A renewable energy company and agtech product developer that is addressing three of the world’s largest markets — energy, water, and food — recently raised additional financing from existing investors
Cool Planet‘s investors include big name VCs such as Google Ventures and Energy Technology Ventures — investor in GE, ConocoPhillips, and NRG Energy. It also has a range of strategic investors including BP and the Constellation division of Exelon.
This latest round of funding was led by venture capital firm North Bridge Venture Partners alongside Yung’s Enterprise, the Hong Kong investor that anchored Cool Planet’s $100 million Series D last year.
Cool Planet has developed a system which produces both hydrocarbon fuels as well as a fertilizer-saving soil amendment that sequesters carbon and enhances crop growth.
This latest round of financing will go towards advancing Cool Planet’s biocarbon technology and will provide growth capital. The round coincides with the hiring of James Loar to lead Cool Planet’s biocarbon business from agriculture retailer Wilbur-Ellis, where he was vice president of operations.
Under today's unique circumstances, AgFunder is re-opening Fund III for a limited time to enable investors to join our mission and invest alongside us as LPs in a second close. Learn more here.
Cool Planet has raised a total of $146.7 million across seven rounds, according to CrunchBase, and the company is always interested in adding capital, according to Wes Bolsen, head of business development and public affairs. It would focus its next round on the company’s agriculture applications and the company would be open to finding a strategic ag partner, Bolsen told AgFunderNews.
“From the fuel side, we have great investors,” he told AgFunderNews. “I think we would be open to finding the right strategic ag partner. We are going to look at that and how the partnership may enable us to move Cool Planet and CoolTerra forward.”
To produce both the hydrocarbon fuels and CoolTerra, its soil amendment product, Cool Planet grinds wood chips, corn stalks, wheat straw, and other types of agricultural non-food biomass into small particles. It then applies heat to drive out reactive gasses from the biomass inputs, which are then transferred to a catalytic column, creating fuel that floats on water.
“The easiest way to think about this is as a biomass refinery or biomass conversion system,” says Bolsen. “We are taking wood chips and turning them into high-octane gasoline or jet fuel that’s ready to go into an airplane, and that’s why investors are really excited. It’s a huge breakthrough in the technology.”
Unlike cellulosic ethanol, which is derived by fermenting sugars extracted from energy crop sources like sugarcane, Cool Planet’s approach utilizes the entire biomass input.
“We take the whole tree or the whole corn stalk, and cook it at about 500 degrees Celsius in the absence of oxygen,” explains Bolsen.
What does Cool Planet do with the leftover biomass? It creates the CoolTerra product from the biochar produced, which is a type of charcoal. Using a patented process, the company transforms the biomass material into an agriculture input product, which improves soil health, promotes water and resource retention, fights fertilizer leaching and runoff, and has led to better plant growth in company test trials.
This process of cooking biomass and burying it to improve soil health is likely to have existed for hundreds of years, and is widely used in the Amazon to help crops grow in the region’s difficult red clay soil, according to Bolsen.
“It’s literally reversing climate change. You take CO2 out of the atmosphere and store it back into the ground where it stays for thousands of years. That’s got people very excited,” he said.
Today, CoolTerra is used in a multitude of operations, including turf landscape and horticulture, and the company continues to explore new and diverse agricultural applications for its soil health improvement product.
In the soil health sector, Bolsen sees few direct competitors. “Soil health is just starting to become a huge topic so investment in soil health is just now starting. We think Cool Planet may be at the front end of a growing wave of soil health initiatives.”
Although Cool Planet’s dual income streams were an obvious draw for investors, Bolsen saw a contrast in VC firms’ approach to the renewable energy and ag input components.
“The idea of cooking biomass to go back into the earth is well understood, but investors wanted to make sure there was a market for the agriculture input product,” explains Bolsen. “The flip side was true with the fuel product. Investors have always known there is a market for fuels, especially renewable fuels in today’s market, but they wanted to make sure it works. We had to prove out the fuel technology.”
A $91 million Biorefinery Assistance Program loan guarantee from Silicon Valley Bank in October 2014 — a deal that the US Department of Agriculture helped to arrange — also validated the company’s technology to investors, according to Bolsen. CoolPlanet used the grant to complete construction of its biofuel plant in Louisiana.
Cool Planet’s leadership team was another draw for investors, according to Bolsen. The company’s CEO and president, Howard Janzen, served as president for Sprint Business Solutions, a mobility-as-a-service wireless provider, while its vice president of operations, Mike Bukowski, formerly ran the largest refinery on the east coast. And Cool Planet’s CFO, Barry Rowan, also served as CFO for big-name companies like Nextel, which is owned by Sprint Business, and Vonnage, an internet telephony business.
And Cool Planet also recently bolstered its technical advisory board with three new appointments: Greg Butler, Anne Gaffney and James F. White.
“We had already built one of the best advisory boards in the country with former DuPont Fellow Leo Manzer, who now chairs the advisory board, and BP’s Chief Chemist Mike Desmond serving alongside the rest of our dedicated and talented advisory board members from around the world,” said Cool Planet CEO, Howard Janzen in a statement. “Adding Greg’s global biocarbon expertise, as well decades of commercialization expertise with Anne and James, supports our global commercialization plans.”