Direct-C Raises $3.9 Million in Series A Funding Round to Scale Oil Leak Detection Tech

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Direct-C Raises $3.9 Million in Series A Funding Round to Scale Oil Leak Detection Tech

Wed, 08/24/2022 - 10:49
Logo of Direct-C (© Direct-C)
Logo of Direct-C (© Direct-C)

Direct-C, an Alberta-based company with leak detection and monitoring, has been working with Henkel Adhesive Technologies since 2018 to assess whether its oil leak detection technology could be used alongside the German manufacturing giant’s repair wrap product.

Less than five years later, the start-up entered into a long-term commercial supply contract with Henkel to procure and resell its technology. Through its venture arm and GreenSky Capital, Henkel has jointly led Direct-C’s $3 million (3.9 million CAD) Series A round.

“Securing a partnership-slash-commercial agreement with a major corporation by a tech company is pretty tough. It’s a long road,” said Adrian Banica, Direct-C’s CEO and CTO, while expressing his excitement to have the German manufacturing giant on board.

Direct-C has used the capital it has raised to date to achieve product-market fit. With the fresh funding from Henkel, the start-up is ready to scale up and plans to use the new capital raised to support marketing and sales activities as part of its larger expansion plans beyond just oil and gas.

The Series A round was jointly led by Henkel Tech Venture and Toronto-based GreenSky and received some follow-up support from unnamed angel investors and employees. This all equity, which closed in early August, raises Direct-C’s total funding to about $7 million.

More Innovative Technology Required to Detect Very Small Leaks

Direct-C was founded in 2014 by Simon Park, a University of Calgary professor, and Kaushik Parmar, then a postdoctoral fellow at the university. The company developed software and sensor-based solution that monitors the inevitable oil and gas leaks.

While the energy sector has been using various technologies to detect leaks, Banica argues there is an inadequate technology for detecting “really small leaks.” Although small leaks may not cause significant loss, the leaks can be more consequential in environmentally-sensitive locations such as lakes.

Direct-C’s sensor tech uses a proprietary, polymer-based paint that can be used on surfaces such as bridges, buildings, pipelines, or engines that require large area measurements for strain, stress, and temperature. The tech can also be integrated into small area sensors.

The company focuses solely on oil and gas because it is based in Alberta, which has a large and strong energy sector. However, Banica feels Direct-C’s technology could be used beyond oil and gas to include the pharmaceutical processing industry to identify small, water-based leaks.

Banica claims that Direct-C’s sensor tech can be used in broader and unique ways than hard sensors because the sensors are coating-based.

Although Henken has previously supported large Canadian firms, backing up Direct-C is the first time the firm is investing in a Canadian start-up. According to Paolo Bavaj, Henken Adhesive Technologies’ corporate venturing head, there is great potential in integrating Direct-C’s sensor tech with Henkel’s maintenance, repair, and overhaul (MRO) solution portfolio.

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