April 15, 2020

Direct-C advances nano-coating sensing technology

  • This is the second in a series of five articles.

    Showcasing how the EBA program and other Alberta Innovates services are helping different Alberta companies in their journey.

A photo of Kaushik Parmar from Direct-C in the lab
Kaushik Parmar, company cofounder in the lab

Leaks remain the biggest risk to Canada’s pipelines, despite this infrastructure being the safest means of carrying oil and natural gas. These incidents can significantly impact communities and the environment — not to mention an operator’s reputation. So, constantly improving pipeline safety through advanced leak detection technology remains essential. That’s where Direct-C believes its nano-coating sensing technology can make an important contribution, backed with help from Alberta Innovates.

Using the latest nano-particle science, the Edmonton-based startup has created a breakthrough coating designed to improve the way even small leaks of hydrocarbons are detected. This sensing technology is the result of a decade of research by Simon Park and Kaushik Parmar at the University of Calgary’s Schulich School of Engineering.

Nano-coating sensing technology

A photo of Kaushik Parmar, Direct-C's co-founder & VP of Research and Development
Kaushik Parmar, Direct-C’s co-founder & VP of Research and Development

In 2010, a series of oil spill events were in the news. A recognized expert in nano-engineering, Park teamed up with Parmar, then a doctoral student, to see if they could apply nano-particles to improve leak detection and prevent similar incidents.

By experimenting in the university lab, they realized it was possible to develop a nano-composite coating, a mixture of polymers with nano-particles that was sensitive to hydrocarbons. As the coating came into contact with hydrocarbons, it gave off an electrical response that could be instantly measured to detect even small leaks.

They had their concept. To carry it forward, they pitched their idea in 2013 to Innovate Calgary, the university’s innovation hub. A year later in 2014, with Innovate Calgary’s assistance, they formed a spin-off company, Direct-C, to start commercialization.

Funding early in the innovation curve

Helping the team on their way was a $450,000 grant Park received from a precursor of Alberta Innovates as iCORE Strategic Chair in Sensing and Monitoring.

“Our aim was to support their work early in the innovation curve,” says Marlene Huerta, an Alberta Innovates post-secondary principal business advisor overseeing investments in nanotechnology research.

With the funding, Park and Parmar purchased the necessary instruments and assembled their team of researchers, and set to work.

“We spent more than two years in the discovery phase, testing the sensor technology at various conditions and perfecting the recipe,” Park says.

“We were determining the feasibility of the coating: Could we put it underground, underwater or under extreme pressure? Would it be robust enough for a pipeline environment?” Parmar adds.

Their work would lead to a proprietary nano-composite sensing coating. The paint-like material could be combined with sensors and applied to any surface to provide operators with instant notifications of a potential release or structural stress.

First product launched

As the technology took shape, so did Direct-C. In 2016, Michael Kerr, Alberta Innovates’ technology developer adviser (TDA), together with federal funding agencies, worked closely with the team to advise them on development of their business model. With voucher funding and a commercialization associate grant through Alberta Innovates, the company built its systems, including initial development and testing of prototypes. The team also brought on Adrian Banica, an experienced entrepreneur, as CEO in 2016.

“The ultimate key to success was having a solid foundation of company personnel, levering off technical and business supports from advice to program funding focused on market pull. The coordination of the various federal and provincial supports ensured Direct-C attained the right advice and support at the right time in a collaborative ecosystem,” Kerr says.

Two years later in 2018, Direct-C launched its first product, SubSense Mobile, a stand-alone nano-composite probe unit to allow clients to monitor areas of concern.

“We’re targeting this product to help industry detect very small leaks in high-risk locations,” says Parmar, now Direct-C’s vice president of R&D.

Today the company has secured its first customer installations with Suncor Energy and U.S.-based Goodnight Midstream. It’s also has partnerships with European multinationals Henkel and Airbus to explore further product applications.

Positioning for success

To prepare for growth, in early 2020 Direct-C raised $2.2 million in equity and non-dilutive financing. Here again, the company received help from Alberta Innovates, this time through the Executive Business Advisor (EBA) program, which provides executive-level advice to up and coming small- and medium-sized enterprises in the province. Juan Benitez, a former Alberta Innovates EBA and now venture partner at BDC Venture Capital, worked with Direct-C to review deal structures and expand its investor network.

For Park and Parmar, this story of ongoing support has positioned Direct-C for a strong future.

“Alberta Innovates has been instrumental. I truly believe this support is what has made Direct-C possible,” says Park, who continues his nano-engineering research at the university and stays involved as a Direct-C board member.

Adds Parmar: “Alberta Innovates has been able to help us significantly at every stage of the way.”

Read part one of our five-part series on how Alberta Innovates helps Alberta companies bridge the gap to growth and success: Helping companies grow and succeed