Inspire sustainability with smarter water solutions

Bruce Croxon (00:02): Hi, and welcome back to the Export Impact Podcast, brought to you by Export Development Canada (EDC). I’m Bruce Croxon and I’m the host of this podcast. On today’s episode, we’re speaking with an inspiring entrepreneur who’s making waves in sustainability and water treatment innovation.

Amielle Lake is co-founder and chief commercial officer of CarbonNet, an advanced materials company dedicated to replacing harmful chemicals in wastewater treatment. With her extensive experience in entrepreneurship, including founding and selling a software company, Amielle has brought transformative leadership to CarbonNet, helping it disrupt entrenched industry practices while advancing sustainability goals. Today, she’ll share insights about CarbonNet’s journey, the challenges of scaling globally and the critical role that Export Development Canada has played in supporting the company’s growth. 

I’d like to begin today’s episode by acknowledging that we’re recording from my office in Toronto, which is on the traditional unceded territory of many nations, including the Missassaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, and the Wendat Peoples, and is now home to many diverse First Nations, Inuit and Metis. We value taking this moment to deepen the appreciation of our Indigenous communities—wherever we are—and to remind ourselves of our shared debt to Canada’s First Peoples.

Welcome to the podcast, Amielle. We’re delighted to have you with us today. I want to start by hearing a bit more about CarbonNet. I went on the website and was right on my face with how CarbonNet chemistry lowers capital expenditures (CapEx), operating expenses (OpEx) and emissions. As a fellow entrepreneur, that got me pretty excited to see that and the potential impact on the P&L (profit and loss). But how do you do that? Tell us how the company and the technology works.

Amielle Lake (01:44): Sure. Why don’t I start with the origin story of CarbonNet because I think that’ll give you some indication as to how exciting—we might be biased—but how exciting we think the technology is, and yes, how it does really lend a hand to transforming a pretty important industry, which is water. The story of CarbonNet: I’d sold my software company and I was at UBC, the University of British Columbia, which is something for Canadians to be very proud of because it’s a globally ranked institution. And like many of our universities in Canada, we have an incubator program. The one at UBC is called E at UBC. After I sold my company, I was invited by a fellow by the name of Barry Yates, who’s also the CEO of CarbonNet. I’ll share more about that in a second, to become an entrepreneur in residence. Effectively, that’s a role where you go and meet with wannabe entrepreneurs from the university, and you try and share all the mistakes you made in the hopes that they don’t make the same ones you did and effectively help them. 

It was during the time at UBC where I met Dr. Michael Carlson. He’s the inventor and one of my business partners and the CTO (chief technology officer) of CarbonNet. He’s a wonderful person and he made a discovery that we think has huge potential. So, let me tell you what happened. 

Mike was doing his PhD in biochemistry, and very specifically, he was working in the drug delivery arena. Drug delivery, when you’re looking at chemistry, involves tremendous precision. It was right around the time that he was doing this work that they started publishing the nefarious effects of using detergents to try and clean up offshore oil spills. Basically, what happened is when they’d apply detergents, or just think of it as a chemical to clean up offshore oil spills, it would break everything down into nano-sized particles and poison the aquatic life below. Mike was watching this go on, on the news, and he was yelling at the screen and he said, “I’m going to go back to the lab and crack the case.”

It’s a kind of a good news/bad news story. I’d say mostly good news. The bad news is we can’t treat an offshore open spill with the technology that Mike invented, but we can develop very effective, very cost-effective, very easy-to-apply green chemistries to wastewater treatment. The reason we’re able to do that is we’re able to design molecules and control them with tremendous precision. You sort of have to double back to the drug delivery world where we’re applying it to wastewater and it’s a sea change in how anyone’s ever thought about wastewater treatment. That’s why we’re able to do all those reductions.

Bruce Croxon (04:59):  That’s fascinating how some of the best ideas come out of happenstance and wasn’t really what you were targeting to do, but you’ve ended up there. I’ve noticed you do talk a lot on your LinkedIn and the different things you communicate about is the quality of water at large. You say we could unknowingly be drinking water that has been contaminated with all kinds of things, and we don't know about it. But how did you narrow down the wide spectrum of water quality? It’s absolutely a global issue and it’s a critical resource and Canada’s very well-versed to be leading the way in it, given how much of it we have. But how did you narrow from that wide spectrum down to treating wastewater? Because every idea requires focus, you can't boil the ocean. So, how did that journey happen and what made you focus in on that? And maybe talk a little bit about how easy— or hard—it is to target that specifically.

Amielle Lake (06:13): For sure. Focus is probably the most important word for an entrepreneur, as you know. If you don't focus, it’s very hard to succeed. 

Bruce Croxon (06:25): And you’re tackling a huge problem, right? It’s tempting not to be focused in a sense, right?

Amielle Lake (06:31): Oh, yeah. And the technology could do so much, so, that was the other challenge. It’s a platform technology where we can design these molecules to target so many different issues in wastewater. Obviously, the big question is where do you start and how do you build the business as quickly as possible? We did a lot of customer discovery and we looked at the potential of our chemistry, in terms of commercializing it quickly versus spending a lot of time in R&D—often, an issue that scientists, or deep tech companies, need to balance. We also looked at the pain and the buying behaviour of target customers, and obviously, marrying the potential of the technology and the openness and need of the market.

And we looked at municipalities. We looked at all kinds of things and we finally arrived at oil and gas. The reason is that in oil and gas and very specifically, hydraulic fracturing or fracking, they use a lot of water. Water is a crazy problem. It’s very expensive and they need a cost-effective and operationally efficient solution to treat that water, so they can recycle it. We basically went down to the Permian Basin (the highest-producing oilfield in the U.S.). I’ll give you the quick overview. Here’s a Canadian company. We went down to the Permian Basin, we took our chemistry, we tuned it to address the issues of treating produce water—the water that comes out of fracking—and we were able to take over the market for the chemistries that we compete against for produce water reuse within 18 months. We’re the largest provider. Our class of chemistries is flocculent and coagulants. I won’t get too technical, but we’re the largest supplier of those chemistries in the Permian Basin, which is effectively the largest operating oilfield in the world.

Bruce Croxon (08:45): So, you went right for the megahit, right out of the gate? As a Canadian entrepreneur, I’m used to dealing with an ecosystem that starts with the Canadian market, gets some product market fit, gets some success, gets funded up, turns their eye to international markets second in Phase 2 or 3. Obviously, we’re looking to back global companies, but it sounds like you guys went right for the motherlode. Was there anything behind you, a small Canadian startup, saying, “You know what, let’s jump off right away and go after the U.S. market.” Was it simply a matter of that’s where the biggest opportunity was, or were there other circumstances that led you there?

Amielle Lake (09:38): It’s a great question. 1. It came down to blood-spurting pain and 2. We had a network where we were able to go after the “motherlode. We’d spent time talking to Canadian oil and gas CEOs, and fracking is in smaller volumes and the treatment of fracking water is even smaller. So yes, we could have done proof of concepts there, but the appetite and the blood-spurting pain, like that tourniquet for blood shooting out of your neck, the business problem we all want to try and solve, doesn't matter. The market was really evident to us in the Permian after we went down and spent quite a bit of time talking to operators. And there’s this class of companies that treat the water called midstream. I’d love to share with you a funny story of how we got started in Texas.

Bruce Croxon (10:36): Please do.

Amielle Lake (10:38): We basically formulated the first version of our product in a wooden box and that’s because we didn’t have a fume hood—we do now. And we had about 500 mLs of this stuff and we bought plane tickets and we flew down to Houston. Through connections, we were able to meet with this individual who's wonderful: Our SVP of field operations, Jack Ledford. We were able to meet with him. Now, he has a lot of experience in the oilfield. He’s also a former Top Gun instructor. So, of course, you can imagine, just as a sidebar, when a Top Gun came out, we made a big deal about it. 

Bruce Croxon (11:26): Maybe a little bit of Type A mixed into his personality?

Amielle Lake (11:29): Very mission-driven. So, spoke to him. We said, “Listen, we need some produce water to see if our magic stuff here works.” And he said, “OK, I’m going to get some and I’m going to meet you at my mother-in-law’s garage.” We thought, OK. You have to remember, we had 500 mLs in a suitcase. So, we met at his mother-in-law’s garage and we ran a quick test and we thought, this stuff really works. We knew we had something that was special. We knew we could do it cheaper than the competition. We knew we could solve a lot of their operational issues. So, first through the combination of customer discovery and then that magical moment, in a very hot garage=—this was in July, by the way, in Houston—we realized we had not just that market pain, but we had a solution that would address it. After that, it was go time.

Bruce Croxon (12:31): That aha moment where everyone’s, “We’ve got something here.” Would that have been six, seven years ago? Five years ago? Just sort of put us in that spot.

Amielle Lake (12:42): It was six years ago. Of course, we went through COVID-19 and anyways, lots of stories on that journey.

Bruce Croxon (12:50):  I’ve got to ask, as we’re recording this, we’re going head-to-head with our biggest trading partner around things, like tariffs and some of the environmental best practices that we took for granted under past administrations may be coming under threat. As we’re talking about fracking and our global desire to make fracking more environmentally friendly, are you concerned at all about any shifting tides with the current political environment?

Amielle Lake (13:39): There’s absolutely shifting tides. I think for CarbonNet, there are going to be some pretty exciting benefits, and then there are going to be challenges we have to work through. Yes, we’re impacted by tariffs, but the market opportunity, because of the desire to manufacture more, we’re in other markets beyond just oil and gas. We do food processing, construction, municipal work now, as well. That’s only going to grow the need to treat water, whether it’s south of the border, or in Canada. The U.S. is just a larger market. We’re a Canadian and a U.S. company. CarbonNet is going to definitely have some benefits, even some economic ones where we can out-compete and we’re going to also have to manage through the tariffs. We’re just working through what that looks like right now. And we don’t have a lot of clarity, but we’ve got some cautious optimism despite everything that’s happening right now.

Bruce Croxon (14:51): I was more sort of referring to the priority of the environment, depending on who’s running the show. You have to take comfort as you’re on this sort of mission while growing a business that it’s all lining up for the greater good. Who doesn’t want to address the wastewater issue? It’s one of those motherhood things. You’re no stranger, obviously, to growing outside your own border. EDC, you have partnered with along the way. How have they supported you? Can you give our listeners a view of some of the services that might be available to them that you’ve taken advantage of as you’ve leveraged this partnership to grow beyond the Canadian borders?

Amielle Lake (15:48): Absolutely. Could I just make one quick comment on wastewater and perhaps why that differs from a business environmental perspective?

Bruce Croxon:  Please. 

Amielle Lake: Something, like carbon emissions, because I think it’ll provide a lot of context for listeners. When we got into this space, we were shocked by the lethargy of the investment community because we think, and we see it, we’re out of water period, full stop. I mean, there are going to be states that no longer offer construction permits. You won’t be able to have an electric vehicle, much less have oil to run your car. Everything involves water and it’s a cost, so it’s becoming a boardroom issue.

Yes, the environment is critical, but society won’t function without water in its processes and we’ve got a solution that makes it cheaper and greener. We’re aligned. What I’m trying to say is we’re kind of aligned with no matter where, like if regulations change, it’s still a cheaper alternative for a manufacturer. They’re only going to manufacture more and there’s going to be a need to treat the water. So, we're quite excited about the water treatment industry as a whole. Certainly increased regulations will help, but even if nothing changes, or they even get lowered, they have to do it for economic reasons and just sheer requirements.

Bruce Croxon (17:25): Thanks for clarifying that. It’s almost like the environmental benefit that I was going on about is a secondary benefit that we’re not, you know, don't have this constant drain on the little remaining natural resource we have left.

Amielle Lake (17:39): I mean, it’s key. Yes, and we absolutely need to manage it.

Bruce Croxon (17:45): Well, thanks for that. Back to EDC.

Amielle Lake (17:48): Yes. EDC, we love. We’ve dealt with EDC across a few of their programs. Because we’re an exporter, they insure all our very precious accounts receivable, which is obviously key to building and managing a company, like ours. We’ve been part of some fabulous commercial connection programs that they have. They made some excellent introductions for us on the commercial front. I just would love for them to have more because they’ve been so valuable. And then we have also—although we’ve never inked a deal—we’ve talked to them quite a bit on the financing side and we’ve dealt obviously with a number of venture capitalists (VCs). We actually have very little VC capital in the company, but we did go through various exercises and exploring term shoots and all that. EDC was wonderfully aggressive. We really appreciated that they did everything they said they were going to do on timelines. I think it's probably just a when, not an if, we partner with other parts of their organization, particularly on the capital side.

Bruce Croxon (19:13): As a venture capitalist who’s in a number of companies with EDC, I echo what you’re saying. They’ve been exceptional partners on a number of ventures that I’ve been involved in. You’re speaking truth here. Hope you end up doing something together because they’ve really been supportive partners on the deals that we’ve been involved in. 

Amielle Lake (19:37): Yes, They are.

Bruce Croxon (19:38): What would you say are some of the key challenges you’ve faced in scaling the company and how have you addressed them? You didn't start out life as an entrepreneur, but you’ve had a lot of years of actually growing and scaling and selling. Are there ones that are unique to CarbonNet, some of the challenges you’ve facedm and maybe help our entrepreneur audience largely talking a little bit on how you would’ve addressed those challenges?

Amielle Lake (20:15): It's a great question, Bruce. The first one’s probably the more popular one for entrepreneurs, which is access to capital. We have capitalized the business and we’ve done it fairly successfully. But it’s been difficult. As I mentioned earlier, there’s been this kind of lethargy, or it’s not on trend, to look at water, although we think water’s going to be the biggest investment issue or opportunity in the next decade. Certainly finding investors and also creating a structure that makes sense for everyone—both the founders and ensuing rounds of investors—all of that was quite challenging. That’s thing. You can imagine, we went from 500 mLs in that wooden box to then we bought pots from Walmart and mixed the chemical ourselves, to now, we have, two facilities and we’re looking to add several more in the coming years.

Bruce Croxon (21:19): It’s capital intensive, I’ve got to assume?

Amielle Lake (21:23): It’s capital intensive.

Bruce Croxon (21:24): We’re not talking about two garages here and scaling by mixing with Walmart pots and plants. Like, this is real capital.

Amielle Lake (21:33): Yes, exactly. Exactly. The cash-to-cash cycles from raw materials to deploying with a customer, to having them pay you, to investing in scaling up for capacity, I mean, those are very tricky spots that we have to manage through. That’s definitely been our biggest issue.

The second one is access to—and it’s also a popular one for Canadians—is access to marketing and sales talent. Being a Canadian company and one in Vancouver, which as you can imagine is several flights away typically from the manufacturing centrer, whether it’s in the agricultural space, or large municipalities, or of course, the oilfield. We’re kind of this outpost. Of course, we’re building our teams in the locations that make sense and it’s challenging to find really good talent. That’s just something that Canadian entrepreneurs have largely always struggled with. It’s not to say there isn’t lots of talent, but it’s really just finding those people and making those connections and then of course, bringing them on your team.

Bruce Croxon (22:44): It’s really interesting as I hear you say that, I go back to the COVID-19 period when we sort of had this movement towards being able to work remotely and it didn’t really matter where the talent came from. I would imagine in what you do, that face-to-face and being in front of the customer and being on the ground is more important than some of the software companies you might have had exposure to in the past.

Amielle Lake (23:11): It is. The reason for that is trust and credibility. I mean, you can imagine when we first went down there, we were basically four Canadian bumpkins, as far as the West Texas oilfield was concerned. And we were saying, “Hey, we have something and please give us a try.” We had to do some pretty innovative things. Of course, we spent a lot of time developing relationships for them to give us a shot. And then you think about wastewater, you’re on site, you’re proving live in front of someone that you’re able to address their issues. So yes, face-to-face is critical.

Bruce Croxon (23:53): Amazing. Listen, just last question: You’ve advised a number of Canadian entrepreneurs in your career and I also notice, and feel free if you want to give a mention or a shoutout to Women's Equity Lab—fantastic organization from what I’ve heard and very supportive of entrepreneurship in Canada—but what advice would you have for Canadian entrepreneurs aiming to scale their business internationally who are looking to go outside of our borders?

Amielle Lake (24:28): Oh, absolutely. Thank you for the shoutout to the Women’s Equity Lab. Yes, I agree, it’s an important initiative. My advice for entrepreneurs is if you have something that you know solves a really important problem and it’s not just your opinion, you need the market to validate that, then I say double down and build the relationships you need to be able to get your product into the markets where it matters most. It’s a grind. We were kind of joking about hustling before we opened up the podcast. I think there’s sort of this mentality in Canada of play not to lose versus play to win. My advice to Canadian entrepreneurs is play to win. Go for it and use the resources you can and get out there.

Bruce Croxon (25:32): As I hear your story, it very much feels like that’s exactly what you guys are doing. I wish you the best luck in the world and with your intentions. Not only is it a great business, but it sounds like a very worthy business. And I want to thank you for sharing your story, the insights and the inspiring work happening at CarbonNet, Amielle. It’s been a pleasure having you on the show and learning from your experiences. It’s been very helpful.

Amielle Lake (26:09): Bruce, thank you so much. And again, a big thank you to EDC. I’m actually a fan of both, so I appreciate it.

Bruce Croxon (26:15): Thank you.