CEO interview – Q5D, a unicorn for wiring harness automation

CEO interview – Q5D, a unicorn for wiring harness automation

Interviews |
By Nick Flaherty

A UK electronics startup is aiming to have a valuation of over a billion dollars in the next few years by automating the assembly of wiring harnesses and other interconnect.

Q5D in Portishead, outside Bristol, has adapted 3D printing techniques to automate the assembly of the wiring harness. Initially this has been popular with electric vehicle companies and their suppliers, and is being adapted for flexible interconnect and printed electronics .

The company raised $2.3m earlier this year and is looking for more funding as it ships first versions of its assembly tools to customers. The current pipeline of deals will see at least $100m in business with a ‘hardware as a service’ (HaaS) business model giving the high multiple that software firms see for a valuation of over $1bn.

“We’ve been talking to the largest OEMs and tier one wiring harness manufacturers,” Steve Bennington, CEO of Q5D, tells eeNews Europe. “The wiring harness been a long standing real worry for them, and the long complex supply chains were brought to a head with Covid and Ukraine as it was the major supplier of wiring harnesses especially for Europe. Those supply chains are problematic.”

“The additional things are deglobalisation as the US and Europe want to bring manufacturing back and mostly that’s about capex investment in tools,” he said.

“Automating the assembly of the wiring harness creates a 30 to 50% reduction in the wiring for a vehicle. For a whole vehicle particularly a big EV customer in the US that’s hundreds of dollars per car, and that’s potentially measurable on the bottom line.”

“The first saving is the direct labour is reduced by 80 to 90%. The second thing is shipping as you can collocate the wiring harness assembly with the vehicle assembly. At the moment it costs more to ship a wiring harness from Egypt to Spain for assembly than it does to make it. The slightly less obvious is saving inventory on assembly and after market spare parts. With our system you can make to order with lean manufacturing and this can change the design process, for example designing for fewer connectors, a lighter harness and quality improvements.”

“The other macro trend is we can’t find the people, even in low cost countries. Even in Mexico they say they can’t get the people,” said Simon Baggott, chief marketing officer.

All of this, plus the experience of the prototype CY1000 system (below), is key for raising funds.

“There was the Lockheed Martin deal for £2.3m and we are working on another round later this year with corporate investors. It’s an interesting mix,” said Bennington, who has run technology businesses for over a decade. Prior to that he was a scientist, designing and building some of the UK’s national science infrastructure and running a research team as a visiting professor at University College London’s Centre for Nanotechnology.

 “It’s been a really tough environment for venture capital in the last couple of years.”

The choice of exit determines the investors.

“I would love to be able to float on the UK stock market but that won’t suit our shareholders,” he said.

“We don’t believe we can IPO in the UK as the pension funds have pulled all their money out and moved 70% to the US as they removed the tax rebate on dividends. Unless that changes we will not be able to IPO in the UK so we are looking at a trade sale,” he said.

There has also been a realisation that manufacturing matters.

“There has been a real change in VCs where people didn’t invest in manufacturing 10 years ago, but there’s been a huge sea change. We could not have set this company up more than five years ago. “It has to be a unicorn, we are a venture backed business so we have to be a billion dollar company, that just comes with the territory,” said Bennington. 

“To get to £100m revenue we need five years and ten customers, and we have those customers now,” said Baggott.  

The company can scale easily, says Bennington, and plans to use hardware as a service (HaaS) where the company leases the equipment to customers which will account for around half the business.

“What’s made a difference in this funding round is we have the benchmarking of the pricing so we are much more confident and then you can value price the technology and see the margins, its SaaS margins for a hardware business,” said Bennington.

The first version is the CY1000, the world’s first CAD/CAM manufacturing cell for automated production of wiring and measures 2.3m x 2.2m and is 2.3m high with a robot arm that moves at 3000mm/s. This is a demonstrator for pilot lines that allows a range of deposition techniques to add electrical functionality using interchangeable end effectors. These tools provide insulated and bare wire deposition, termination to connector as well as polymer deposition.

The next SQ version has a larger assembly bed and can be customised for specific production lines.  

The company also has a deal with Siemens to use the popular NX design software. “We have a deal with Siemens to get a fraction of the NX sale if it is bundled,” said Baggott.

Hardware as a service (HaaS)

There are two routes into the market for Q5D.

The first is for UK high end SUVs with the wiring in the roof lining. “We have proven we can do it more cheaply and we are doing a small production run for them, with all the terminations s proof of concept, then we go to a CEM and provide the machine to them. Then they are looking at other parts of the vehicles, eg doors, bumpers and seats,” he said.

“There are other OEMs in the US that want to automate their entire line. They will hopefully take a pilot line from us for a low cost vehicle, and that’s 200 machines.”

“We are beginning to get purchasing, production and engineering and design together,” said Baggott. “No two writing looms are exactly the same, and this causes problems in every aspect of the car. This is an opportunity to have wiring looms that are identical and can be easily changed and introduced.

However there has been a lot of education to do.

“Overall there isn’t a market for machines that automate wiring harness assembly but the message is very accurately aligned to what the automotive guys need,” he said.

Printed electronics

The 3D printing technique used for wiring harnesses can also be used for printed electronics, and Q5D is developing a system for next year as a result of interest from defence sector, says Bennington.

“We spray a surface with a conductive paste and use a laser to cure and etch so it’s faster than other printed electronics,” said Baggott. “We can create the metamaterials for radar or the antenna for 5G or 6G or capacitive touch surfaces. It’s the same CY1000 machine with the same boom with a 1.0m diameter x 0.5m high for 5 axis build volume but with a fibre delivered diode laser, and then a spray head, then in the future we can add a wiring head,” he said.

“We have lots of different techniques for putting down wires where you want them and keeping it there, every time. For example we can put down bare wires in laminate which is recyclable.”

All this has happened relatively quickly says Bennington.

“We released the first product in June 2023 and we are now negotiating deals for pilot lines,” he said. “We got our first pre-seed investment at the beginning of 2020 and then seed of £2.4m in 2021 to employ the first 8 people and now we are at 22.”

The systems are assembled in the UK, with Q5D looking to expand into the US and Asia.

“We outsource some of the manufacture of the frame to Taiwan and assemble here, so we are investigating other companies in the UK to minimise the time to shipment for the UK and Europe. For the US we will build in the US and in the far east for the far east, probably in house assembly,” said Bennington.

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