Council In the News Index

Defense Giant and Tiny Tech Link Up for India (Boston Business Journal)

by Kyle Alspach

Last December, cleantech entrepreneur Sam White got to talking with an official from Raytheon Integrated Defense Systems during an event at the Massachusetts Institute of Technology.

Four months later the two were in India together, surveying the local excitement about a solar-powered refrigeration system designed and built by White’s Cambridge-based startup, Promethean Power Systems Inc.

The Raytheon official, Ray Schubnel, was there exploring the possibility of a partnership between Raytheon and Promethean to commercialize the product. Schubnel said he was impressed with the prototype as well as the need for the product in India — where milk spoilage is a major issue due to lack of on-site cooling.

White was also impressed with Raytheon, which sent Schubnel to India for more than a week.

“That showed a level of commitment that we were really shocked by,” White said. “We realized, ‘These guys are serious.’ ”

Raytheon and Promethean are continuing their discussions about partnering to sell the solar-powered chillers to dairies in India. Promethean would likely provide its initial intellectual property and connections in India, while Raytheon may provide engineering to make the product manufacturable and could also help with sourcing and manufacturing, according to the two companies.

Partnerships between huge companies (Raytheon is the largest public company in Massachusetts by revenue and one of the largest employers) and tiny ones (Promethean employs five) may not happen every day.

But such deals make a lot of sense in the Massachusetts technology industry, said Chris Anderson, president of the Massachusetts High Technology Council. Interest in pairing great ideas at small firms with great resources at large ones is growing, he said, in part because such partnerships can help large companies such as Raytheon to diversify.

At the Waltham-based defense contractor, projects in energy and other non-core areas are being accomplished by the company’s 18-person Mission Innovation group in Tewksbury.

Mission Innovation, where Schubnel is a project manager, began in 2004 and works to find unique projects that offer both new business opportunities and address issues of safety and stability. Past projects have included producing new technology for oil extraction from shale reserves and developing a method for using honeybees to detect chemicals.

The next project, Raytheon hopes, will be to begin producing Promethean’s chillers next year. If the deal goes through, it would be the latest of many examples of Raytheon working with small companies for mutual benefit, said Lee Silvestre, who heads Mission Innovation as a vice president of Raytheon Integrated Defense Systems in Tewksbury.

“We don’t want to crush these small guys, but we want to in fact bring to the table the things that they can’t bring” on their own, Silvestre said.

Promethean has been focusing on India, the world’s largest milk producer, since 2008. That’s when White and the company’s other co-founder, Sorin Grama, traveled to the country with money won in the MIT $100K competition in 2007 (the company took second prize, worth $10,000.)

White said he and Grama found that much of India’s milk is produced by farmers in remote, off-the-grid villages, then transported while still warm to dairies. Spoilage and nutrient loss are common results.

With the solar-powered chiller, expected to cost about $12,000, the milk can be cooled at village collection centers before being sent to the dairies. Goa Dairy, which is testing the prototype, has already committed to buy 10 chillers, and the aim is to sell hundreds to Indian dairies next year, White said. The company sold its first chiller last year to a dairy in India and has not generated any other revenue so far, he said.

Promethean recently opened an office in India, where two of the firm’s employees are stationed. The company has received two rounds of venture capital, which came in at less than $1 million each, from Quercus Trust in California and Boston-based Invested Development, White said.

Promethean and Raytheon did not elaborate on how the venture in India might split up its revenue, but Schubnel said the intent is for the project to “benefit both the Indian population as well as Raytheon’s balance sheet.”

Silvestre said forming partnerships with small firms is done with the understanding that at Raytheon, “we will never most likely have 100 percent of the solution” to any major problem.

“We’ve realized that people are coming on the scene every day, small companies with small numbers of players, that stumble upon wonderful pieces of a solution,” Silvestre said.