Carbon monoxide and carbon dioxide get a bad rap. Sure, the first is a silent killer that binds to hemoglobin and suffocates people in burning buildings, and the second is poisoning our atmosphere and driving global temperatures out of control. But did you know that they can also be used to make plastic?
Back in November 2007, I wrote one of the first press stories about Novomer, a startup then based in Ithaca, NY, that was beginning to exploit a novel catalyst discovered by a Cornell chemist to transform CO and CO2 into various types of packaging materials and other plastics. The company moved its headquarters to Boston last October, and as we reported on Monday, it has now raised an additional $14 million in venture funding, with Kirkland, WA-based OVP Venture Partners leading the round.
So it seemed like a good time to check in with the company, whose proprietary zinc-based catalyst prompts CO and CO2 to react with petroleum-based compounds called epoxides to form several important types of plastic used in packaging, coatings, medical implants, absorbent materials, and injection-molded products such as the cases for cell phones and computers. Novomer CEO Jim Mahoney says the company is close to announcing partnerships with major consumer-goods companies that will put its technology into production, making “pretty much all the types of plastic you touch on a daily basis.”
Mahoney says the latest venture round—which brings the company’s total funding to about $21 million—gives the company the cash it needs to ramp up its production process, buy raw materials, and design new products in conjunction with partners. “I wish I could give you the names now, but we’re right on the cusp of some pretty big partnerships, and I hope to be able to talk about them at the beginning of the year,” Mahoney says.
One of the processes the company is developing, Mahoney says, is a new way to use carbon monoxide as a feedstock to make acrylic acids, the super-absorbent polymers used in products such as disposable diapers. “We can make very cost-effective acrylic acids, and this is the most environmentally responsible way to make it,” he says. And, as with anything having to with diapers, “It’s a big market,” says Mahoney.
Indeed, what green-minded consumer wouldn’t choose products made using cheap, abundant materials that would otherwise escape into the environment? (In the case of Novomer’s CO2-based plastics, the process also helps to sequester a greenhouse gas.) Novomer’s challenge, according to Mahoney, isn’t persuading potential partners that the company’s technology is more sustainable and eco-friendly than conventional ways of making plastics—it’s convincing them that the end products perform just as well, and that they won’t cost more.
“Some people look at the sustainability aspects first and want to make sure they are significantly more responsible, then they move on to performance and economics,” Mahoney says. “Other companies will look at the economics first. We have to deliver on all of those, and so far we have been able to demonstrate that. But fortunately many consumer-goods companies are really starting to demand these materials, because their customers want them—as long as they don’t have to pay more.”
While OVP Venture Partners has several cleantech companies in its portfolio, it isn’t particularly well known for investing in materials companies (an exception being Seattle-based EnerG2), nor in East Coast firms. OVP managing director Carl Weissman says the Novomer deal came about primarily because of his longtime relationship with Mahoney, who was his boss at Bothell, WA-based chemical firm Prolinx from 1998 to 2001. “Normally we’re Pacific Northwest or West Coast” in focus, says Weissman, who has joined Novomer’s board as a result of the funding. “The only reason to stretch that thesis is the excitement about the opportunity—and the relationship I have with [Mahoney] will allow me to monitor the company’s progress.”
There’s one other Novomer-OVP connection: Novomer’s proprietary catalyst was discovered by Geoffrey Coates, a professor in Cornell’s chemistry department, where OVP managing director Gerry Langeler got his undergraduate degree. Langeler will be an observer on Novomer’s board.
Novomer’s Series A investors—Flagship Ventures of Cambridge, MA, Physic Ventures of San Francisco, and DSM Venturing of the Netherlands—have all returned for the Series B round. “It’s a nice syndicate to invest with,” says Weissman. “I’ve known people at Flagship and Physic for a while. It’s my first opportunity to invest with them at OVP.”
With reporting from Seattle by Greg Huang.
