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Through a new partnership and $72 million in funding, LanzaTech expands its carbon capture tech

For nearly fifteen years LanzaTech has been developing a carbon capture technology that can turn waste streams into ethanol that can be used for chemicals and fuel.

Now, with $72 million in fresh funding at a nearly $1 billion valuation and a newly inked partnership with biotechnology giant, Novo Holdings, the company is looking to expand its suite of products beyond ethanol manufacturing, thanks, in part, to the intellectual property held by Novozymes (a Novo Holdings subsidiary).

“We are learning how to modify our organisms so they can make things other than ethanol directly,” said LanzaTech chief executive officer, Jennifer Holmgren.

From its headquarters in Skokie, Ill., where LanzaTech relocated in 2014 from New Zealand, the biotechnology company has been plotting ways to reduce carbon emissions and create a more circular manufacturing system. That’s one where waste gases and solid waste sources that were previously considered to be un-recyclable are converted into chemicals by LanzaTech’s genetically modified microbes.

The company already has a commercial manufacturing facility in China, attached to a steel plant operated by the Shougang Group, which produces 16 million gallons of ethanol per-year. LanzaTech’s technology pipes the waste gas into a fermenter, which is filled with genetically modified yeast that uses the carbon dioxide to produce ethanol. Another plant, using a similar technology is under construction in Europe.

Through a partnership with Indian Oil, LanzaTech is working on a third waste gas to ethanol using a different waste gas taken from a Hydrogen plant.

The company has also inked early deals with airlines like Virgin in the UK and ANA in Japan to make an ethanol-based jet fuel for commercial flight. And a third application of the technology is being explored in Japan which takes previously un-recyclable waste streams from consumer products and converts that into ethanol and polyethylene that can be used to make bio-plastics or bio-based nylon fabrics.

Through the partnership with Novo Holdings, LanzaTech will be able to use the company’s technology to expand its work into other chemicals, according to chief executive Jennifer Holmgren. “We are making product to sell into that [chemicals market] right now. We are taking ethanol and making products out of it. Taking ethylene and we will make polyethylene and we will make PET to substitute for fiber.”

Holmgren said that LanzaTech’s operations were currently reducing carbon dioxide emissions by the equivalent of taking 70,000 cars off the road.

“LanzaTech is addressing our collective need for sustainable fuels and materials, enabling industrial players to be part of building a truly circular economy,” said Anders Bendsen Spohr, Senior Director at Novo Holdings, in a statement. “Novo Holdings’ investment underlines our commitment to supporting the bio-industrials sector and, in particular, companies that are developing cutting-edge technology platforms. We are excited to work with the LanzaTech team and look forward to supporting the company in its next phase of growth.”

Holmgren said that the push into new chemicals by LanzaTech is symbolic of a resurgence of industrial biotechnology as one of the critical pathways to reducing carbon emissions and setting industry on a more sustainable production pathway.

“Industrial biotechnology ca unlock the utility of a lot of waste carbon emissions. ” said Holmgren. “[Municipal solid waste] is an urban oil field. And we are working to find new sources of sustainable carbon.”

LanzaTech isn’t alone in its quest to create sustainable pathways for chemical manufacturing. Solugen, an upstart biotechnology company out of Houston, is looking to commercialize the bio-production of hydrogen peroxide. It’s another chemical that’s at the heart of modern industrial processes — and is incredibly hazardous to make using traditional methods.

As the world warms, and carbon emissions continue to rise, it’s important that both companies find pathways to commercial success, according to Holmgren.

“It’s going to get much much worse if we don’t do anything,” she said.

Online catering marketplace ezCater gets another $150M at a $1.25B valuation

In 2007, Stefania Mallett and Briscoe Rodgers conceived of ezCater, an online marketplace for business catering, and began building the company in Mallet’s Boston home, mostly at her kitchen table.

Recently, sitting at that same table, Mallett negotiated with Brad Twohig of Lightspeed Venture Partners the final terms of a $150 million Series D-1 at a $1.25 billion valuation. Lightspeed, alongside GIC, co-led the round, with participation from Light Street Capital, Wellington Management, ICONIQ Capital and Quadrille Capital.

“Raising money or getting to unicorn status, it’s all nice validation but that’s not the purpose, the purpose of being in business is to grow a very successful company with happy customers and happy employees,” Mallett, ezCater’s chief executive officer, told TechCrunch. “We are going to have cupcakes with unicorns on them. That will take us about a half hour, then we will get back to work.”

EzCater co-founder and CEO Stefania Mallett

Mallett compares ezCater to Expedia . The travel company doesn’t own and operate hotels, nor do they create them. EzCater, similarly, works with 60,500 restaurants and caterers around the U.S. to fulfill orders, but at no point do they work directly with food nor make any deliveries themselves.

Since its inception, the ezCater marketplace has grown considerably, expanding 100 percent annually for the last eight years, Mallett tells us. Though, like most unicorns, ezCater isn’t profitable yet.

Both Mallett and Rodgers are software industry veterans, establishing engineering careers prior to tackling business catering. The pair bootstrapped the company until 2011, when they secured a small Series A investment of $2.7 million. That same year, U.S. foodtech startups raised $176 million, per PitchBook. EzCater would go on to raise more than $300 million in equity funding, including its latest round, and VC interest in foodtech would explode. Already this year, U.S. foodtech startups have brought in $626 million after pulling in a whopping $5 billion in 2018.

EzCater has benefited from this boom. The company raised a $100 million Series D just 10 months ago.

“We really didn’t need the money, we have quite a lot of money in the bank from the last round,” Mallett said. “There was so much talk of a funding winter and a recession coming so we said maybe we should try to raise money and then people jumped on it so we thought OK, why not? If there is a funding winter, we’re set; if not, well, we are still set.”

The investment comes hot off the heels of ezCater’s acquisition of Monkey Group, a cloud platform for take-out, delivery and catering. Mallett declined to disclose terms of the deal but said the partnership makes ezCater the indisputable market leader in catering management software. The company will use its recently expanded war chest to accelerate its international expansion and, potentially, continue its M&A streak. As for the future, an initial public offering is amongst the possibilities.

“We certainly are considering it,” Mallett said. “As we’ve grown, we’ve become more sophisticated and mature; that puts us in a good position to continue operating as a successful standalone company or be acquired by a public company or go public if we see an opportunity to do that. We are not wedded to any of these outcomes.”