You know that natural gas line that serves your house or small business? What if you could also use it to fuel your car or truck? Onboard Dynamics is aiming to commercialize a technology that provides for natural gas compression on board your vehicle, basically allowing you to refuel anywhere there’s a low-pressure natural gas line.

So, BBQ some burgers. Then use the same source of gas that fuels your grill to fill up your Ford F-150. BendTECH caught up with Onboard Dynamics CEO Rita Hansen to hear about her whirlwind year of fundraising, OBDI’s recent visit to Detroit and what’s next for this Bend-based startup.

Startup: Onboard Dynamics
Started: Oct. 2013
Founders: Chris Hagen, CTO; Rita Hansen, CEO; and Jeff Witwer, VP of Engineering
Employees: 4
Headquarters: Bend, OR

Rita Hansen, OBDI CEO
Rita Hansen, OBDI CEO

How did this all start? Chris came up with the original concept about five years ago when he was working as an assistant research professor at Colorado State University. (Hagen is now at OSU-Cascades). His research has been focused on energy systems, advanced internal combustion engines and alternative fuels. He basically questioned whether you could use the power of a vehicle’s combustion engine to compress natural gas that could then be used as the vehicle’s transportation fuel. He received a $1 million award through the Department of Energy’s ARPA-e program, which aims to bring new energy technologies to market, to build a prototype to do just that.

And Onboard Dynamics was born from that research? Yes. Chris completed the proof of concept; he built out a truck with an onboard CNG compressor. We know it works. So now we’re at the point of figuring out how to commercialize this technology and ensure that it’s not just an academic exercise.

What’s happened in OBDI’s first year? We applied for — and received — $2.8 million in federal funding from ARPA-e. That came with a 20% cost-sharing requirement that we raise an additional $720,000. So we’ve been raising that, and we’re nearly there. We’re not at a place where traditional VCs would invest. Our funding/cost share match requirement so far has been met from gap funding programs like Oregon BEST and ONAMI and waived indirect fees from OSU for continued services to be performed.

What’s your target market? We’re really looking at small commercial fleets, say a local UPS or county road departments. In fact, Deschutes County Road Department will be one of our first pilot customers. Companies with fleets of 50 or more vehicles could afford to build their own CNG stations. But these cost about $1 million to build. There are 30,000 smaller, private fleets in the U.S. that would like to use natural gas, but don’t have a place to fuel up and can’t afford to build their own stations. There are only 13 public and private CNG stations in Oregon. But with our technology, you’d be able to refuel with any low-pressure natural gas line. The infrastructure is already there.

Is natural gas widely available? There are 673,000 homes and businesses served by low-pressure natural gas lines just in Oregon.

What’s your competition? It’s basically maintaining the status quo. With prices of gas near $3 per gallon, people may not be thinking about alternative fuels. But the oil market is volatile. Natural gas is produced domestically, and it’s much cheaper — about $1 per gallon gasoline equivalent — especially when it comes from your own home or business.

What were you doing in Detroit? Well we recently met with the big three automakers (Chrysler, Ford and GM). All of them produce bi-fuel vehicles today. We need to choose an engine to work with and we’d love to collaborate with one of them. We definitely received a positive response to our idea, and we’re now having follow-up meetings.

What’s next for ObDI? We want to be ready to go with a commercial product in 18 months. We’ll be hiring. And there’s some fundraising still to do.

Any words of wisdom for other startups? I think the key is to not be overwhelmed by the enormity of what you’re trying to do. It’s like climbing a mountain. You break it down into pieces. You first make it to base camp. There’s a tendency for startups to get distracted, and you need to focus on working toward that next goal.

 

Kelly Kearsley

Kelly Kearsley, the co-founder of StartupBend.com, is passionate about startups, entrepreneurship and Bend. In addition to writing this blog, she creates content and manages content projects for global financial companies, tech firms and startups. She began her career as a newspaper journalist and later worked as a freelance writer. Her work has appeared in WSJ.com, Money Magazine, CNNMoney, MSNBC and Runner's World. See her work at kellykearsley.contently.com or kellykearsley.com.

You can reach Kelly by email at [email protected].
Kelly Kearsley