Iitti-based Lekatech received EUR 6 million in EU funding for commercialising an electric breaker


For operating businesses Internationalisation For small businesses 2.3.2022

In the picture above are the founder of the company Tuomo Peltola and the CEO Antti Anttila.

Tuomo Peltola, founder of the Iitti-based company Lekatech, came up with a new version of the traditional breaker. Among those who believe in its potential is the European Union. The electric breaker is being developed and commercialised with EUR 6.3 million in EU funding, which feels like a safe amount. LADEC also provided support in applying for the funding.

-    The breaker is an old tool that has been used for decades. Breakers have traditionally been hydraulic, but this is no longer an optimal solution due to the electrification of heavy machinery. An electric breaker offers enormous energy savings. It also has a better performance than a traditional hydraulic breaker, says Tuomo Peltola, Lekatech’s founder and the man who brainstormed the electric breaker.

The improvement of energy efficiency and the electrification of the drive significantly reduce the emissions generated by the use of breakers. According to Lekatech’s calculations, an electric breaker saves up to 60 per cent in energy. It can be used in work such as the demolition of concrete buildings, breaking rocks in mining operations, and building pile foundations.

-    When a diesel-powered machine is no longer needed, the CO emissions also drop to zero, Peltola continues.

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Lekatech's electric breaker is used for example for the demolition work of concrete buildings, breaking stones in mining and the piling of foundations. It is even 60 percent more efficient than hydraulic breaker.

A crisis gave rise to an idea

The development of the electric breaker started at Iitin Kymppikoneistus in 2016 – partly dictated by the circumstances.

-    The market changed due to an economic crisis. The mass production of parts was relocated from the local machine shop to countries with lower production costs. With this loss of work, we started thinking about our own product. The market forced us to brainstorm a new product, as otherwise we would have gone bankrupt or continued to scrape by, Tuomo Peltola reckons.

The company had been in operation for more than 40 years and, at best, had 25 employees, all of whom were let go. The development of the new product started from a clean slate.

-    At first, we developed the product with our own funds and the small amount of funding we received from the Centre for Economic Development, Transport and the Environment. However, it pretty soon became clear that designing and developing a product and seeking funding is a full-time job that takes more than one person’s resources.

Peltola knew Antti Anttila from before, as Anttila’s employer had once been the largest customer of Iitin Kymppikoneistus.

-    Antti was a meticulous economist and drove hard bargains. I figured that he would be the perfect fit for us, Peltola laughs.

Public funding

Since 2018, Lekatech’s CEO Antti Anttila has ensured that the company receives the funding it needs to develop its product.

-    We have sought public funding and received a pretty good amount. When you include the latest amount, EUR 6.3 million from the EU, we have received a total of EUR 9 million in funding, Anttila calculates.

Anttila considers a consistent story to be the most important element in seeking funding. The company has sought and received funding for different phases of the product development project. In addition to a LADEC business consultant, he has also received assistance from a consultant who is familiar with the complex funding landscape and has recently become an employee of Lekatech.

-    We have not encountered actual setbacks on our journey, but our progress has been slower than anticipated. The EUR 6.3 million in EU funding is allocated to piloting and commercialising the breaker technology and developing our international business. We are going about these processes carefully, as the product’s potential market is huge, worth roughly EUR 1.5 billion, Anttila says.

Support for navigating red tape

Of the EUR 6.3 million in funding granted to Lekatech, some is a pure subsidy received from the EIC Accelerator, while part of it is equity investment guaranteed by the European Investment Bank.

-    This funding covers our funding needs for the next four years. It allows us to grow our operations and put the electric breaker on the market, Anttila says.

In addition to the EIC funding, the consortium led by Lekatech was also granted EUR 2.45 million in EIT RawMaterials Upscaling funding in the autumn. Of this amount, 70 percent is a subsidy. The consortium project’s only goal is to develop Lekatech’s technology and carry out piloting in the mining industry in particular. The other organisations in the consortium come from Poland, Greece and Spain.

Lekatech has also collected roughly EUR 1.3 million in funding from owners, private parties and public sources both in Finland and abroad.

According to Antti Anttila, LADEC’s support was important to Lekatech, particularly in the early stages.

-    Together with the business consultant, we identified various funding opportunities and investors and filled in numerous applications. We had applied for EIC Accelerator funding twice before, but now we finally received it. In 2021, there were a total of 4,000 companies that applied for the funding, and it was granted to four percent of the applicants. Everyone who applies for EU funding knows that receiving it is not a piece of cake, Anttila states.

He says that he is still in contact with LADEC almost on a weekly basis and works on developing the company with Mikko Kyle.

-    Mikko and I agreed that we would join the Lahti region’s Green Electrification of Mobility Cluster, which is coordinated by LADEC. It can open up new and interesting cooperation opportunities, Anttila reckons.

 

Script: Taru Schroderus
Images: Jani Wallenius, ProMedia Finland