Safe & Sound: Enhancing Marine Training
Negotiating the second licensing agreement between Memorial University of Newfoundland and Virtual Marine Technology in early 2007 was no mean feat.
Virtual Marine, known as VMT, was a burgeoning startup that was commercializing a training simulation system that scientists at MUN had developed following the 1982 sinking of the Ocean Ranger oil rig off Newfoundland, which claimed 84 lives.
After MUN received research funding for the project, VMT was launched in 2006, establishing a corporate body that would license the intellectual property and sell the training systems.
VMT’s first licensing deal was with the MUN itself, but the second one also involved the university’s Marine Institute and the National Research Council’s Institute of Ocean Technology. With so many parties, any licensing deal was bound to be complicated.
So David King, the President and CEO of Genesis Group Inc., took the bull by the horns and sorted matters out.
The Genesis Group is Memorial University’s commercialization agency, and includes Genesis Research, which links business and industry, and the Genesis Centre, an incubator for companies that grow out of the university. It is also a key Springboard Atlantic member in Newfoundland and Labrador.
King stepped forward to negotiate on behalf of MUN, the Marine Institute and NRC, and was able to wrap up a licensing deal. And he took the lead in ensuring the intellectual property was protected.
Not only that, he also introduced VMT – which was then a tenant at the Genesis Centre -- to its first angel investor, who sank money into the company in the summer of 2007.
But that was just the beginning of a long and rewarding relationship between Virtual Marine Technology, Memorial University and the Genesis Group. “We’ve found a very efficient and mutually beneficial way of dealing with the university in terms of the licensing of technology,” said CEO Capt. Anthony Patterson.
The company has grown into a cornerstone member of the St. John’s oceans industry cluster. It attracted $3.2 million from investors led by GrowthWorks Atlantic and later raised debt financing from the Business Development Bank of Canada.
The company has gained momentum by selling its maritime training systems into two key markets – offshore oil and gas and national defense. Its clients operate under strict regulation and work hard to meet the standards laid down for them. But it can be expensive, even dangerous, to rehearse safety procedures in extreme maritime conditions.
VMT’s simulation systems allow nautical organizations to train and test in the virtual equivalent of such conditions, so their crews improve safety and the organization saves money.
Virtual Marine sealed some key deals in Canada in those two segments late in the last decade, and those sales raised its profile in overseas markets.
VMT has increased its revenues 500 percent in the past two years so they are now between $1 million and $5 million, mainly because it has landed major contracts in the Gulf of Mexico and North Sea, and additional deals in such countries as Germany and Brazil.
That growth has only enriched its relationship with MUN. The university still carries out research for the company, and the royalty agreement allows VMT to license out additional IP from the university as it comes available.
To finance that research, the company awards grants to the university, and over the years those have amounted to almost $1 million. Which, as Patterson says, is not bad for a company of about 20 employees.
“In return, we’ve got a great accelerator,” he said of the research scientists he works with. “If we did more of this in Atlantic Canada, we would accelerate our high tech industries to no end.”