One of the most frequent questions I get asked when working with mining technology companies is “how do I access capital?” These tech firms have all the hallmarks of other tech companies. They employ highly skilled people, they use disruptive technology like artificial intelligence, and they engage in world-class applied R&D. Traditionally, industrial technology companies have not used third party investment as an instrument to raise capital as much as other sectors like digital technologies and life sciences. Lacking a universally compelling story, consumer facing products, and having typically longer returns on investments, industrial tech companies have long struggled to attract venture capital interest. This, however, is starting to change.
While not typically seen as a bastion of new ways of doing things, the mining sector is undeniably an industry that consumes innovative technologies. There is much written on this topic regularly by industry insiders profiling the latest solution that will save money or make mines safer or more profitable. Many of these mining technology companies were formed on the basis of solving a specific challenge for the mines, and many of them are bootstrapped and grow through typical means like personal investment, patient capital (friends and family), or traditional bank loans.
In my experience, mining technology companies usually do not raise capital the way other technology sectors do. Quite often, I have heard from angel investors and venture capital fund managers that the mining technology sales cycle is too long and therefore too risky to invest in. What has become increasingly clear is that there is a nascent mining technology investment landscape that is starting to take shape and much of this important work is happening right here in Canada.
From a cursory look at the investments that have been made in mining technologies, the types of deals can be divided into a few categories; industry specific corporate venture capital (VC), traditional venture capital funds with a focus on industrial technologies, and academic linked start-up programs.
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By Steve Gravel, Manager of the Centre for Smart Mining at Cambrian College
