Origin Materials Hits the Billion-Dollar Bigtime

Origin Materials Hits the Billion-Dollar Bigtime

The web is abuzz with the news that local startup Origin Materials is going public at a $1.8 billion valuation.  This is the first clean tech unicorn in the region and is deservedly getting lots of attention.  This is a huge accomplishment for John Bissell, Ryan Smith, Rich Riley, Nate Whaley, and the whole team.  It is hard to overstate what a big jump this is for them.  As well, it is going to focus a lot of attention on this region from investors looking for more hidden gems.  It is one of those big “proof points” that create credibility for the region as a good hunting ground for cleantech stars.  See their full press release.

This is no overnight success.  It represents a decade and a half of hard work, persistence, and a willingness to adapt.  The whole story begins sometime around 2006 with an engineering student team looking into a research project at UC Davis.  By 2008, the team had won an $85,000 EPA grant, paired it with a $200,000 angel investment, and launched Micromidas to pursue making chemicals used for making plastic containers from sewage sludge through a microbial conversion process.  In 2010, they raised $3.6 million, in part to fund a switch to a much different chemical conversion process they saw as having a better yield and based on a better raw material—wood and cardboard waste.  

Converting wastes to some commercial product was not a new idea, but the conversion was usually into electricity or methane.  In reality, these are pretty low-value products.  The genius idea of the team was to convert the materials into high-value chemicals that could exactly replace the same chemicals made from petroleum and create zero net carbon bottles and containers.  

By January 2013, they raised $16+ million more and gotten interest from some big global strategic investors.  In October 2016, they raised $40 million from a consortium that included Nestle and Danone, and moved into commercial production of small volumes of their product slate, renaming the company Origin Materials along the way.  Two years later PepsiCo joined in, probably adding more cash. 

We hadn’t been able to learn much more about them since 2018 but were thrilled to see this morning’s announcement.  They are raising $925 million in net proceeds from a special transaction that will end up making them a public company trading under the symbol ORGN.  The way they did this is to be acquired by a Special Purpose Acquisition Corporation or SPAC called Artius Acquisition Inc.  Artius had gone public in July 2020 and raised $630 million basically on a promise to find a good company to acquire.  Typically, a SPAC has no significant operations and no assets.  It is just a mound of cash and a hunting license.  They bagged Origin, brought in more private investment from the existing consortium, and resulted in Origin having a valuation of $1.8 billion.  Pretty good outcome for the students from long ago.  

What will they do with all that cash?  Usually, this sort of thing is done in order to do a major scale-up of manufacturing.  They will likely leverage this with debt to get the needed warchest.  It is doubtful that the manufacturing plant will be in our area, but nothing has been announced.  Watch for it.

It’s a great success story for the team, for the region, and for UC Davis.  It is a good example of what it takes and how long it takes.  How many pitches did it take to keep the company going and raising so many rounds?  How difficult was it to make the pivot in the whole process?  How many disappointments were there along thy way?  Obviously, it took a lot of patience and persistence.  But it had a good outcome.  

We think there will be many more companies with great stories as well from this region.  It just takes time. 

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Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

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Moss AdamsPowerSoft.biz, Greenberg Traurig, Momentum,

College of Engineering & Computer Science at Sacramento State

Infinium Closes the Carbon Cycle

Infinium Closes the Carbon Cycle

Join CleanStart’s Perspective with Robert Schuetzle on March 18th

We gave a big cheer to the January 26 announcement that Greyrock Energy had closed a substantial Series A round for its sister company Infinium, with heavy-hitter investors Amazon, Mitsubishi, and AP Ventures.  The amount was not disclosed, but this trio does not make small investments.

As notable as this launch was regionally, it is an even bigger deal in the quest for fuels that do not contribute to climate change.  And it is a great story of the vision and persistence of a father and son  and a good one to show what the entrepreneurial journey is like.  It is worth putting all that in context.  

In 2003, Dr. Dennis Schuetzle retired from Ford Motor Company as a VP of International R&D and brought his passion for sustainable fuels to Sacramento.  He had a vision of making clean liquid fuels for vehicles and airplanes from renewable sources.  He led a team to look at every biomass and waste gasification and conversion processes in the world in order to find the best of them.  It was a massive effort, but it uncovered some nuggets.  Dennis’ first attempt at the realization of his vision was a company founded in 2006 to convert ag waste biomass into fuel—Pacific Renewable Fuels—originally based in McClellan Park.  PRF demonstrated a small gasifier linked to a liquid fuels production unit.  Soon he convinced his son, Robert, a successful digital media entrepreneur, to join him and become CEO.  In 2011, Robert steered a merger with an Ohio-based biomass company to form Synterra Energy to advance the waste-to-fuels (and chemicals) technology. Synterra successfully demonstrated the technology at a larger scale and with better conversion results.

To that point, the efforts had mostly been funded by federal and state grants and contracts.  But father and son realized that to grow would require significant investment only available from the private sector.  They needed to find something that was immediately commercial.  What was closest to that mark was the conversion of hydrogen-rich syngas into clean diesel fuel.  Producing a consistent clean stream of syngas (which is hydrogen and carbon monoxide) from biomass was a daunting challenge.  But it was easy to get a clean feed of syngas from natural gas.  That was a commercially available technology; nothing new there.  What was new was a focus on putting modular plants on remote natural gas wells or remote oil wells that were flaring natural gas to produce clean diesel fuel.  That was a source of gas that was being wasted and adding uselessly to the Greenhouse gas burden. The plants were so remote that converting the gas into electricity made no sense.  A beefy enough power grid adequate to accept what a power plant would produce was far away and too expensive to extend.  Producing a liquid fuel that could be stored in tanks and picked up by tanker trucks occasionally was a much better option.  Greyrock Energy was then born.  

Greyrock got immediate attention, collected substantial investment, and now has placed its technology in ten plants either in operation or under construction.  Customers were very satisfied with the clean liquid fuels part of the technology.  But using natural gas as the raw feedstock was not really making the kind of sustainable fuel that would have a big impact on climate change.  The feedstock really needed to come from something renewable.

Advances in splitting hydrogen using cheap renewable electricity and in capturing carbon dioxide provided the next stepping stone.  Now the clean diesel can be made from renewable sources.  That is the foundation of what Infinium will do, and why the big investors are so interested.  It will recycle carbon dioxide back into the fuel and close the carbon cycle.  It makes a zero net carbon fuel that can be used in existing vehicles and distributed through existing infrastructure.  That is especially significant for making aviation fuel, something Amazon clearly likes.  We have commented before that this could be a faster path to decarbonization than converting all vehicles to electricity.  So to us, that is the most significant consequence of the launch of Infinium.  

Apparently, CNBC agrees, picking up the story and sending it out nationwide.  That’s a first for our cleantech community as well.  Congratulations to Dennis and Robert!  It’s been 18 years, but worth it.  Most of your original vision is now in place. No wonder you are so excited.

You can learn even more by visiting Infinium’s new website.  Note the cool logo, too.

Follow us on Social Media to keep upto date!

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStart’s Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | TobinBlueTech Valley, Revrnt, 

Moss AdamsPowerSoft.biz, Greenberg Traurig, Momentum,

College of Engineering & Computer Science at Sacramento State

One Step Closer to a Five Minute EV Charge

One Step Closer to a Five Minute EV Charge

An Israeli company called StoreDot has just announced it has made 1000 samples of its lithium-ion battery variant available for commercial testing to prove it can be recharged in five minutes.  These are small batteries, but big enough that the company believes they can make their point.  Their breakthrough is in replacing the usual graphite anodes with metalloid nanoparticles.  Ultimately the company wants to move to a “silicon-dominant” anode structure but believes this current step is enough to be attractive to certain battery applications like scooters and drones.
EVE Energy in China is StoreDot’s manufacturing partner.  They indicate the new batteries can be produced on standard lithium-ion manufacturing equipment, which could be a very important feature for rapid adoption.
Take a look at their press release.  It has a link to an interesting video.
Remember that fast charging will also require high-voltage chargers and connections to the power grid at a level or in a way that does not cause voltage sags on the system, so some innovations will be necessary.  Nevertheless, the prospect of being able to get a full recharge in about the time it takes to get a full fuel tank on a conventional vehicle is huge.
Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | TobinBlueTech Valley, Revrnt, 

Moss AdamsPowerSoft.biz, Greenberg Traurig, Momentum,

College of Engineering & Computer Science at Sacramento State

Bolton eBikes:  A Lesson in Building a Fast-Growing, Successful Business

Bolton eBikes: A Lesson in Building a Fast-Growing, Successful Business

It is unusual to find a hardware-based cleantech company that can grow rapidly, but Kyle Chittock, the founder of Bolton eBikes, has done just that.  Located in Grass Valley they are growing exponentially, selling bikes across the US.  Their revenue grew 469% in 2019 and 580% in 2020.  Our Feb. 2nd Perspectives online session with Kyle is a must-watch to find out just how he did that.  See the video here below.

As with many entrepreneurs, Kyle did not start out with the product he now sells so successfully.  He had to pivot.  His first product was the “Velomobile”, one of those bikes enclosed in an aerodynamic shell.  While it was super-efficient and protected the rider from the elements–no one cared.  So Kyle took a step back and began to sell parts to convert bikes to electric drive or to upgrade existing e-bikes.  That gave customers better range, safer brakes, and a better experience.  Then he began to explore what other manufacturers were selling in the way of e-bikes to get an idea of what people liked.  He arranged to sell those bikes through his website and build his presence.  When he thought he was ready, he launched his own line building what he thought people would find cool, and went from there.  

He found there were no manufacturers of bicycle parts in the US, so he has parts delivered to several assemblers in China.  He has a machine shop and is starting to build some parts locally as a backup.  What he discovered was that e-bikes are so popular worldwide that the lead time on the parts he needed was about 500 days.  E-bikes may be popular, but no one will wait for what turned out to be close to two years for the products.  So again he needed to figure it out. He would like to see more parts come from US sources.  There clearly is an opportunity there, but it won’t change things right now. 

He now orders the parts overseas and gets a flow going to the assemblers in advance of getting actual orders.  Then he takes orders with a 4-6 month promised delivery time, which customers seem to tolerate.  The orders are coming in fully paid, so he uses that to generate the cash flow to cover the advance purchase of parts.  He has taken in no outside investment.  He uses the cash flow from the still on-going parts business and a little of his own money.  His advance sales are sold out.  His revenue is growing rapidly.

So where did the name come from?  Kyle found out the first electric bike was patented in the US in 1895 by Robert Ogden Bolton.  He thought that was a cool name.  Sort of conjured up “lightning bolts”.  And Kyle discovered he had a long-ago relative with the name Bolton.  And so Bolton eBikes was born.  

The bikes weigh 60 pounds on average and are priced at $1500 to $5000, which is pretty modest in the world of electric bikes.  But the price is not the major driver of sales. Kyle cleverly started doing YouTube videos about his bikes and the whole adventure of e-biking.  That now gets him over 10,000 views per day, with 44,000 new subscribers just last year–huge in the world of online marketing.  He highlighted that it didn’t come overnight, but was the cumulation of years of continually posting and sharing what he was working on.  Now he is also doing an online weekly podcast with 6,000 downloads per month.  He’s an online star, and as he puts it YouTube now pays him to put content on his channel.  That’s right.  He gets paid for doing his marketing because it builds volume on YouTube.  Plus he uses the channel to test out new ideas, talking about new concepts, and getting active feedback from the discussion.  This is customer discovery, one of the most important parts of building a successful business. 

He now has many models, is designing more in his studio, and continues to sell products he likes from other manufacturers.  If you Google electric bikes you will find that there are dozens of sellers out there.  But Kyle is making his distinctive mark.

Check out his website at www.boltonebikes.com and then watch his videos.  You will see his bikes are definitely cool.  He has really done a great job.  He is a long-time resident of Grass Valley and graduated from the Mechatronics Program at Sierra College.  Clearly a home-grown success story.  

We are able to put on these perspectives with the support of the College of Engineering and Computer Science at Sac State.  Make sure to check out what they are working on. Join us for a future Perspectives event and get more insights into our cleantech stars around the region.  

 

Thomas Hall

ABOUT THE AUTHOR

Thomas is the Executive Director of CleanStart. Thomas has a strong background in supporting small businesses, leadership, financial management and is proficient in working with nonprofits. He has a BS in Finance and a BA in Economics from California State University, Chico. Thomas has a passion for sustainability and a commitment to supporting non-profits in the region.

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Hot New Business Opportunities in DER Management?

Hot New Business Opportunities in DER Management?

At our MeetUp on January 28, three speakers talked about their experiences in installing and integrating distributed energy resources (DERs) in the grid and offered some fresh insights.  We heard from Lowell Watros and John Franzino of GridSME (“Grid Subject Matter Experts”) and Tim McDuffie of Smarter Grid Solutions.  Here are some of the highlights of that very interesting discussion:

  • The need for much faster-response assets on the grid has been growing enormously and it has been hard for DERs to keep up.
  • By the nature of the DERs and the number of entities involved in managing them, the DERs need to be connected to the internet.  Connections over dedicated communication lines is just not practical.
  • As a result, there is a critical need for excellent cybersecurity.
  • For DER assets deep in the distribution system and often in rural areas, communication may be dependent on RF systems, which are slow and noisy.  This limits what those resources can do and be compensated for. 
  • DERs are not being fully compensated for all the value they bring to a system such as capacity value in addition to energy value, and the value of avoiding distribution system upgrades.  However, there is still concern over the reliability of DERs providing those values and with a quick enough response. 
  • There is a big gap in the systems and protocols for effective DER management that is holding back the next wave of DER investment and installations.  Europe is probably ahead of the US in creating such systems.
  • The US systems are a hodge-podge of rules for DERs and there is not enough motivation to create consistent rules and procedures with full compensation for the values provided
  • There may be an emerging role for more flywheel systems as very fast-response assets within DER systems.  This is different than using flywheels for energy storage in competition with batteries.  Flywheels can inject of absorb power very quickly, smoothing-out fluctuations from DERs in very short intervals.
  • There is a new horizon in integrating more behind-the-meter DER assets into the distribution grid, but it will require excellent communication systems and fast response equipment. Tim McDuffie specifically talked about a project to enhance the reliability of service to the Hoopa Valley Tribe east of Eureka which sits at the end of a long, single distribution feeder.

We could go on and on with all of the insights packed into this 90-minute discussion, but you can learn all about it by checking out the video.  One participant who had been with a number of utilities and dealing with DERs said he found the panelists much more knowledgeable and thought-provoking than he had seen with other online discussions.  That’s high praise and a good indication of why you should play the recording.  This is such a hot topic, we have had three prior sessions on it and likely will have many more.

Many thanks to our panelists and to all those who joined in. 

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | TobinBlueTech Valley, Revrnt, 

Moss AdamsPowerSoft.biz, Greenberg Traurig, Momentum,

College of Engineering & Computer Science at Sacramento State