It was founded nearly three decades ago, before the World Wide Web and the commercial launch of mobile phones, and only a few years after the creation of software titan Microsoft Corp.
Ballard Power Systems Inc. of Vancouver, British Columbia, is arguably the daddy of the fuel-cell industry, spurring excitement back in the late 1990s about a not-so-distant future of hydrogen-powered buses and cars powered by high-tech fuel cells. But by the turn of the century, much of the hype had been replaced by skepticism that the technical and economic challenges of getting fuel-cell cars on the road would take decades, not years, to overcome.
In stark contrast to Microsoft, Ballard has yet to generate a profit or commercialize the technology behind its international reputation. Still, its influence on the evolution of the fuel-cell market and the clean-technology sector at large is undeniable, even if creation of a hydrogen economy and the mass manufacturing of fuel-cell cars remains an elusive goal.
The company over the years has proven fertile ground for the next-generation of greentech companies, each having learned hard lessons from papa Ballard. You might call them "Ballard Babies," the high-tech spawn of Ballard alumni eager to make a mark on the world - whether it's to beef up power to mobile phones, such as Angstrom Power and Tekion, or to improve the economics of running forklift fleets, such as Cellex Power and General Hydrogen. A common thread to most is the potential to achieve profitability and commercial success on a shorter timeline than Ballard.
"Our experiences at Ballard catalyzed the formation of this company," says Neil Huff, president and chief executive officer of Tekion, formerly known as Renew Power. The company, founded in 2003, is on the verge of launching a micro fuel-cell product based on formic acid. It's designed to constantly charge the battery on a mobile device, similar to the way hybrid-electric cars operate.
Huff was CEO of Ballard's lithium-battery division between 1992 and 1997, a business that was eventually spun out to form BlueStar Battery Systems. After a brief stint at nanomaterials company Lightyear Technologies, he teamed up with former Ballard colleague David McLeod on the belief that portable devices needed a better, longer-lasting source of power.
"Certainly, in the early days of Tekion, we received a lot of credibility because of our roles at Ballard," says Huff, adding that the relationship has helped over the years with financing efforts. So far, Tekion has raised $19 million, and it counts cell-phone maker Motorola as both a strategic investor and customer.
McLeod, the first nonfounding employee at Ballard, joined the company in 1983 and, after 15 years, proved integral to nurturing partnerships with Daimler Chrysler and the U.S. military. Now, as vice-president of marketing and business development at Tekion, he's amazed that with just four years of research and development the startup is so close to product launch.
"That's a direct result of Ballard, really," says McLeod, who also gives due credit to the universities and research centers around the Vancouver area, which, because of Ballard, has earned an international reputation as a cleantech cluster and center of excellence for fuel-cell innovation. "At one point, Ballard was like a university for people, and we could tap that talent." Huff, in Toronto with McLeod to drum up a final round of financing, nods in agreement. More than half of Tekion's employees are ex-Ballard. "When you have a Ballard, it's like an engine creating engineers and scientists."
Even Geoffrey Ballard, the fuel-cell father in the flesh, has tapped the pool of talent from the company he co-founded so long ago. He left Ballard in 1997, giving up his role as chairman, and two years later founded General Hydrogen Corp. to advance the use of fuel-cell systems in forklifts. Ballard alumni Craig Greenhill and Ed Mufford joined him in executive roles, while Ballard co-founder Paul Howard became vice-chairman.
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In May, New York-based fuel-cell developer Plug Power Inc. acquired General Hydrogen for $10 million. Plug Power had scooped up another Ballard Baby two months earlier, spending $45 million for Cellex Power Products Inc., a competitor and neighbor to General Hydrogen. Both Richmond, British Columbia, startups proved there was a business case for forklifts powered by fuel cells, which they demonstrated could outperform that longtime industry standard - lead-acid batteries.
"Given Ballard hasn't quite commercialized its products, you look for other things that did emerge from it, and this has been one of those wonderful side benefits," says Mossadiq Umedaly, a former chief financial officer of Ballard who spent eight years with the company.
Umedaly went on in 1999 to become CEO of a little-known power electronics company called Xantrex, which at the time had less than $10 million in revenues. He raised more than $100 million, led acquisitions and eventually guided Xantrex through a successful initial public offering. Now a profitable company pulling in more than $200 million a year in revenues, Xantrex is also considered a leading supplier of power electronics to the fast-growing renewable energy sector, including fuel cells.
"What ties us all together is that Ballard was such a unique experience," says Kirk Washington, a co-founder with Vancouver-based venture capital firm Yaletown Venture Partners who worked alongside Umedaly at Ballard. "We dealt with the oil and gas industry, the automotive industry, the electric utility industry … What's common are the problems these industries are trying to solve."
Ballard helped Washington and others not only understand the problems, but also realize that Ballard's focus on proton-exchange membrane fuel cells wasn't necessarily the solution - at least not at the time. "We got a unique perspective on what will fly, what will succeed and what may not. Obviously, Ballard was a little bit ahead of its time in that regard."
One of Yaletown's investments, founded by former employees of Ballard, is three-year-old NxtGEN Emission Controls. But, unlike Ballard, the company has stayed clear of fuel cells. It's instead focused on emission controls for diesel-engine systems, a much more immediate market opportunity.
Ex-Ballard-staffed venture capital firms such as Yaletown, Ventures West, and Chrysalix Energy have played a critical supporting role as financial catalysts for the Vancouver technology scene largely spawned from Ballard. It's a scene, a dense hub of fuel-cell innovation, that has been recognized by Ron Pernick and Clint Wilder, authors of The Clean Tech Revolution, as one of the world's Top 10 clean-technology clusters.
"Ballard has gone through a number of expansions and contractions over the years, and any company that goes through that inevitably conceives a number of startups," says Mike Walkinshaw, managing director with Chrysalix Energy, which has put money behind two Ballard babies - Angstrom Power Inc. and fuel-cell membrane developer PolyFuel Inc.
Walkinshaw spent five years at Ballard, at one point as manager of product strategy, before joining Chrysalix in 2002. Ties run deep between the two firms. Chrysalix co-founder Michael Brown made the first venture investment in Ballard back in 1987 while at his former firm, Ventures West. He remained on Ballard's board for just over a decade, helping guide the company through its formative years.
"Chrysalix's relationship with Ballard gives us special access to people, and that gives us a key advantage over our fellow venture capitalists," explains Walkinshaw. The same goes for Venture West, which has played a role in financing Cellex Power, Angstrom Power and gas-purification developer QuestAir Technologies Inc. - all of them shaped by their alma mater, Ballard.
One investment shared by both Chrysalix and Ventures West is PolyFuel, a Mountain View, Calif.,-based maker of advanced membranes for micro fuel cells. Three of PolyFuel's executives are former Ballard people, including CEO and president Jim Balcom.
"We've done well," says Balcom, who also spent a year at Chrysalix before joining PolyFuel. The company raised $50 million through four rounds of financing before listing on the AIM, an international market for small companies that's part of the London Stock Exchange. PolyFuel has more than $15 million in the bank, enough to last until micro fuel cells are launched commercially around 2008 or 2009.
Balcom expects more siblings to come out of Ballard. "I wouldn't be surprised," he says. "I think there's still more development going on and going to be going on until this industry really gets on its feet."
It won't, however, be an easy ride. Companies still focused on fuel-cell technology are tackling a market where overall revenues, while growing, have yet to result in profits for individual players. Standards remain uncertain, skepticism still looms strong and new technologies, such as advancements in battery systems, continue to emerge that threaten the technical edges that fuel cells may claim today.
Whatever the future holds, Ballard's impact on the past will continue to be felt, says Washington. "Ballard always, in my mind, will hold the position as one of the real pioneers that showed investors there was money to be made in this stuff before it was called cleantech.
"It's very much part of the Northwest story, and it helped put the region on the map, globally."