“You have to be a little crazy to start from scratch”
Ten years ago, Steven De Laet identified a forgotten problem in the industry: the disposal and incineration of toxic waste water. Today, he is at the helm of Inopsys, a Mechelen-based company that uses mobile purification plants to clean contaminated water directly on site at chemical and pharmaceutical companies. This not only makes pollution manageable locally, but also recovers valuable raw materials such as zinc and palladium. What started as an innovative idea is growing into a European player with big ambitions. The acquisition by waste processor Indaver a year ago was a breakthrough moment for Inopsys. A conversation with founder and CEO Steven De Laet.
What does the acquisition by Indaver mean for Inopsys?
Steven De Laet: ‘It is recognition of the hard work and innovative solutions we have developed over the years. In an industry like ours, it is less easy to find growth capital than in IT or marketing, for example. In our industry, investments in hardware are significant, and that also determines the pace of growth and the ability to scale up. However, this slower pace also has an advantage. The competition is also developing slowly.’
‘For a start-up in sustainable chemistry, the large investment costs are not obvious because you end up in cycles of capital rounds that require a lot of time and energy. The acquisition of Indaver has brought us into calmer waters. We can map out our strategy better. If we present a good plan, we know that there is a willingness to invest. In the past, we had a rather fragmented shareholder structure, each with their own risk profile, which sometimes made it tediously difficult to make progress.’
What are the advantages of the acquisition?
Steven De Laet: ‘The fact that we now have a single shareholder who understands our market and customers and is also entrepreneurial gives our business a boost. Both Indaver and its owner Katoennatie are doing very well and have a well-developed vision of sustainability and circularity. There are other advantages too. If we have issues with insurance or legal matters, for example, we can call on expertise within the group. This means that things move a lot faster.’
How does Inopsys' business model work?
Steven De Laet: ‘We work with a five-phase model: design, build, finance, operate, maintain. We have to pre-finance the installations we build. The customer leases the installation which we operate on their site. That financing is the difficult part of our model. You get your money back, but it takes a while.’
What exactly does Inopsys offer?
Steven De Laet: ‘We say: give us your wastewater and tell us where we can connect it to our unit. We'll do the rest. The customer only pays for the volumes that are successfully treated. We design it. We install it. We operate it. We maintain it. We even do the analyses for the customer. That's it. In certain projects, we have even obtained REACH registration, because we turn waste into a raw material. This means we have become a producer and are therefore subject to European regulations.’
Out of the Valley of Death
Is Inopsys' work always customised?
Steven De Laet: ‘Yes and no. We now have our toolbox ready for the three areas we work on: PFAS, medicines and metals. We have the central solution and additional modules, which we sometimes add before or after, ready. But that took time. This will now enable us to start capitalising on what we have developed. We are out of the Valley of Death and turnover is rising. We had to work hard for a long time to develop the concepts, build them and test them. We are also active in markets, such as chemicals and pharmaceuticals, which are cautious and rather conservative. But we are now gaining momentum.’
How did the idea for Inopsys come about?
Steven De Laet: ‘The idea for what would later become Inopsys arose in the context of roundtable discussions between industry, government and knowledge institutions. This led to the creation of FISCH, the predecessor of Catalisti. Everyone was talking about Industry 4.0 at the time. We were discussing the modern factory of the future, with themes such as the Internet of Things, process intensification and decentralisation high on the agenda. At one point, Peter Van Broeck approached me about the idea of Plant-on-a-truck. He was referring to mobile chemical installations. I thought it was a fantastic metaphor, but what it meant exactly was not at all clear.’
‘I soon discovered that Bayer, where I had previously worked, was developing mobile chemical installations in Leverkusen, and that they had large budgets for this. After visiting their project, I realised that we couldn't try to compete with Bayer. That's how the idea arose to focus not on the core activities of chemical production but on the non-core activities: if we work on waste or by-products, the big players such as Bayer and BASF might allow us to do something, I thought.’
How did you start developing the technology?
Steven De Laet: ‘In the next step, I went to Janssen Farma with the idea of working on their waste streams. They gave me the required information about their waste streams. Then I started looking for technology we could work with. I came across ‘advanced oxidation’ and found a specialist in the Denayer campus of KULeuven in Prof. Raf Dewil. We started with some tests on Janssen's waste water. Ing. Kwinten Van Eyck worked on this with us — he eventually became the first employee of Inopsys. We agreed that if the tests proved successful, we would set up a company together.’
‘Together with KUL Leuven LRD, we started working on a business plan. I pitched the plan to essenscia's Innovation Circle with a positive response. The Innovation Circle gave rise to an Innovation Fund, which, together with KULeuven's seed capital fund Gemma Frisius, was the first to inject capital into our start-up. I had already left my jobs at VITO and FISCH. Once the money was in the account, Kwinten came on board immediately. So we started out as a team of two. A few months later, we had a contract with Janssen Farma. We then built a small factory from lab scale in a very short time. The upscaling went very quickly. From that application at Janssen, we were able to build up our reference case.’
Passing the baton
How did you integrate your technologies?
Steven De Laet: ‘Even though we started out with the idea of applying advanced oxidation, we didn't end up using that technology. We quickly realised that there are too many interesting technologies to focus on just one type. We wanted to build things ourselves, but also use other available solutions. That's how we gradually became a system integrator.’
‘We have also started to apply techniques that are not typically used in water treatment but come from the chemical and pharmaceutical industries. By combining techniques, we build unique but also complex installations that are robust. We do have patents, but we do not focus exclusively on the valorisation of them, as that would prevent us from offering stronger solutions. Often, the wastewater you have to work with is not pure water with a single component to remove. It is often a soup, and that influences the technology. By combining a number of things, we neutralise or exclude interference. We create a kind of relay team of three to four technologies that pass the baton. This has proven to be very efficient.’
You need the courage to get started. We had nothing in the beginning. Zero. You actually have to be a little crazy to do it. At Inopsys, we have always been realistically optimistic, but it's a marathon you're running.
What is a fair price for water treatment?
Steven De Laet: ‘Most large industrial companies have biological water treatment. This can clean 80% of the water. What we are working on is the other 20% of water that you really don't want to discharge, containing contraceptives or other medicines or PFAS, for example. Toxicity is, of course, also a subject of rapidly evolving regulations. In order to turn all water waste streams into drinking water, you have to compete with drinking water from the utility companies, and that's where the problem lies at the moment. Drinking water is actually too cheap. I know this is a sensitive issue in society, but water supplies are not infinite. If you make drinking water slightly more expensive, reuse will become more widespread. The water problem is closely linked to the climate. We are also experiencing longer periods of increasingly worrying drought in Flanders. All of this contributes to the desire to focus on water purification, but the economic situation in Europe, which is caught between a rock and a hard place, is putting the brakes on this today. With Inopsys, we want to build a sustainable and economically interesting story, so we have to wait for the right moment for some application to take hold.
What was it like to begin a start-up?
Steven De Laet: ‘As the founder of a start-up, you are on your own. That's incredibly educational. Take capital rounds, for example: during such a process, you're faced with one question after another. That forces you to think through your answers and communicate them clearly. That in itself is incredibly fascinating and educational. But as an entrepreneur, you mainly want to do business, and those regular, intensive capital rounds do become a burden.’
‘You need the courage to get started. We had nothing in the beginning. Zero. You actually have to be a little crazy to do it. At Inopsys, we have always been realistically optimistic, but it's a marathon you're running.’