an application for the arsenic field kit challenge hosted by the EPA Bureau of Reclamation and Xylem, a large water company. The application was selected as one of five new technologies recognized by the regulator. “The EPA has not validated very many field-sensing technologies across the board,” said Lloyd, “so this is a really important move for us. Regulators are now actively looking toward new technologies that are easily deployed and meet a number of different applications.”

The EPA funded the five arsenic field kit solutions with $50,000. And in making the award cited FREDsense for its use of bacteria to electrochemically detect and speciate arsenic using a highly portable, easy-to-use kit that requires no special training. Bureau of Reclamation Commissioner Brenda Burman said, “There remains a need for rapid, low-cost monitoring of arsenic. These ideas are a positive step forward to better understand and manage water quality, potentially opening up more usable supplies for the West and the rest of the country.”

“Regulators are now actively looking toward

new technologies that are easily deployed and

meet a number of different applications.”

— David Lloyd

FREDsense Joins SU’s First Startup Accelerator

When Lloyd and Hicks participated in the iGEM competition while still at university, they met other participants who were affiliated with Singularity University (SU) and learned how SU helps startups develop and scale their moonshot ideas into successful businesses. So when Mikhail Holst of SU, reached out to the co-founders in 2015 to see if they’d be interested in applying for SU’s first Startup Accelerator, they jumped at the chance.

Since receiving the iGEM award in 2013, the co-founders continued to receive recognition, winning the Queen’s Entrepreneurship Competition, the Nicol Competition, the Impact Calgary Tech Showcase, and the People’s Choice Award Tech Showcase, to name a few. With their prize monies, the FREDsense team built a lab but hadn’t yet founded their company or participated in an accelerator to grow their startup.

“Part of my objective at SU was to identify the

five primary applications for our technology, as

well as how to identify the buyer and build out

a value proposition.”

— David Lloyd

Over 450 applications were received for SU’s Accelerator, and the FREDsense team was one of seven startups chosen to participate. At the time, the SU Accelerator was a three-month experience with startup founders living on SU’s campus in Silicon Valley. Each week included three days of programming focused on a different element of the business—business model design, market validation, sales and marketing, VC pitching, financing, and more.

“Part of my objective at SU was to identify the five primary applications for our technology, as well as how to identify the buyer and build out a value proposition,” said Lloyd. “Since we were establishing our business, we wanted to build a lean approach to be able to validate the markets. A lot of the support we got through the programming at

SU really helped us understand how to do that, and supported our development as we made those difficult decisions about who are we going to be.”

“We saw we had a solution that was looking

for a problem and we knew we really needed

to pivot.”

— David Lloyd

“The SU Accelerator was the perfect time for us as an organization and as a team to come together and get the right mentorship to make those decisions in a validated, information-based way,” added Lloyd. “From my perspective, it was a transformational point in our business. Up until the Accelerator, we’d been in the oil and gas industry, which at the time was going through a slump. At SU, we understood we were not going to be able to scale facing these significant economic barriers. We saw we had a solution that was looking for a problem and we knew we really needed to pivot.”

At SU’s Accelerator, the founders validated the real market opportunity for FREDsense and moved to primarily testing and tracking contaminants in water. “This was really a big part of what SU was able to give us,” said Lloyd.

Lloyd and Hicks secured their first client following advice they gained at SU about recognizing new opportunities. According to Lloyd, “One of the best pieces of advice that we got from the SU Accelerator, as we were trying to vali-date our assumptions, was a recommendation to put a ‘Pi-lot Now’ button on our website and to be open and targeted in the messaging we’re sending out and the value proposi-tions that we think are important. When we did that, this water utility clicked the button and said they had an arsenic problem. They weren’t from the SU community, but it was through that great advice and mentorship that we were able to get that first connection that led into the industry we are now serving.”

“As a disruptive technology inside a conserva-

tive market, we’ve had to look for very non-

traditional ways of financing our business and

moving it forward.”

— Emily Hicks, President of FREDsense Technologies

Lessons Learned - Building a Successful Impact Startup

At SU, FREDsense learned that buyers of their technology could have different titles depending on their industry. In general, though, they were all people who were in charge of water quality who needed information and data to make process decisions within larger systems. FREDsense learned their technology drives value by helping field service managers, water quality operators, and process engineers get their data faster and more reliably than they could before.

In addition to helping Lloyd and Hicks understand the real need for their solution, the SU Accelerator also introduced them to SU’s global network of experts. Their assigned mentor, Raymond McCauley, has been a long-time supporter of the two founders and still helps them make the connections they need in the biotech world.

SU provided FREDsense $100,000, their first equity funding, as part of their participation in the Accelerator. “Before SU, we didn’t have a lot of funding,” said Hicks. “We’d done contests, won awards, and earned some prize money, but hadn’t raised any investment dollars, so we’d been operating from grants and pitch competitions. SU helped us learn how to pitch investors effectively—particularly investors for water who find the industry can be too slow to show returns.”

Since its first investment by SU in 2015, FREDsense has closed over a $1 million. “As a disruptive technology inside a conservative market, we’ve had to look for very non- traditional ways of financing our business and moving it forward. SU helped us to devise that investment strategy,” concluded Hicks.

Extending Reach Through the SU Network

Now, as an SU portfolio company, Lloyd and Hicks continue to receive guidance from their mentor, connect with SU alumni, and participate in SU programs. In 2016, they participated in the SU Global Summit, an annual event in San Francisco that attracts 1,500+ people from around the world to share and discuss advances in exponential technologies. These technologies, including artificial intelligence, digital biology, nanotechnology, quantum computing, robotics, virtual reality, and machine learning, among others, are being used to solve the world’s greatest challenges.

During the Global Summit, SU’s Global Grand Challenge Awards were handed out in each of the 12 categories (food, water, shelter, environment, disaster recovery, health, learning, security, space, prosperity, energy, and governance). At the event, three startups selected for each category presented their solutions to a panel of judges. In 2016, FREDsense won this award in the water category.

In 2017, McCauley asked the FREDsense co-founders to speak before 1,500 manufacturing executives at SU’s Exponential Manufacturing Summit in Boston as an example of the success of exponential biotech solutions.

What Building a Successful Impact Startup Means to Me

By David Lloyd, CEO and Founder of FREDsense Technologies

“I absolutely want to continue doing the work I’m doing. For me, being an entrepreneur is everything from the lifestyle and the fantastic people to the challenge of the day-to-day struggles. And, we get to be involved with the constant changes of the technology and the market need. But most of all, I want to do it because of the impact we can have.

I’ve always come from a background of wanting to make a difference. As an undergrad, I thought I wanted to be a medical doctor, but after I shadowed an actual doctor, I realized that this was something I was never going to want to do. But as I got involved in genetic engineering and synthetic biology, it amazed me that we’re technologically at a place where we could build something biological that could impact people. Getting involved at iGEM and actually being hands-on building something to make people’s lives better was exactly what I wanted to do.

I have a focus in two areas. One is on the importance of water and how to encourage companies and investors to look at water quality more urgently. The second is how genetic engineering and synthetic biology will revolutionize how we think about how to impact water.

I was recently part of a Canadian trade mission invited to Los Angeles to tour a water facility supporting Orange County at one of the largest groundwater recharge projects in the world. FREDsense was selected as a technology that could solve a problem they are having around water quality monitoring, so we went there to look at their infrastructure. As a company, we are often asked to help anywhere there is a limitation on water. The world is using groundwater so extensively that in some areas the ground has actually shrunk down anywhere from 10-15 feet because of water displacement. Los Angeles is looking at how to make waste water potable so it can be added back to groundwater aquifers. Water is a limited resource and if we don’t learn to manage it and its quality effectively, we’re going to run into some major issues in the next 50 years.

Our goal as a company was and is to have 10x impact. We’re the first water quality instrument that can scale across industries and chemicals to have that impact and to meet that mission. And biology is what allows us to do that in ways that other systems just can’t.

Measuring the impact we have today is not simple, mainly because we’ve first had to prove to regulators our field kit provided data every bit as good as more costly and time-consuming lab analyses.

“We believe that everyone

deserves to know what’s in their

water so that they’re empowered

to do something about it. That’s

what drives us as a company...”

Now we’re being included in discussions about the right benchmarks to use in tests. We expect to see common metrics in terms of impact on the amount of water that can be treated, the toxicity of the tailings that can be detected, the number of data points that can be measured, and the acres of land we can reclaim. As we become a trusted source, we expect to impact the discussions taking place at the nexus of treatment and monitoring by providing information more rapidly.

We started in North America out of necessity because there are local markets we can service faster than global ones. But we see opportunity to support everyone, everywhere. Bangladesh and India have pervasive arsenic issues, for instance. Once we get our technology to a place where we can create a seamless experience for everyone at an affordable cost, we’ll be able to scale its availability and have a global impact.

The great thing about FREDsense is we drive impact every time we get our technology into the market and help someone with one of their challenges. It’s not just a revenue metric for us but an impact metric. It’s satisfying to be aligned in that, to know that what we’re doing isn’t only about using cutting-edge technology to make a difference, but also doing something real that’s never been done before. We’re making a difference in

the world and helping people understand something so basic and important that we take for granted every day in most parts of the world.

At FREDsense, we like to say that we help people understand what’s in their water. It may look clean and clear, but how do you know there isn’t something toxic in it? That’s where we can help. We believe that everyone deserves to know what’s in their water so that they’re empowered to do something about it. That’s what drives us as a company—creating a cost- effective and incredibly simple-to-use solution that allows anyone to know that their water is safe to drink. Right now we’ve created an industrial tester, but in the future everyone will have it at home for their own peace of mind.

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Singularity University (SU) is a global learning and innovation community using exponential technologies to tackle the world’s biggest challenges and build an abundant future for all. SU’s collaborative platform empowers individuals and organizations across the globe to learn, connect, and innovate breakthrough solutions using accelerating technologies like artificial intelligence, robotics, and digital biology. A certified benefit corporation headquartered at NASA Research Park in Silicon Valley, SU was founded in 2008 by renowned innovators Ray Kurzweil and Dr. Peter H. Diamandis with program funding from leading organizations including Google, Deloitte, and UNICEF. To learn more, visit SU.org, read the SU Blog, join us on Facebook, follow us on Twitter @SingularityU, and download the SU App.

SU PROGRAMS

SU Ventures Accelerator 2015

SU Global Summit 2016

SU Global Grand Challenge Award Winner 2016 (for Water)

Exponential Manufacturing 2017

EXPONENTIAL TECHNOLOGIES

Synthetic Biology

Genetic Engineering

Biosensors

Electrochemistry

TRANSFORMATIVE PRACTICES

Entrepreneurship

Exponential Leadership

GLOBAL GRAND CHALLENGE

Environment

Water

SU and FREDsense Technologies At-a-Glance