Carbon capture startup raises $3.5m in pre-seed

  • Greenlyte Carbon Technologies wants to replace oil and gas with CO2 and hydrogen captured from the air.
  • The direct air capture startup just raised a $3.5 million round co-led by N26 investor Earlybird.
  • We got an exclusive look at the 11-slide pitch deck he used to raise funds.

The team behind Greenlyte Carbon Technologies pass by old coal towers every day en route to the company’s offices in Essen, the historic industrial center of Germany.

It’s a fitting setting for a startup working to suck carbon dioxide out of the atmosphere.

Greenlyte, founded in 2022 and based on research from the University of Duisburg-Essen, has developed a way to capture Co2 directly from the atmosphere and convert it into hydrogen and carbon, which can be used as an alternative to fuels fossils in the likes of chemical production and aircraft fuel.

It just landed $3.5 million in a pre-seed investment round co-led by European venture capital firms Earlybird, Green Generation Fund and Carbon Removal Partners.

Investor appetite for zero carbon skyrocketed in 2022. Venture capital investments in startups in the sector hit a record $1.3 billion from $389.3 million in 2021, according to PitchBook.

Greenlyte co-founder and CEO Florian Hildebrand believes his company stands out from competitors because its technology “dramatically” reduces the energy needed to capture CO2. The startup’s technology is based on a chemical process that converts CO2 into salt, which consumes a “negligible” amount of energy, he said.

He then uses electrolysis to turn the salt into carbon and hydrogen, which together can be used to create green hydrocarbons. Green hydrocarbons are chemically identical alternatives to fossil fuels.

Greenlyte Carbon Technologies built its first large prototype in October and is currently working on a device that will be able to remove 100 tons of Co2 per year. At that scale, Hildebrand said the company will have lowered the risk of its technology and it will be easier to scale.

It is developing two prototypes to experiment with the cheapest and most efficient designs and expects to have one commercially available by the end of 2023. It will not be as energy efficient as the company would like, said Hildebrand, but he plans to go fast. and iterate publicly so that the Direct Air Capture ecosystem grows alongside it. This will ultimately help reduce the cost of captured carbon and lower the barrier to entry, he said.

“We want to build a carbon utilization product where, essentially, companies stop extracting oil from the ground and start extracting CO2 and hydrogen from air and water,” Hildebrand said. “And then start producing the same thing that we produce today, but without fossil raw materials. For that, we need to reduce costs so that companies don’t have to pay such a big green premium.”

The startup is eyeing all industrial companies with a strong need for oil and gas in their processes as customers.

Carbon extracted via direct air capture is often sold at $100 per ton, but Greenlyte Carbon Technologies aims to reach between $60 and $80 by 2026. Using less energy also means less overhead, which will help reduce that cost, Hildebrand said. A ton of carbon removed by Climeworks, which runs the world’s largest direct air capture facility in Iceland, is expected to cost $500 in 2025.

Direct air capture is also expected to be powered by renewable energy, so it’s important to move in parallel with this industry, Hildebrand said. Greenlyte Carbon Technologies’ device can be turned on and off, meaning it will work well with intermittent renewables like solar and wind, he added.

Greenlyte Carbon Technologies will use the money to build its team of 15 by summer and continue to develop its technology.

Check out the redacted 11-slide pitch deck he used to raise the fresh funds below.

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