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Forsaking funding at a $1 billion valuation, Solugen preps a new green chemical product and a big 2021
Late last year, Solugen, a startup using synthetic biology to take hydrocarbons out of the chemicals industry, decided against pursuing a new round of funding that would have valued the company at over $1 billion, TechCrunch has learned.
Instead, the Houston-based bio-manufacturing company raised an internal round of roughly $30 million from existing investors and continued working on its latest project — a new bio-based manufacturing process for a high-value specialty chemical that can act as an anti-corrosive agent.
That work represents a potentially lucrative new product line for the company and charts a course for a host of other businesses that are refashioning the basic building blocks of life in an attempt to supplant chemistry with biology for manufacturing and production.
If Solugen can get its high-value chemical into commercial production, the company can follow the path that sustainable tech companies like Tesla have mastered — moving from a pricy specialty product into the mass market. And rather than over-promise and underdeliver, Solugen wanted to get the product line right first before raising big bucks, according to people familiar with the company’s thinking.
As the world looks to move away from oil and its byproducts to reduce greenhouse gas emissions and slow down or reverse global climate change, the chemicals industry is in the crosshairs as a huge target for disruption. Vehicle electrification solves only one part of the oil problem. The extractive industry doesn’t just produce fuel, but also the chemicals that make up most of the products that defined consumer goods in the twentieth century.
Chemicals are everywhere and they’re a huge business.
Companies like Zymergen raised hundreds of millions of dollars last year to develop industrial applications for synthetic biology, and they’re not alone. Startups including Geltor, Impossible Foods, Ginkgo Bioworks, Lygos, Novomer and Perfect Day have all raised significant amounts of capital to reduce the environmental footprint of food, chemicals, ingredients and plastics through synthetic biology.
Some of these companies are seeing early success in food replacements and ingredients, but the promise of biologically based chemicals have been elusive — until now.
Solugen’s new product will produce glucaric acid, a tough-to-make chemical that can be used in water treatment facilities and as an anti-corrosive agent — and the company can make it with a zero carbon (or potentially carbon negative) manufacturing process, according to Solugen co-founder and chief technology officer, Sean Hunt.
The glucaric acid from Solugen is cheaper to produce and more environmentally friendly than existing phosphonates that are used for water treatment — and the company has the benefit of competing against chemicals manufacturers in China.
Given the continuing tensions between the two countries, the U.S. is looking to make more high-value products — including chemicals — domestically, and Solugen’s technology is a good way forward to have home-grown supplies of critical materials.
Solugen still intends to raise more capital, the company just wanted to wait until its latest production plant for the acid came online, according to Hunt.
It’s also the fruit of years of planning. The two co-founders, Hunt and Gaurab Chakrabarti, first realized they could potentially use the technology they’d developed to make specialty chemicals back in 2017, according to Hunt. But first the company had to make the hydrogen peroxide as a precursor chemical, Hunt said.
“It’s advantageous for us to focus on this,” said Hunt. “As we scale, we can enter more commodity-type markets down the road.”
It’s all part of the notable strides the entire industry is making, said Hunt. “Synthetic biology has really made significant strides,” he said. “We have our commercial plant coming online this summer [and it proves] synthetic biology has gotten to the point where we can compete on price and performance.”
So the capital infusion will come as the company gets closer to the completion of these commercial scale facilities.
“It’s not like we were sitting on a term sheet and we said no,” Hunt said. “We want to make sure that we are hitting the milestones and the goals at a commensurate pace which is this year. I’m extremely bullish and optimistic of 2021.”
Solugen’s co-founder sees the path that his company is on as one that other startups working in the synthetic biology space will pursue to bring profitable products to market at the higher end before competing with more sustainable versions of commodity chemicals.
“How do you start a company that has this level of capital intensity?” Hunt asked. “You can start in the fine chemicals space where everything sells for tens to hundreds of dollars per pound. For us, glucaric acid is that specialty chemical and then we will do commodity.”
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Tarform unveils Luna e-moto for folks who may not like motorcycles
Brooklyn-based EV startup Tarform unveiled its Luna electric motorcycle in New York last week — a model designed for an audience that may not actually like motorcycles.
The company’s first street-legal entrant starts at $24,000, does 0-60 mph in 3.8 seconds, has a city range of 120 miles, hits a top-speed of 120 mph and charges to 80% in 50 minutes — according to company specs.
The model was hatched out of the company’s mission to meld aesthetic design and craftsmanship to environmental sustainability in two-wheeled electric vehicles.
To that end, the Luna incorporates a number of unique, eco-design features. The bodywork is made from a flax seed weave and the overall motorcycle engineering avoids use of plastics. The Luna’s seat upholstery is made out of biodegradable vegan leather. Tarform is also testing methods to avoid paints and primers on its motorcycles, instead using a mono-material infused with algae and iron-based metallic pigments.
The company was founded by Swede Taras Kravtchouk — an industrial design specialist, former startup head and passionate motorcyclist. The Luna launch follows the debut of two concept e-motos in 2018.
Image Credits: Jake Bright
On Tarform’s target market, he explained the startup hopes to attract those who may be turned off by the very things that have turned people on to motorcycling over the last 50 years — namely gas, chrome, noise and fumes.
“It’s more for people who want a custom bike and the techies: people who wanted to have a motorcycle but didn’t want to be associated with the whole stigmatized motorcycle lifestyle,” Kravtchouk told TechCrunch.
Tarform enters the EV arena with competition from several e-moto startups — and on OEM — that are attempting to convert gas riders to electric and attract a younger generation to motorcycling.
One of the leaders is California company Zero Motorcycles, with 200 dealers worldwide. Zero introduced its $19,000 SR/F in 2019, with a 161-mile city range, one-hour charge capability and a top speed of 124 mph. Italy’s Energica is also expanding distribution of its high-performance e-motos in the U.S.
In 2020, Harley-Davidson became the first of the big gas manufacturers to offer a street-legal e-motorcycle for sale in the U.S., the $29,000 LiveWire.
And Canadian startup Damon Motors debuted its 200 mph, $24,000 Hypersport this year, which offers proprietary safety and ergonomics tech for adjustable riding positions and blind-spot detection.
On how Tarform plans to compete with these e-motorcycle players, Kravtchouk explained that’s not the company’s priority. “We’re not even close in production to Zero or the other big guys, but that’s not our intention. Think of the [Luna] as a custom production bike,” he said.
“We did not set out to build a bike that is fastest or has the longest range,” Kravtchouk added. “We set out to build a bike that completely revises the manufacturing and supply chain of e-motorcycles in a way where we ethically source our materials and create an ethical supply chain.”
For this mission, Tarform has obtained funding from several family offices and angel investors, including LA-located M13. The Brooklyn-based e-motorcycle company is taking pre-orders on its new Luna and is pursuing a Series A funding round for 2021, according to Kravtchouk.
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Greyparrot bags $2.2M seed to scale its AI for waste management
London-based Greyparrot, which uses computer vision AI to scale efficient processing of recycling, has bagged £1.825 million (~$2.2M) in seed funding, topping up the $1.2M in pre-seed funding it had raised previously. The latest round is led by early stage European industrial tech investor Speedinvest, with participation from UK-based early stage b2b investor, Force Over Mass.
The 2019 founded startup — and TechCrunch Disrupt SF battlefield alum — has trained a series of machine learning models to recognize different types of waste, such as glass, paper, cardboard, newspapers, cans and different types of plastics, in order to make sorting recycling more efficient, applying digitization and automation to the waste management industry.
Greyparrot points out that some 60% of the 2BN tonnes of solid waste produced globally each year ends up in open dumps and landfill, causing major environmental impact. While global recycling rates are just 14% — a consequence of inefficient recycling systems, rising labour costs, and strict quality requirements imposed on recycled material. Hence the major opportunity the team has lit on for applying waste recognition software to boost recycling efficiency, reduce impurities and support scalability.
By embedding their hardware agnostic software into industrial recycling processes Greyparrot says it can offer real-time analysis on all waste flows, thereby increasing efficiency while enabling a facility to provide quality guarantee to buyers, mitigating against risk.
Currently less than 1% of waste is monitored and audited, per the startup, given the expensive involved in doing those tasks manually. So this is an application of AI that’s not so much taking over a human job as doing something humans essentially don’t bother with, to the detriment of the environment and its resources.
Greyparrot’s first product is an Automated Waste Monitoring System which is currently deployed on moving conveyor belts in sorting facilities to measure large waste flows — automating the identification of different types of waste, as well as providing composition information and analytics to help facilities increase recycling rates.
It partnered with ACI, the largest recycling system integrator in South Korea, to work on early product-market fit. It says the new funding will be used to further develop its product and scale across global markets. It’s also collaborating with suppliers of next-gen systems such as smart bins and sorting robots to integrate its software.
“One of the key problems we are solving is the lack of data,” said Mikela Druckman, co-founder & CEO of Greyparrot in a statement. “We see increasing demand from consumers, brands, governments and waste managers for better insights to transition to a more circular economy. There is an urgent opportunity to optimise waste management with further digitisation and automation using deep learning.”
“Waste is not only a massive market — it builds up to a global crisis. With an increase in both world population and per capita consumption, waste management is critical to sustaining our way of living. Greyparrot’s solution has proven to bring down recycling costs and help plants recover more waste. Ultimately it unlocks the value of waste and creates a measurable impact for the environment,” added Marie-Hélène Ametsreiter, lead partner at Speedinvest Industry, in another statement.
Greyparrot is sitting pretty in another aspect — aligning with several strategic areas of focus for the European Union, which has made digitization of legacy industries, industrial data sharing, investment in AI, plus a green transition to a circular economy core planks of its policy plan for the next five+ years. Just yesterday the Commission announced a €750BN pan-EU support proposal to feed such transitions as part of a wider coronavirus recovery plan for the trading bloc.
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Replacing plastic with plant pulp for sustainable packaging attracts a billionaire backer
In a small suburb of Melbourne, two entrepreneurs are developing a technology that could mean big changes for the packaging industry.
Stuart Gordon and Mark Appleford are the co-founders of Varden, a company that has developed a process to take the waste material from sugarcane and convert it into a paper-like packaging product with the functional attributes of plastic.
Their technology managed to grab the attention of — and $2.2 million in funding from — Horizons Ventures, the venture capital fund managing the money of Li Ka-shing, one of the world’s wealthiest men.
It’s an opportune time to launch a novel packaging technology, as the European Union has already instituted a ban on single-use plastic items, which will go into effect in 2021. Taking their lead, companies like Nestlé and Walmart have pledged to use only sustainable packaging for products beginning in 2025.
The environmental toll that packaging takes on the earth’s habitats is already a concern for many, and the urgency to find a solution is only mounting with consumers and businesses actually producing more waste in the rush to change consumer behavior and socially distance as a result of the COVID-19 global pandemic.
“I like technologies that focus on carbon reductions,” said Chris Liu, Horizons Ventures’ representative in Australia.
A longtime tech and product executive who had stints at Intel and Fjord, a digital design studio, Liu relocated to Australia recently and has actually taken himself off the grid.
Living in Western Australia, the climate emergency was brought directly to the top of Liu’s mind when the wildfires, which raged through the country, came within two kilometers of his new home.
For Mark Appleford, it wasn’t so much the fires as it was the garbage that kept washing up on the shores of his beloved beaches.
Over beers at a barbecue he began talking to his eventual co-founder, Stuart Gordon, about the environmental problem they’d solve if they had the ability to change things. They settled on plastics.
Working in Appleford’s laundry room they started developing the technology that would become Varden. That early laundry room-work in 2015 led to a small seed round and the company’s long slog to get an initial product in the hands of test customers.
Finagling some time with the New Zealand manufacturer Fisher and Paykel, the two co-founders put together an early prototype of their coffee pods made from sugarcane bagasse, a waste byproduct of the sugar feedstock.
“We worked backwards through customers to supply chain, which led us to material selection, which was something that would allow us to create a product that people understood,” said Gordon.
The production process has evolved to fit inside a 40-foot container that holds the firm’s machine, which takes agricultural waste and converts that waste into packaging.
Instead of using rollers like a paper mill, Varden’s technology uses a thermoform to mold the plant waste into a product that has the same properties as plastic.
It removes a complicated step that’s been essential to the current crop of bioplastics, which use bacteria to convert plant waste into plastic substitutes that are then sold to the industry.
“It looks like paper… you can tear it in half and it sounds like paper when you rip it, and you can throw it in the bin,” said Appleford.
Gordon said that the company’s containers are outperforming commodity based plastics. And the first target for replacement, the founders said, is coffee capsules.
“We went for coffee because it’s the hardest,” said Appleford.
It’s also a huge market, according to the company. Varden estimates there are more than 20 billion coffee pods consumed every year.
With the new money, Varden will begin manufacturing at scale to meet initial demand from pilot customers and is hoping to expand its product line to include medical blister packs in addition to the coffee pods.
“A pilot plant on the products we’re looking at is a pilot plant that can generate 20 million units a year,” said Gordon.
Both men are hoping that their product — and others like it — can usher in a generation of new sustainable packaging materials that are better for the environment at every stage of their life cycle.
“The next generation of packaging will be better… there are plant-based flexibles for your salads, for your potato chips… [But] the next generation of molded packaging is us… bioplastic will ultimately go.”
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European lawmakers propose a ‘right to repair’ for mobiles and laptops
The European Commission has set out a plan to move towards a ‘right to repair’ for electronics devices, such as mobile phones, tablets and laptops.
More generally it wants to restrict single-use products, tackle “premature obsolescence” and ban the destruction of unsold durable goods — in order to make sustainable products the norm.
The proposals are part of a circular economy action plan that’s intended to deliver on a Commission pledge to transition the bloc to carbon neutrality by 2050.
By extending the lifespan of products, via measures which target design and production to encourage repair, reuse and recycling, the policy push aims to reduce resource use and shrink the environmental impact of buying and selling stuff.
The Commission also wants to arm EU consumers with reliable information about reparability and durability — to empower them to make greener product choices.
“Today, our economy is still mostly linear, with only 12% of secondary materials and resources being brought back into the economy,” said EVP Frans Timmermans in a statement. “Many products break down too easily, cannot be reused, repaired or recycled, or are made for single use only. There is a huge potential to be exploited both for businesses and consumers. With today’s plan we launch action to transform the way products are made and empower consumers to make sustainable choices for their own benefit and that of the environment.”
The Commission said electronics and ICT will be a priority area for implementing a right to repair, via planned expansion of the Ecodesign Directive — which currently sets energy efficiency standards for devices such as washing machines.
Its action plan proposes setting up a ‘Circular Electronics Initiative’ to promote longer product lifetimes through reusability and reparability as well as “upgradeability” of components and software to avoid premature obsolescence.
The Commission is also planning new regulatory measures on chargers for mobile phones and similar devices. While an EU-wide take back scheme to return or sell back old mobile phones, tablets and chargers is being considered.
Back in January the EU Parliament voted overwhelmingly for tougher action to reduce e-waste, calling for the Commission to come up with beefed up rules by this summer.
In recent years MEPs have also pushed for the Ecodesign Direction to be expanded to include repairability.
The Commission proposals also include a new regulatory framework for batteries and vehicles — including measures to improve the collection and recycling rates of batteries and ensure the recovery of valuable materials. Plus there’s a proposal to revise the rules on end-of-life vehicles to improve recycling efficiency and waste oil treatment.
It’s also planning measures to set targets to shrink the amount of packaging being produced, with the aim of making all packaging reusable or recyclable in an economically viable way by 2030.
Mandatory requirements on recycled content for plastics used in areas such as packaging, construction materials and vehicles is another proposal.
Other priority areas for promoting circularity and reducing high consumption rates include construction, textiles and food.
The Commission expects the circular economy to have net positive benefits in terms of GDP growth and jobs’ creation across the bloc — suggesting measures to boost sustainability will increase the EU’s GDP by an additional 0.5% by 2030 and create around 700,000 new jobs.
The backing of MEPs in the European Parliament and EU Member States will be necessary if the Commission proposals are to make it into pan-EU law.
Should they do so, Dutch social enterprise Fairphone shows a glimpse of what’s coming down the repairable pipe in future…
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Plug and Play launches an accelerator to develop technologies addressing plastic waste
The Plug and Play network of accelerator programs is partnering with the nonprofit organization Alliance to End Plastic Waste to create an accelerator focused on developing technologies to reduce, remove or replace plastics in the industrial ecosystem.
Like Techstars, Plug and Play operates a number of industry-focused accelerator programs around the world, and for this program, targeting solutions that will lower the impact of plastic waste on the environment, the accelerator will operate two programs annually in three different regions — Silicon Valley, Paris and Singapore.
For its part, the Alliance to End Plastic Waste will work with the companies that support the organization, which include some of the largest chemical companies and manufacturers of plastic waste, to select focus areas and source specific startups working on solutions.
Representative members of the organization include: BASF, Berry Global, Braskem, Chevron Phillips Chemical Company LLC, Dow, ExxonMobil, Formosa Plastics Corporation USA, Gemini Corporation, Geocycle, Grupo Phoenix, Henkel, LyondellBasell, Mitsubishi Chemical Holdings, Mitsui Chemicals, PepsiCo, PolyOne, Pregis, Procter & Gamble, Sealed Air Corporation, Shell, Sinopec, SKC co., ltd., Storopack, SUEZ, Sumitomo Chemical, TOMRA and Total.
Industrial companies don’t have the best history when it comes to reinventing their entire business models with new technologies, but at least there’s some effort being put toward these initiatives.
Each program will run for 12 weeks and accept 10 startups. In true accelerator fashion there will be a demo day where AEPW and Plug and Play would have the opportunity to invest in participating companies.
“I believe when we bring together all the stakeholders—large corporations, entrepreneurs, startups, and universities—you can create real change,” said said Saeed Amidi, founder and chief executive of Plug and Play, in a statement. “By devoting resources and attention to this global issue of plastic waste, we can make a difference in the environment. Through this platform I commit to spend more of my time on sustainability-focused initiatives and will invest in 20 startups in this space per year.”
Applications are now open for the first program, which will run from February through May 2020.
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Oil and gas giants Chevron and Occidental are backing tech to combat carbon emissions
Carbon Engineering, a Canadian company developing technology to remove carbon dioxide from the atmosphere and process it for use in enhanced oil recovery or in the creation of new synthetic fuels, has locked in financing from two big industry backers — Chevron and Occidental Petroleum — to bring its products to market.
The undisclosed amount of capital Carbon Engineering raised from the investment arms of two of the world’s largest oil and gas companies — Oxy Low Carbon Ventures and Chevron Technology Ventures — will be used to commercialize its technology at a time when legislation in California and British Columbia are making low-carbon fuels more economically viable, according to a statement from the company’s chief executive, Steve Oldham. The company had already managed to nab Microsoft co-founder Bill Gates as an investor.
Gates is one of several big-name backers to be drawn to renewable energy technologies in the face of a steadily warming planet that’s rapidly approaching a tipping point of no return when it comes to global climate change. Together with a group of other multi-billionaires, including Marc Benioff, Jeff Bezos, Michael Bloomberg, Richard Branson, Jack Ma, Masayoshi Son and Meg Whitman, Gates launched a $1 billion fund called Breakthrough Energy Ventures last year to back companies that are developing things like new energy storage and water production technologies.
The Squamish, B.C.-based Carbon Engineering isn’t in the Breakthrough portfolio, but is one of several companies working on making economically viable a technology called “direct air capture” of carbon dioxide.
At the company’s pilot plant in Squamish, air gets hoovered up by giant fans into a processing facility where it is treated with potassium hydroxide, which captures and holds the carbon dioxide. Then more chemicals and heat are added to the mix to create millions of small white pellets — which contain higher concentrations of the carbon dioxide.
After that, the pellets are heated again to create a gas that is almost pure carbon dioxide. That gas can be either sequestered underground (a proposition with no economic benefit for Carbon Engineering at the moment) or converted back into fuels or chemicals, or used in enhanced oil recovery.
Carbon Engineering and competitors like ClimeWorks or Global Thermostat claim they can remove carbon dioxide from the atmosphere for roughly $100 per ton, or a bit less once they can get to scale. To make money though, they’ll need to refine that carbon dioxide into some sort of product — likely a fuel, which will return that carbon to the atmosphere.
Other companies tackling carbon capture, like Newlight Technologies and Opus12, convert the carbon into plastics or chemicals, while companies like CarbonCure aim to turn the captured carbon into a cement replacement.
While these products from carbon emissions are available, they’re not yet commercially viable at a significant scale. Oldham told National Public Radio that the fuel Carbon Engineering manufactures is roughly 20 percent more expensive than regular gasoline.
That’s why states like California are putting incentives in place to offset the added costs of using these low-carbon products.
Carbon Engineering has already spent $30 million to develop its process, while Climeworks raised $31 million last year to develop its own version of this carbon capture technology.
Not all climate watchers are convinced that these kinds of negative emission technologies are the answer. They argue that it’s less expensive to use renewable energy and other carbon-free energy sources than to take carbon dioxide out of the air.
At this point, though, emission reductions may not be enough. Given the dire reports coming out of the Trump administration and the Intergovernmental Panel on Climate Change, it’s going to take pretty much a combination of everything that humanity’s got to avoid a pretty catastrophic fate for a pretty large portion of the world’s population.
Even the companies that have been notorious for their contributions to the climate crisis that the world faces are waking up to the need for decarbonization (even if it’s an open question of whether they’re being dragged to the table or sitting down of their own free will).
Oxy Low Carbon Ventures is a good example. Reading the writing on the wall, the firm has invested not just in Carbon Engineering, but another company called NET Power, which purports to have developed a power plant with zero emissions.
“It is a very important time for the air capture field right now,” said Oldham in a statement. “We’re seeing leading jurisdictions, like California and British Columbia, creating markets for low carbon fuels and technologies like DAC, through effective climate policy. These efficient market-based regulations, and action from energy industry leaders like Occidental and Chevron, show the power of policy in driving innovation and achieving emissions reductions while delivering reliable and affordable energy.”
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We talk about hoofed spiders with the founder of Outlier clothing
Outlier’s founder Abe Burmeister is a designer who joined the world of clothing manufacturing over five years ago. His clothing – created with cutting edge fabrics – is touted as high-tech and very chic, but what frustrates Burmeister is how slowly the clothing industry is moving. His latest creation, a rolltop knapsack, uses a unique material to create one of the lightest… Read More
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