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A Little Startup That Could:
Aquarius Builds an Engine
Others Only Dreamed Of
A challenge-hungry Israeli autodidact might have succeeded where the biggest
failed, creating a more e cient engine with world-changing implications forpower generation and transportation
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An Aquarius
prototype. Credit: DavidI am an heir of a Holocaust survivor, and I
want to discover more about my rights.
Listen to this article now-11:07

Amitai ZivFollowJul. 13, 2020

At the beginning of June, Aquarius Engines, a startup in the Tel
Aviv suburb of Rosh Ha’ayin, said it had signed a giant 250 million
euro ($281 million), three-year contract with the Finnish tech
giant Nokia. The contract will be worth 600 million euros over ﬁveyears.
In the Israeli high-tech sector, these are the kind of numbers thatmake a company a juicy acquisition target. And remarkably, thecontract is not only huge, it’s Aquarius’ ﬁrst.

KatzOPENAquarius has designed an engine that can be used to bring power
to remote locations across Asia. Field tests in the Philippines will
start later this year, followed by mass production, according to areport by Bloomberg News.
The technology "enables us to open huge markets that were once
totally o -limits,” Stuart Hendry, vice president of Nokia
Enterprise, Asia Paciﬁc, told Bloomberg. “We will have the ability
to supply power to those residing in extremely isolated areas suchas remote islands, high in the mountains or deep in the jungle.”“When we came theﬁrst time, theyscheduled a meetingfor us at 12:20. Do you
know what thatmeans? That we have
10 minutes because at
12:30 the Austrians
eat lunch. That’s what
they thought of us in
the industry.”
The founders of Aquarius. From left, CTO Shaul Yaacoby, CEO Ariel Gorfung and Chairman GalFridman. Credit: David Bachar

To understand why a multinational company would commit
hundreds of millions of dollars in a deal with a tiny startup, a shorthistory of the engine is probably necessary.
The four-stroke internal combustion engine was invented by
Nicholas Otto in Germany 150 years ago. Several years later, two of
his employees, Gottlieb Daimler and Wilhelm Maybach, developed
a four-piston engine. “And, that’s the engine that we have beenfamiliar with up to now. Nothing has changed,” says Gal Fridman,
Aquarius’ chairman and one of its three founders. “They’ve added
a computer, added turbo, but the change is minor, and since thepatent has already expired, all of the motor vehicle manufacturers
are still using this combustion and gas exchange system.”
The four-stroke engine works in four steps: intake, compression,combustion (ignition) and exhaust. The combustion releases
energy, with the piston pushed upwards again. This linear motion
is converted into a rotational motion by a crankshaft, which drives
the vehicle forward.
In a standard gasoline engine, the process requires valves andspark plugs. The conversion of linear to rotational motion createsmuch friction that must be reduced with oil. But the lubricant gets
hot and emits smoke, coating the engine in soot. In short, it’s not
an elegant process.
When Aquarius CEO Ariel Gorfung was ﬁrst approached by Shaul
Yaacoby with the idea for an innovative new engine design, he wassuspicious. Gorfung was running a venture capital fund and iswell-known in the Israel high-tech industry. He’s seen a lot ofbusiness proposals over the years. “I knew he was a genius, but I
was still apprehensive,” he recalls. Yaacoby, who today is
Aquarius’ chief technology ocer, was not an engineer.

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Gal Fridman

Shares of Israeli-founded digital insurer Lemonade soar afterIPO
Holy Grail
Yaacoby’s idea for a linear internal combustion engine isconceptually speaking nothing new. The ﬁrst patents for one wereregistered as early as 1940. There is even a Wikipedia entry on afree-piston linear generator. But the concept was tested andabandoned many times – it remained the elusive Holy Grail of thetransportation industry.
Still, in recent years some 15 groups around the world have beenworking towards a smiliar thing, including big shots like Japan’s
Toyota and the German space agency. The latter has been at itsince 2002, but the idea hasn’t gotten further than articles inacademic journals.
“The dream has never been abandoned. There are all kinds ofserious groups with high hopes trying to build a two-stroke linear
engine again. Aquarius is one of them and I wish them luck,” says
Prof. Eran Sher, an expert on internal combustion engines. “Theyall feature a two-stroke internal combustion engine that has nocrankshaft but moves freely within the cylinder housing. There area lot of problems in this conﬁguration related to engine stability,
timing and consistent operation, which is why this idea has failedso far.”
Aquarius Engines a revolutionary engine for power generation engine for $ 100

Watch onAquarius’ main competitor is the U.S. company Mainspring
Energy, which was founded in 2010 by three Stanford graduates
and is developing a linear generator that uses a low-temperature
reaction of air and fuel to drive magnets through copper coils toproduce electricity. It’s raised $133 million from investors thatinclude Bill Gates and says it will have its ﬁrst commercial engine
on the market this year.
Could an Israeli autodidact have succeeded where a team of German
Ph.D.s and Toyota have failed?
“A fair question,” admits Gorfung. “At the beginning we weresheepish about asking money from others. We used our own
capital and went to a lathe workshop in Ra’anana, and that’s how
we built the ﬁrst prototype.”
Armed with that prototype, they raised $3 million in 2015 fromlocal investors such as banker Leon Recanati and industrialist ZviWatch later

ShareYemini. But before they dared do that, the team decided to get a
professional opinion about the engine, for which they had to goabroad. “There was no one to ask because in Israel we know about
rocket engines for missiles, but there isn’t a lot of knowledge
about internal combustion engines,” recalls Fridman.
They turned to the Austrian company AVL, which is known
worldwide for its engine expertise. “When we came the ﬁrst time,they scheduled a meeting for us at 12:20. Do you know what thatmeans? That we have 10 minutes because at 12:30 the Austrians eatlunch. That’s what they thought of us in the industry,” saysFridman.
“They told us that what we are showing them is too good to betrue, that it could never work, that everyone had tried and failed ....
It took a year and half for AVL to get back to us, but today they are

Banker Leon Recanati, an early investor
in Aquarius. Credit: Moti Milrod

still conducting tests for us and one of our engines has been
installed and is running at a factory in Gratz, Austria,” he says.
Aquarius still struggles to be taken seriously. “We had a hard time
recruiting employees,” recalls Fridman. “The ﬁrst engineer we
hired was Pierre Detre, who was Formula One engineer for Renaultand Toyota. He didn’t want to hear from us at all. Ariel had to wait
for him outside his house to get a chance to talk to him. Today,
he’s our chief engineer.”
Eventually, the AVL test results came back. Fridman and Gorfung
were conﬁdent it would meet emission standards but they wereconcerned if it would meet eciency benchmarks, in other wordsthe ability to convert gasoline into mechanical energy. Worldwide,
the rate is 20%, which adds up to a lot of wasted energy.
“When we talked among ourselves, Ariel and I, we said that if itreaches 22% eciency, we’ll close the company. If we get to 27%,we’ve got a problem and if it’s over that – that was our dream. Theﬁrst measurements showed 34% eciency. That makes us a world

champion of engines. Sometimes you hear about reaching 39% butthat happens at certain points, let’s say at 8,000 rotations perminute. Our engine works at a consistent rate so it’s always
ecient,” says Fridman.

The Aquarius engine is light, weighing 10.5 kilograms, comparedwith 120 for a conventional engine. It contains just 12 parts andonly one of them moves, compared with 200 moving parts in a
regular engine. It has just one piston where explosions are createdinside a valveless cylinder moves the piston conductor right andleft at great speed. The end of the rod is connected to a magnet thatmoves inside metal coils, generating electricity with each stroke.
All this makes the engine simple to manufacture, and cheap andeasy to operate. Theoretically, it should su er fewer breakdowns.

Industrialist Zvi Yemini, an early investor
in Aquarius. Credit: Moti Milrod

As the engine has accumulated working hours and test results,
Aquarius has raised more capital – a total of $40 million as oftoday from investors that include Marius Nacht, a founder ofIsrael’s Check Point Software Technology; Dr. Gideon Stein, chief
scientist at the self-driving technology company Mobileye,
Japanese auto parts maker Musashi Seimitsu and Hollywood
producer Avi Lerner. Aquarius has also received a $5 million grantfrom the Polish government because most of its development teamis based there.
Its biggest investor is Shlomo Elia, a well-known ﬁgure in theIsraeli defense industry and the ﬁrst outside to back the company.

Early on, Aquarius had approached the automobile industry
certain that its engine would ﬁnd its place under the hoods of theworld’s cars. It never happened. Auto making is a conservative
industry subject to heavy regulation and it wasn’t easy to convince
companies to revolutionize. Like many startups, Aquarius had toundertake a strategic pivot into a di erent market segment, which
turned out to be generators.

Aquarius ABOUT May 2019from AQUARIUS ENGINES

01:43

New applications“If you think about it, to call it an engine is incorrect,” says
Fridman. “It should be called a converter. You put in one kind ofenergy and take out another kind. We thought in terms of making
wheels turn, but in the end we chose to convert gasoline toelectricity.”
One big market is in the telecommunications industry, says
Gorfung. Today, around the world there are 4.5 million antennas
using for mobile communications, but next-generation 5G
technology will increase that to 20 million. About 15% of themneed to be powered by generators that sell for between $5,000 and$12,000 each – a $15 billion market. The entire global market for
generators is worth $100 billion.
“In India there are about a million communication points, and ifthey’re powered by a generator you need to replace the oil after
250 hours of operation,” says Fridman. “What do you think they
do with the burned oil? In Switzerland, they may dispose itproperly, but in a lot of places they just pour it on the ground andput in new oil, which ruins the environment." Maintenance has tobe done after every 1,000 hours.

“What do you thinkthey do with theburned oil? InSwitzerland, theymay dispose itproperly, but in a lotof places they justpour it on the groundand put in new oil,which ruins theenvironment."

Aquarius Chairman Gal
Fridman

A man fixes a generator in Khan Yunis, Gaza Strip. Credit: IBRAHEEM ABU MUSTAFA / Reuters“We chose generators because it’s a market that’s sensitive tomaintenance and logistics, and that’s where we have anadvantage. Even if competitors like Caterpillar and General Electricwere to o er their generators for free to eliminate the competition
they would still need to provide service,” he says.
Martin Hauske, the Asia Paciﬁc Energy Segment sales leader atNokia, calls Aquarius’ technology trailblazing in terms ofoperating cost and maintenance. It is a perfect solution when you
need to install a generator, for example, on an isolated island orremote places in Australia. Nokia is already talking to customers in
the Philippines, New Zealand and other countries.
Hauske sees a market of 55 million Asians without access toelectricity that could beneﬁt. When Nokia looks at the future
electricity grid, it sees something like a communications networkthat combines generators with solar panels and batteries. TheAquarius generator is part of this value proposition, he says.
Gorfung says that assuming the ﬁeld trials are successful,Aquarius will start seeing revenues from the Nokia contract nextyear. The company still faces the problems involved in mass
production.
“The challenges of mass production are huge, so we’re going to do
it by outsourcing with someone who takes responsibility to build
the production line, undertake quality control and ship theproduct,” he says.

The Aquarius engine. Credit: David Katz

The Aquarius generator, according to its website, is a meter long
and weighs 100 kilograms. Competing generators weigh six times
that much and have to be brought in by truck. The company won’t
discuss costs in detail, but they are about the same proportion tothe competition as the weight.
The next goal for Aquarius is to develop an engine that doesn’t use
fossil fuel. “Because of our engine is so ecient, its emissions arelow. But we have undertaken a series of developments that could
bring them to zero – and it would be a non-fossil engine,” says
Gorfung. All in all, Aquarius amounts to a story of daring andambition even by the standards of Israeli startups. Fridman
acknowledges that but doesn’t express any hesitation because any
challenge less than that wouldn’t interest him. That’s why he hadsold an early startup he had cofounded.
“I was bored,” he says. “Have you heard of Transalp? It’s thetoughest competition in cycling – riding through the Alps in eightdays, 160 kilometers a day on average. I did it twice. When I met
Ariel and we started thinking about the idea [of Aquarius], I told
him, ‘I don’t want to climb Mt. Tabor. I want to climb Everest.
Maybe we won’t reach the summit but it will be interesting.”

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