If you are in the cleantech sector and had not previously heard about Lanzatech, you likely have now. The company raised a big, $55.8M round last week that has been widely applauded and covered. Students of the company had seen this coming for awhile. Lanzatech was the highest ranking company in the Asia Pacific region in our Cleantech 100 survey earning it “APAC Company of the Year” at our gala banquet last year. It was featured as part of GTM’s Trendspotting post on the Top 12 Greentech Startups to Watch in 2012. We’ve made Lanzatech our featured “Company of the Week” in i3 this week, but it may just turn out to be cleantech’s company of the year (and its only January!). Here are the top reasons that I think Lanzatech exemplifies a number of key themes happening in cleantech:
1.) Cross-Border Financings – I have previously written about Chinese and Korean investors taking large stakes in Western cleantech companies. Now we can add the Malaysians to that list. The round was led by the Malaysian Life Sciences Capital Fund and included participation from Malaysian state oil company, Petronas. With the US venture community still experiencing Solyndra shell shock (yesterday’s Ener1 bankruptcy won’t help), I expect this international trend to continue.
2.) Companies Without Borders – For all of the jingoistic rhetoric spouted by politicians around the world about competing on a national basis, borders are increasingly irrelevant to entrepreneurs. Lanzatech is headquartered in the US, has an Australian development team with announced collaborations with European research partners, and has major customers in China & India. It’s no surprise that the second sentence of Lanzatech Co-Founder Sean Simpson’s bio is not about his technical achievements, but the fact that he “spent the first 12 years of his life living in various countries around the world, including Mauritius, Zambia and Gibraltar.” If you want to compete in the cleantech market today, you better be prepared to spend plenty of time in flight.
3.) Sustainable Skies – Speaking of spending time in flight, sustainable aviation is becoming an increasingly critical topic amongst global executives. Yes, the European carbon tax on airlines is driving some of this discussion, but the more salient, long-term theme is that the world is becoming inextricably flattened by the combination of networking technology and jet travel. This makes access to sustainable, clean jet fuel a strategic imperative. As Greg Lindsay and John Kasarda outline in their book, Aerotropolis (a must-read book that I have become not so quietly obsessed with), “the product of the Jet Age and the Net Age is our current Instant one, simultaneously favoring aggregation and dispersal.” The argument is that the world is fast becoming a network of urban nodes and that convenient, accessible, and yes, clean, air travel is as important to this revolution as the internet. Not surprisingly, Lanzatech tops the lists of aviation biofuel suppliers on a new site, RenewableJetFuels.org, launched by Richard Branson’s Carbon War Room.
4.) Converting waste from a cost to a profit center – Lanzatech’s secret sauce is the ability to convert industrial waste gas streams from heavy polluters such as such steel mills and oil refineries into biofuels. The quest to turn a variety of waste streams – from flue gas to wastewater to municipal solid waste – has attracted significant investment over the past 36 months. As these technologies scale and costs come down, they are beginning to reverse the fundamental economics of waste. When companies are no longer paying to haul trash to a dump or buying credits to offset emissions, but rather being paid to deliver waste or carbon as a feedstock, we will have reached a fascinating inflection point.
Congrats to the team at Lanzatech on the new round! Given how closely the company seems tied to the macro themes driving the cleantech sector, we all should be rooting for them.
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