How EY managed the innovation subsidy of the start-up Zero Friction

5 minute read 19 Jun 2020
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EY Belgium

Multidisciplinary professional services organization

5 minute read 19 Jun 2020

An interesting innovative product or service may qualify for a subsidy from the Agency for Innovation and Entrepreneurship (Agentschap voor Innoveren en Ondernemen or VLAIO). But sufficient attention must be paid to drawing up a strong subsidy application as it requires detailed knowledge of the evaluation criteria. 

Zero Friction is working on a software solution to make invoicing in the energy sector more dynamic, taking into account the increasingly numerous options inherent in the energy transition. They successfully applied for an innovation subsidy with the help of EY. But how does such a collaboration work in practice? Where are the pitfalls and how does EY make the difference? A conversation between the 'sparring partners' Jabran Bhatti (EY) and Wim Jacobs, CEO of Zero Friction.

As an introduction could you briefly present Zero Friction?

Wim Jacobs: “Together with Lars van Elewijck and Yoni Nijs, we started in 2018, so I think that we can still be labeled a start-up (laughs). We combine experience in both the software and the energy sector and capitalized on it to identify a gap in the market. We live in an age of an energy transition that is still in its infancy. More and more solutions are starting to interact with each other. However, we realized that there was no good invoicing solution that could meet these developments. In fact, this is still often done in a static way: the end customer pays advances and receives a final settlement once a year, which always comes as a surprise. This frustration is apparent in the market, but it can be avoided. With our software, we want to make the invoicing in the energy sector into a dynamic process. It must be possible to predict, inform and advise on more efficient consumption. This allows us to better support the heating suppliers and building managers who make up our customers.”

How did you come into contact with EY?

Jabran Bhatti: “The first contact was through my colleague, Liesbeth Peters. We soon realized that the people at Zero Friction were full of ideas, but moreover that they possessed an important innovative component. It is often no easy task for a young enterprise to finance an innovation. Fortunately, the Flemish government provides a number of instruments that can help, such as an innovation subsidy. To qualify, you must devote sufficient time as a company to drawing up and defending a well-founded dossier. And it is precisely here that we played a role in completing this process.”

Wim Jacobs: “The collaboration proceeded in a very interactive way. We had no shortage of ideas (smiles). We know where we are and where we want to go but crossing the gap in between is another matter. Drawing up this kind of innovation dossier requires expertise in itself and it has to be said that the VLAIO, the Agency for Innovation and Entrepreneurship, which decides on this subsidy, told us that we had a strong dossier – a compliment for Jabran and the other people who worked on it.”

Jabran Bhatti: “We strive to use our in-house expertise to serve the client as well as possible. It is no coincidence that the first thing we do is to put together a team tailored to the specific requirements of the customer involved. We have in-house technical profiles, such as computer scientists, experts in electrical engineering, life science, mechanics or chemical experts and economic profiles. EY’s strength is precisely that we have these colleagues with diverse backgrounds who speak the client’s language.” 

We strive to use our in-house expertise to serve the client as well as possible.
Jabran Bhatti
EY Belgium Consulting Manager

What does the process for such an application entail?

Jabran Bhatti: “Of course, the process is broader than preparing the dossier that Wim mentioned. Ultimately, it is the fruit of a lot of reflective work. Insofar as possible we at EY tried to play the role of sparring partner, while Wim was clearly in the driving seat. The evaluation goes beyond merely analyzing the dossier.”

Wim Jacobs: “This is about more than just a good idea, there must also be a demonstrable added value. For instance, what can we expect in terms of employment? Does it provide additional knowledge? These are pertinent questions they ask and the answers must be demonstrable. After submitting the dossier, advisors visited with additional questions. Internal approval followed soon after, which is something that often requires external experts, but in our case this was unnecessary.”

How is the subsidy paid out?

Wim Jacobs: “That depends on the case. In our case it was awarded in a single amount, but the payment is made in a few installments. There are clear conditions attached to this. For instance, we were obliged to co-finance the sums paid; this is not simply money you can use freely. Each installment paid is subject to reporting conditions and potentially other requirements.”

What were the greatest difficulties you experienced during this process?

Wim Jacobs: “At the beginning everything went smoothly, but then you reach a point when you have to consider what exactly you still need in order to complete the dossier. What elements still need to be applied? In what form should this be done? But that is precisely what Jabran does best. Yoni and I personally found the correct formulation of the technical aspects the greatest challenge. You have to look into the future, but you are also confronted with numerous variables.”

Jabran Bhatti: “There is always uncertainty in every innovation. The duration of this project is 18 months, which means that you have to think a long way in advance when submitting the application. In fact, difficulties concerning technical formulations are a staple in these kinds of cases.” 

I personally found the correct formulation of the technical aspects the greatest challenge
Wim Jacobs
CEO Zero Friction

How do you see the future of Zero Friction?

Wim Jacobs: “Actually, our ambitions extend across two areas. This project is ongoing, we call that our ‘short term’. In addition, we are also working on a ‘long term’. We believe that there is more than just informing the customer and the end user, there is also the potential for smart devices, automation, and control. At the same time, we are looking across borders. Today Belgium and the Netherlands are our home market, but from 2021 we want to grow into a European player.”

Jabran Bhatti: “I have no doubt that this is not the last innovation journey for Zero Friction (laughs) and I am looking forward to supporting the company further in its international expansion.”

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Summary

A strong product is not sufficient to obtain an innovation subsidy from the Flemish Agency for Innovation and Entrepreneurship Innovation (VLAIO). This must be supported by a strong dossier, the composition of which requires specific know-how. EY supported Zero Friction in this exercise. There was no lack of ideas at Zero Friction. The real added value in the collaboration was in the way in which this could be successfully channeled into this dossier.

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EY Belgium

Multidisciplinary professional services organization