Siluria Technologies, the San Francisco startup developing a low-emissions technique for making the world’s most widely used commodity chemical in plastics, has raised its first big venture round to pursue an idea that has eluded the petrochemical industry for decades.
The company, built on technology from Angela Belcher’s materials science lab at MIT, is announcing today it has scooped up $13.3 million in a Series A venture round. The investor syndicate includes Alloy Ventures, Arch Venture Partners, Kleiner Perkins Caufield & Byers, Altitude Life Sciences Ventures, Lux Capital, and Presidio Ventures.
Siluria, which I profiled back in August, is working on creating catalysts that can efficiently convert a cheap and abundant raw material (natural gas) into a ubiquitous ingredient found in plastics (ethylene). For decades, this product has been produced through a high-energy process known as “steam cracking” that heats up petrochemicals to between 800 and 900 degrees Celsius to “crack” the hydrocarbon into an intermediate byproduct that can become ethylene. Siluria’s idea is to create a new catalyst that will make it possible to produce the same ethylene at a far lower temperature—wasting a lot less fossil fuel and creating much fewer greenhouse gases along the way.
About 140 million metric tons of ethylene is produced worldwide every year, as an ingredient in all sorts of everyday products like water bottles, cosmetics, eyeglasses, and the hard plastic casings in a laptop computer. If Siluria can turn this idea into a reality, it will be in position to tap a market worth about $160 billion a year.
“We have gone from a scientific experiment to an execution-stage startup,” CEO Alex Tkachenko says.
The big challenge for Siluria was to show it could make a more efficient catalyst, Tkachenko says. That means showing it can set up chemical reactions which consistently produce the maximum amount of ethylene, while minimizing what gets lost as excess carbon dioxide. The big break for Siluria came in the past few months, when it showed it could lower the natural gas-to-ethylene conversion temperature by “several hundred degrees” Celsius, Tkachenko says.
It’s important to note this is all still at a very early stage of development. The company has built up a portfolio of a number of different potential catalysts, and is seeking to tweak variables here and there on each of them until it settles on what it considers the optimal one. The company hasn’t yet described its process in a peer-reviewed scientific journal, although it plans to do so in the future, Tkachenko says.
Siluria has grown to about 20 employees with the latest financing, and is still on the lookout for talented chemists and chemical engineers, Tkachenko says. One of the key hires in recent months is Sam Weinberger, who has more than 30 years of experience with Exxon Mobil, including a decade as head of the oil giant’s North American ethylene business. Weinberger, a senior advisor to Siluria, isn’t quite full-time, but close, Tkachenko says. “Getting Sam on board is a great coup for us,” he says.
The next steps for Siluria are pretty straightforward. The company will continue its work on optimizing its experimental catalysts. “We are going to hit the level of performance required for commercial viability sometime next year,” Tkachenko says. If that happens, then Siluria will work through a “pilot” phase where it will scale up the process and put all the engineering pieces of the puzzle together, getting the right balance of heat, energy, and materials, Tkachenko says.
Given how huge an industrial challenge we’re talking about, $13.3 million or even bigger venture rounds are basically chump change. So at some point, big oil and gas or chemical partners will have to get involved. Siluria has already attracted some interest from people in a number of different industries, who are keeping an eye on its progress. Now it’s up to Siluria to show it can do what it says it’s going to do.
“We are off to the races, we are executing,” Tkachenko says.
