An Ottawa cleantech firm on a self-described mission to “turn dirty air into dollars” is turning investors’ heads with its groundbreaking technology that converts greenhouse gases emitted by heavy industry into products that can be used in everything from green building materials to toothpaste.
Hyperion Global Energy says its patented system will be ready for market before the end of this year.
Nearly a decade in development, the technology has caught the eye of industrial giants such as European cement producer LafargeHolcim. Hyperion, which is based out of Invest Ottawa’s accelerator at Bayview Yards, is now in talks to install prototypes of its “carbon recycling” modules in LafargeHolcim’s plants, where the system will collect CO2 from factory smokestacks and turn it into valuable materials such as calcium carbonate.
Hyperion’s bid to stand out in a crowded field of carbon-capture contenders got a big boost recently when it closed a seed funding round worth nearly $2 million. President and co-founder Heather Ward says that after years of toiling in the shadows, the company is ready to make its mark on the green economy.
“We feel like it’s coming to a tipping point now,” she says. “Industry is asking for these solutions. It’s a massive market, and we hope to take a large piece of that market share once we’re into commercial operations.”
The Capital Angel Network contributed almost $800,000 to the new seed round, the local organization’s largest-ever single investment. Other contributors include the Natural Gas Innovation Fund, a group comprised of key players in Alberta’s energy sector such as Enbridge and Shell, and the Norway-based Equinor & Techstars Energy Accelerator, which chose Hyperion to be one of just 10 firms from around the world to take part in its 2021 cohort.
Investors' focus changing
Capital Angel Network executive director Nolan Beanlands says that after decades of pouring money into networking hardware and software-as-a-service ventures, investors are waking up to cleantech’s potential as industries everywhere take steps toward a carbon-neutral future.
Sensing opportunity, ingenious entrepreneurs are devising ways to turn carbon dioxide into everything from vodka to sunglasses.
While many such ventures struggle to find product-market fit, Beanlands says Hyperion may have discovered the Holy Grail of so-called carbon tech – a way to convert CO2 into something customers will actually pay good money to buy. Calcium carbonate is a key component of products such as plastics, cement, paint and even animal feed, and billions of dollars worth of it is sold every year.
“I think a lot of the time these cleantech companies get stuck in needing to be heavily subsidized to survive, whereas this opportunity ... is a good business,” Beanlands explains. “But it can be tenfold more exciting once it gets up to scale.”
Ward says she’s optimistic that once the technology is proven in the field, it won’t take long to grab the market’s attention.
"We don’t need 1,000 customers. We need one customer with 1,000 plants."
“We don’t need 1,000 customers,” she says. “We need one customer with 1,000 plants. Once we test this with one partner, the opportunity is there to roll it out globally.”
One of the biggest stumbling blocks for the nascent industry is its reliance on what Ward calls “tough tech.” Complex carbon-capture systems typically require thousands of hours of work and millions of dollars’ worth of research, development and testing to become commercially viable – if they ever get there at all.
But Ward is confident that Hyperion, which now has seven employees, has figured out how to crack that elusive revenue-generating code.
The system is the brainchild of veteran engineer Jerry Flynn, while CEO Luke Tucker – a math and physics graduate of uOttawa who spent years training elite special operations forces for the Canadian military – has serious science chops himself.
“It might not be as sexy as making vodka or jet fuel or hydrogen, but we have a product that can permanently sequester carbon and is (potentially) profitable,” Ward says.
It would appear Ward and Beanlands aren’t the only true believers in carbon tech’s potential.
Elon Musk-funded competition
Just last month, Tesla boss and billionaire entrepreneur Elon Musk announced a four-year competition to come up with the best way to pull CO2 from the atmosphere or ocean, with the grand-prize winner expected to take home a whopping $50 million.
Closer to home, e-commerce giant Shopify has pledged to pour millions of dollars into carbon-capture solutions, and its early investments include another Ottawa startup, Planetary Hydrogen.
Ward, who is part of a local cleantech founders’ group that also includes Planetary Hydrogen’s Mike Kelland, predicts carbon tech could one day be a trillion-dollar industry, adding Canada’s capital has the potential to be right at the centre of it.
“There won’t be any one silver-bullet solution to solving the carbon emissions problem,” she says. “It’s going to take all of these companies to scale rapidly and be able to really grow to their fullest potential.
“We’re looking at building that ecosystem here. There’s a lot of amazing cleantech companies coming out of Ottawa.”
Beanlands, whose organization also has a stake in Planetary Hydrogen, agrees.
“To take all of the carbon out of the air is a multitrillion-dollar problem, and we need all the solutions available,” he says. “There’s ample opportunity for many cleantech companies to survive and thrive. This is the start of a trend, in my opinion. Hopefully, there’s many more to come.”