The future of sustainability: Fernhay
Rushika Bhatia
10X People

The future of sustainability: Fernhay

SME10X meets Fernhay...

Let’s set the scene for you. British and Irish co-founders Robin and Frances each have over sixty years of experience in engineering and master planning across different geographies worldwide. Their vision and passion is to contribute to thriving livable cities by having parcels delivered in low carbon ways. Cities are clean, the air is fresh so children and adults enjoy the spaces around them – this is Fernhay’s definition of success.

So, when Robin and Frances spotted a global market transformation opportunity to develop a low impact and sustainable parcel delivery system that would create better cities for everyone and ensure children now and in the future grow up in cleaner places, they knew they had to seize it.

Their combined expertise meant that they understood the issues well and had a wide network of contacts from which to collaborate and make a difference.

That’s how Fernhay was born.

Meet Fernhay

Fernhay's ambition is to minimise e-commerce’s impact in cities worldwide, providing a template for sustainable urban delivery. Partnering with UPS and others has enabled the dynamic duo behind Fernhay to take their vision from early stage concept design, through to proof of innovation, production and then mass exploitation.

Through a collaborative approach, Fernhay has developed a parcel delivery system in which packages are loaded into small containers at an out-of-town depot and delivered to a central ‘hub’ located within the busy urban area. The small containers are then distributed from the hub via 4-wheel e-assist quads or by an e-assist walker product through the city streets to make deliveries to homes and businesses. These products combine a low carbon solution with improved accessibility in cities, for the benefit of all.

Explaining the nuances of their product, Frances says: “Our first two products within our system approach to van free logistics, the e- quad and e- walker, are operating in Dublin, Ireland with UPS.” She continues: “ Until now, van-free logistics has not proven to be scalable. With Fernhay solutions this becomes possible. The market size is dramatic. Every city of 400k population and above is exhibiting problems related to climate change; worsening air quality; congestion and road safety issues. Fernhay provides a sustainable approach to solving these problems.”

The future of sustainability: Fernhay

The business model

For a company that’s only eight years old, Fernhay has a lot of feathers in its cap. The company has a proven business model and has surpassed several critical milestones. Highlighting these, the founders quip: “We are currently in pre-revenue but this changes this year as our equipment becomes available for sale and the benefits are realized. Our business plan involves a controlled expansion into several key cities with our primary client UPS, followed by expansion to additional carriers and then into a second market sector with similar opportunities.”

They add: “One of our critical milestones with our partner UPS, has been our collaboration and grant support with Dublin and Belfast City Councils, Enterprise Ireland, Smart Dublin and others to enable production development of the first powered e-quad and e-walker as part of the UPS operation in Dublin. “

Fernhay has also proved out the feasibility of a mechanization concept: “this allows our containers to move seamlessly across different modes of transport as well as the depot handling equipment, bringing scalability to the system; and we’ve established a partnership with DEE Engineering, to share workshop space and supplier base for tooling and final assembly as well as initial production build.”

“We have always driven innovation with our customers and worked with them in partnership to find ways by which they will succeed in a low carbon future. By tailoring our offering to a small group of (large) customers we believe we can remain relevant to them."

Our model is to work closely with key individuals and embed ourselves in the culture of the companies we supply to, embracing different states, regions and geographies and especially different company cultures and attitudes to change management.
Frances Fernandes

She continues: "This is achievable as our customer base is small but with global reach and large-scale requirements that can create significant turnover and profit if we remain their first choice.”

The future of sustainability: Fernhay

A few bumps along the road…

Fernhay’s unique business model has given its founders an edge and has helped them steer the business in the right direction for growth. But, scaling up has come with its fair share of challenges. They talk about a few hurdles they have had to surpass: “The biggest challenge we face is to keep developing the complete parcel delivery system whilst short -term launching the two key products, our e-quad and e-walker that will allow us to shift from pre-revenue to production sales. With limited resources and cash flow, the pressure on staff to deliver short -term is significant.”

Like most entrepreneurs, Robin and Frances have a clear strategy to sidestep these challenges. “We’re confident that with an established back story and set of innovations that form the complete parcel delivery system, we can focus on the short-term work around final operational testing and launch into production of the e-quad and e-walker.”

Wisely, they are focusing on what they do best. “Our engineering history is in automotive niche vehicle manufacturing, so our focus is on design for manufacturing; deployment of jigs and fixtures to bring quality as well as reduced manufacturing assembly times; sub-assembly in locations worldwide and final assembly and quality assurance in Great Britain and Ireland.”

What’s also been game-changing for Fernhay is that they’re agile and have been adapting to market dynamics and trends as well as the expert input from UPS on what it needs.

“Our business strategy has been strengthened by our international experience and the knowledge we have gained through the development of our suite of products. These are ready to go once our launch products are established. Changes have been made to our launch products as we realized that our original innovation was too early for the developing market sector,” says Robin.

Building a competitive edge

Working on challenges and a clear mindset to continue building on their novel place in the market has given Robin and Frances the ability to create a competitive edge for themselves. They consider the following three aspects as factors that set them apart. “Providing a unique solution to a city-wide challenge for van free logistics that needs to be solved; significant success in highly competitive innovation grant funds resulting in a significant bank of innovative products ready for exploitation with unique embedded IP; and a long-standing partnership with the number one global logistics partner UPS.”

It is this history that has also helped them approach investors and get their attention in terms of funding and investments. Speaking of their current funding scenario, they explain: “Funding has been through grant support, equity investment and directors’ loans. We have received over £300,000 in grant funding in 3 years with the most recent being through Enterprise Ireland Small Business Innovation and Research Grant. There was also the equity investment from DEE Engineering in a joint venture company to exploit the outcomes of our innovation work in 2020. Our plan is to look for a first round of Venture Capital investment in Spring 2020 based on successful deployment of pre-production equipment with UPS.”

This infusion of capital has enabled them to fund several aspects of their business. Frances outlines her plans: “The key initial activity is to establish batch production design in order to reduce the cost of manufacture through production tooling, jigs and fixtures. We will move to sub assembly manufacture with a switch to employment of assembly staff rather than technician build. In parallel with production set-up and operational success, we will employ sales staff focused on customers in logistics who then our second identified market sector.”

This infusion of capital has enabled them to fund several aspects of their business.
Frances Fernandes

Geared for the future

When asked about what’s next for the burgeoning business, “Short-term plans in early 2020 include early production sales of our e-quad and e-walker. The e-walker is particularly interesting given that Fernhay is in the unique position of being granted permission by Dublin City Council to test the e-walker on pavements and pedestrianized zones in Dublin thereby building up the sustainability case for the ongoing use of this equipment in other cities worldwide.

This will build our brand and drive understanding of our innovative work.

The Fernhay brand will also be at a high point throughout Expo 2020 Dubai as the e-quad is planned for use throughout this global event. Our business plan anticipates a controlled buildup of production and deployment in a small number of cities followed by rapid expansion of sales post Expo 2020. With sales rising and a plan for major manufacturing investment, Fernhay will secure equity and debt funding to reduce costs and maximize markets and customers. In this way, we have the capacity to sustain our business into the future.” asserts Frances.

Their vision is very much aligned to where the industry is headed. “‘Livable cities are about shared spaces and enabling a transition from vans and cars to walking and cycling. Fernhay has the same ambition for the transition of freight, encouraging the delivery of parcels by foot and pedal power in the most congested parts of our city. I believe we can harness the very latest that technology has to offer to enable this change and our ewalker and equad do just that.

But, their vision is beyond numbers, events or statistics. What the founders of Fernhay envision is to trigger a change that will redefine the sector. “Remembering that our low carbon business is seeking to solve a problem for society that needs solving.they conclude.