EMBIO Diagnostics acquires clean-tech AG Catalytic Solutions

EMBIO Diagnostics, known for its innovative air quality monitoring system (AirBELD) and portable chemical analyser (BELD), has acquired AG Catalytic Solutions, which has developed a patented, eco-friendly, plug-and-play catalytic technology for ballast water treatment.

While this move might seem tangential at first glance, EMBIO’s Founder and CEO Constantinos Loizou sees it as a natural progression. "What we did with our own products, starting from one point and pivoting to get a foothold in the market, we can do with another," he says.

Supply, meet demand

Market demand for carbon-reducing technologies is expected to grow significantly, as investors become increasingly partial to startups with a positive environmental impact, with Central Banks steering the banking sector toward sustainable lending practices and ESG reporting for public companies as a regulatory condition. In this milieu, AG Catalytic Solutions' low-power devise, Loizou says, presents a unique and valuable addition to EMBIO’s product suite. He also confirms that it will complement EMBIO's existing joint venture with Aquarex International, which offers integrating diagnostic and monitoring devices onboard ships. "So, we are looking to add AG Catalytic Solutions in our sustainability portfolio and to offer the solution in a way that will allow companies to reduce their CO2 footprint, either as a treatment for both fresh and ballast water or some alternative things we are developing on the back-end of our R&D," he notes.

Scaling up

While reticent about disclosing the size of the deal, Loizou highlights that the acquisition signals EMBIO's transition from a startup to a scaleup. The company's performance in the first half of 2024, matching the sales figures of the entire previous year, also underscores this growth trajectory. Interestingly, EMBIO's products – BELD and AirBELD – generate equal revenue, indicating a balanced market acceptance and growth potential. Loizou shares that the scaleup now sells across Africa, Europe, Japan and Korea, while testing pilots in the Middle East and plans to install AirBELD in hospitals in Italy and Hungary.

Where’s the exit?

“We need to find ways to commercialise what we are producing in the initial research level and IP stage,” argues EMBIO’s CEO, reflecting on how startup-on-startup acquisitions can be a growth driver in the local scene where exit opportunities, particularly for those commercialising academic research, are scarce. "Offering a scientist the opportunity to get something back for the years invested in developing a technology is extremely important for a healthy ecosystem," he stresses.

Compounding the issue is the lack of market validation and corporate adoption of Cyprus-made technologies – without market validation, founders cannot get the necessary feedback to adjust and pivot according to the demand, which stops, or even kills, the momentum going from lab to market. For Loizou, government mandates for corporate use, a tried-and-true practice in other ecosystems, can help change the situation. In Korea, he explains, besides grants, the government requires the big corporates to buy and use the resulting technologies. Meanwhile, he says, going into the market is a different game from being in the lab, requiring new terminologies and strategies that will consume researchers-turned-entrepreneurs even more. Indeed, it is not uncommon for founders, whether coming from academia or not, to feel like another Sisyphus when trying to market, rolling a boulder up and down the same unending hill. "So, when you cannot commercialise it, sell it to somebody who can. There is an opportunity with every technology, especially something built by bright minds – brighter than mine!” he notes. “Such deals provide an exit to future entrepreneurs who are part of the research community. It is a deal we are looking to promote and showcase everywhere."