UNB Spin Off Inversa Now Pursuing Oil & Gas Industry
December 19th, 2012
Fredericton-based Inversa Systems, whose technology can detect structural flaws through backscattered radiation techniques, intends to pursue a twin-track strategy in 2013 to pursue its two key markets – civil infrastructure and the offshore oil and gas industry.
The company wants to scale up sales in its civil business, which is mainly testing infrastructure like culverts (corrugated metal pipes) to make sure they are structurally sound. That business accounts for about 60 percent of Inversa’s revenues, but the greater growth may be found in the fledgling business of monitoring structures aboard offshore oil rigs. The company has now nailed down the product that will be used in that business.
“We like to say, ‘You nail it, then you scale it,’” said President John Bowles in an interview in his office on the campus at University of New Brunswick. “In 2013, we want to nail the oil and gas [product] while we scale the civil side.”
The Fredericton company sprang to life in 2005 from PhD research by founder and CEO Jake Arsenault, and got its initial push by winning a New Brunswick Innovation Foundation student entrepreneurship contest – a forerunner of the Breakthru competition. (The deadline to enter the 2013 Breakthru contest is Thursday.)
Arsenault and President John Bowles developed a diagnostic imaging system that probes a structure while in-service to detect whether there has been erosion, corrosion or any other defect. The system uses backscattered radiation, which is similar to an x-ray, except the beams reflect back from the subject rather than pass through it. That means the Inversa system can be used from the surface of massive objects.
Bowles said the reason for the latent growth in oil and gas is not so much that the company is pushing into this market, as that international petroleum companies have learned about the technology and are seeking out Inversa.
“What we find exciting is we work with some of the largest companies in the world, and each time we do they ask us to do more,” he said.
Offshore rigs feature massive insulated tanks and pipes, and regulators often demand that the structures be repaired immediately, meaning all work on the rig stops while the insulation is removed and the structure inspected and/or repaired. It can take days and cost millions of dollars in expenses and lost revenue. Inversa can inspect the tanks and pipes without removing the insulation, which means the petroleum company can discover problems without shutting down, and then schedule repairs for the rig’s regular downtime. It can save the company millions of dollars.
The expansion in the offshore oil and gas segment is leading to exciting opportunities, such as the development of a submersible product that could test assets hundreds of metres or even kilometres beneath the waterline. There are other applications as well: Inversa has already done work for the Department of National Defense, analysing the carbon-fibre honeycomb structure used in wings and tailfins of fighter planes and helicopters to ensure there’s no fluid in the material.
Bowles said that in the next three to five years the company plans to outsource the manufacturing of its scanning device so Inversa will be a software company, analyzing the data that partners send back after conducting the scans. It means it will be able to expand rapidly in terms of geography, but its intellectual property, which is all in the software, will remain with the company.
Inversa has formed a partnership with the international rig-servicing company EM&I/Stantec, and is considering other partnerships, including one to develop the subsea product. If the partners demand an upfront investment as part of the deal, the company may have to raise more capital. So far, it has been funded by angels, as well as NBIF, and the private Moncton venture capital fund Technology Venture Corporation. NBIF and TVC combined on a $500,000 investment in September 2011, which allowed Inversa to tap into a $2.1 million loan from the Atlantic Innovation Fund, announced by the Atlantic Canada Opportunities Agency earlier that year.