- Sustainable chemicals start-up Solugen has raised $ 357 million in a venture funding round led by Singapore’s sovereign wealth fund GIC, and Baillie Gifford, joined by several other funds focused on solving the climate crisis.
- The company manufactures chemicals from custom enzymes and renewable raw materials. It uses dextrose, a simple sugar, and in the future aims to convert carbon into useful products like formaldehyde-free building materials and resins.
- The chemical industry is the third largest contributor to global carbon emissions, according to the most recent data from IEA research.
Sustainable chemicals start-up Solugen has raised $ 357 million in a venture funding round led by Singapore’s sovereign wealth fund GIC, and Baillie Gifford, joined by several other funds focused on solving the climate crisis.
The company manufactures chemicals from custom enzymes and renewable raw materials. It uses dextrose, a simple sugar, and in the future aims to convert carbon into useful products like formaldehyde-free building materials and resins.
The chemical industry is the third largest contributor to global carbon emissions, according to the most recent data from IEA research.
Chemical companies have historically used oil, natural gas, and phosphates to make their products, exacerbating air and water pollution.
A start-up called Solugen aims to replace many of these ingredients with chemicals using renewable resources like simple sugar.
Co-founded in 2016 by CEO Gaurab Chakrabarti and CTO Sean Hunt, Solugen designs and grows enzymes that can convert sugar into chemicals that are needed to make a variety of products and are used in many industrial applications.
The company’s bio-based chemical offering already includes water treatments, a chemical that makes concrete stronger, another that makes fertilizers more efficient, and detergents that are strong enough to clean a locker room or locker room. Gentle enough to be used in facial wipes.
“The chemical industry accounts for a few percentage points of global greenhouse gas emissions. Zeroing CO2 from the chemical industry cannot happen fast enough,” said Clay Dumas, partner at Lowercarbon Capital.
Lowercarbon is one of several venture firms participating in a new $ 357 million round, along with Singapore’s sovereign wealth fund, GIC, and investment management company Baillie Gifford. The deal brings Solugen’s valuation to more than $ 1.8 billion and its total capital raised to more than $ 400 million.
Solugen cites IEA estimates that chemical production, dominated by sinopec, BASF and Dow Chemical, contributed an estimated 880 million tons of carbon dioxide to the atmosphere in 2018, making the chemical industry the third largest source. largest global CO2 emissions that year.
Most of the chemicals used for industrial purposes in the United States are also imported from China, and shipping contributes more greenhouse gas emissions to its overall environmental footprint.
Corn Syrup Chemicals
Rather, Solugen manufactures its chemicals in the United States from domestic ingredients. He buys corn syrup from wet mills in Iowa, for example, and operates a factory outside of Houston that was the site of a petroleum wax distillery that exploded in 2005.
The Bioforge, as Solugen calls the facility, occupies just 20,000 square feet and produces 10,000 metric tons of chemicals annually. Some of the equipment came from a candy maker, says CTO Hunt. He says employees moving from traditional petrochemical companies love the cleaner environment.
Investors hope the company will use the cash infusion to “copy and paste” the Bioforge and establish similar plants around the world.
The company also aims to aggressively recruit, the co-founders said, as it continues to develop new molecules using the cell-free synthetic biology techniques that led to its early success in water treatment.
According to CEO Chakrabarti, Solugen has focused on water treatment chemicals because startups had largely ignored the “not sexy” industry but desperately needed an environmental makeover.
Water cooling towers and wastewater treatment facilities, Chakrabarti said, use unhealthy chemicals for cleaning and maintenance. Some, made with phosphonates, even contribute to algal blooms. “It was shocking to learn that these chemicals are not the cleanest, because they end up in our water supply. We wanted to make them safer and cheaper at the same time,” he said.
Solugen introduced its BioChelate water treatment made from plain sugar, a dark brown liquid that Hunt keeps in a vial on his desk, in 2020. It now sells BioChelate to a network of water treatment service providers who transport and pump it to your customers’ water pipes and systems, while monitoring water quality to keep it clean.
“If you use our chemistry, you protect the internal linings of the water infrastructure,” Hunt said. “This prevents your pipes from rusting and corroding, clogging with limescale, or letting biofilms like Legionella live in the water. All of this prevents pipes from catastrophic ruptures and leaks. It works on anything that’s a metal surface. “.
Investors love the fact that Solugen is already operational, not just making forward-looking statements about how they will save the planet, said Seth Bannon, a founding partner at investor Fifty Years, who also participated in this funding round.
“Solugen is the first synthetic biology company with a demonstrated ability to scale both its sales and its own manufacturing,” he said, contrasting it with Zymergen, whose stock recently plunged nearly 70% when the company revealed it was having trouble scaling its business. manufacture and expand sales.
Solugen also has enormous potential to develop new molecules to “further decarbonize chemicals,” Bannon said.
For example, Chakrabarti and Hunt said that Solugen wants to use its enzymes and chemical processes for “carboligation,” or converting carbon dioxide into useful products, especially building materials, formaldehyde-free resins and new types of plastics.
Others who joined the funding round include Temasek Holdings, funds managed by BlackRock and Carbon Direct Capital Management.
