Late last year, I wrote a series of articles about the cutting-edge synthetic biology / industrial chemicals company, LanzaTech, based in my own hometown of Chicago.
You can read those articles here:
In short, LanzaTech succeeded in genetically engineering a naturally occurring anaerobic bacteria, Clostridium autoethanogenum (C. auto for short), to efficiently produce industrial quantities of ethanol while sequestering carbon in the process.
Carbon negative ethanol is a real feat, especially considering findings published in a recent paper in the prestigious Proceedings of the National Academy of Sciences that found corn-based ethanol to have a carbon footprint no smaller than that of gasoline and most likely higher. (Many thanks to Russ Conser, the CEO of Blue Nest Beef and a Forbes contributor for pointing me to this research!)
LanzaTech has not only demonstrated it can produce carbon negative ethanol on an industrial scale, it has also used ethanol as an industrial chemical “platform” to create plastic bottles, yoga plants, aviation fuel, and an increasing number of various consumer products.
Last month, LanzaTech released some exciting scientific and operational news; this month, they have followed that with some wonderful business news.
In a paper published by a leading journal, Nature Biotechnology, LanzaTech scientists and colleagues from Northwestern University, Oak Ridge National Laboratories, and the Department of Energy’s Joint Genome Institute announced they had succeeded in engineering two new strains of C. auto that would create two additional industrial platform chemicals – acetone and isopropanol (IPA).
While the ethanol-producing strain of C. auto is a naturally selected organism which enables LanzaTech to commercialize its innovative industrial process, the new acetone- and IPA-producing strains have never existed in nature.
As such, this scientific feat goes way beyond simply putting a cute female tiger in a cage with a horny male lion to create a Liger. The scientists at LanzaTech spent tens of thousands of hours mapping out the genetic sequence of C. auto, figuring out which sequences did what, then finding sequences from other organisms that might be modified and incorporated into C. auto’s genome to produce the target chemicals.
Imagine a horse that perspires red wine when it gallops or a chicken lays chocolate truffles. That’s the macroscopic world’s corollary of what LanzaTech scientists have done on the microscopic level. All I can say is “Wow!”
The operational advantages prompted by this scientific advance are no less astounding.
LanzaTech engineers have designed a bioreactor into which any of the three strains of C. auto can be dropped to produce whichever of the three target chemicals is desired. In other words, the bioreactor is like a desktop computer and the anaerobic bacteria strains are the programs that run on it.
Operationally, this allows a bioreactor operator to modify the chemical being produced to better meet the vagaries of supply and demand on close to a real-time basis. This is as different of an economic model from the traditional commodity chemicals business as night is to day. All I can say again is “Wow!”
So, what are Acetone and IPA?
LanzaTech’s press release gives a good explanation:
“Acetone and IPA are necessary industrial bulk and platform chemicals. For example, acetone is used as a solvent for many plastics and synthetic fibers, thinning polyester resin, cleaning tools, and nail polish remover. IPA is a chemical used in antiseptics, disinfectants, and detergents and can be a pathway to commercial plastics such as polypropylene, used in both the medical and automotive sectors. Both are used in acrylic glass. IPA also is a widely used disinfectant, serving as the basis for one of the two World Health Organization (WHO) -recommended sanitizer formulations, which are highly effective against SARS-CoV-2.”
Congratulations, LanzaTech scientists and engineers!
Congratulations are also in order for LanzaTech’s CEO, Dr. Jennifer Holmgren, and her business team!
On March 8, LanzaTech announced it would go public through an acquisition by a Special Purpose Acquisition Vehicle (SPAC) named AMIC Acquisition Corp. II. The acquisition is scheduled to close in the third quarter of 2022, after which LanzaTech will begin trading on the NASDAQ Stock Exchange under the ticker LNZA. The acquisition of LanzaTech values the company at $2.2 billion post-money.
One of the most consistent questions I get from readers of this column is how they might be able to invest in the private companies about which I write. Investing in private companies is hard – information is difficult to gather and there are logistic issues involved as well.
However, over the last year, I’ve been seeing more and more ClimateTech unicorns electing to use the SPAC route to go public. When a company lists itself on an exchange, it is required to publish full financial disclosures to the SEC (which are available to everyone) and that there will be a “secondary market” for the securities (i.e., you can buy the stock from someone and sell it to someone else easily).
The fact that LanzaTech will soon enter the ranks of listed companies, hereby allowing the investing public to take a stake in the future of what Holmgren calls the world’s first “Carbon Capture and Transformation” (CCT) company, represents a win-win-win for LanzaTech’s early investors, the investing public, and civilization in general, in my opinion.
Considering the tragic loss of life and property being inflicted in Central Europe right now, it might strike some of you as an odd time to announce an IPO. From my perspective, however, the crisis in Ukraine underscores the brilliance of the LanzaTech business model and highlights the benefits from moving away from the outmoded and failing Industrial Revolution paradigm of centralized production.
Economically, Russia is only about the size of Canada or Brazil, but it holds outsized influence due to its production of hydrocarbons, on which Germany in particular and the rest of Europe in general is dependent. Imagine if German homeowners were not reliant on Russian gas for winter and spring heating. Imagine if Germany’s manufacturers did not need to buy Russian petrochemicals to produce plastic bottles, acrylic glass, and the like.
Resilience born from distributed production is where I see the promise of LanzaTech’s technology, especially when paired with grid modernization and other innovations that allow for electrification and decentralized production.
The March 8 announcement was accompanied by a detailed financial presentation for LanzaTech, and I will be putting on my analyst hat and working through these documents over the next few weeks. Readers of this column will be the first to read the results of my research!
LanzaTech is on the avant-garde of the ClimateTech world. While I haven’t dug through the financials yet, my first impression is that for individuals and families concerned with how best to preserve and expand intergenerational wealth, it is hard to imagine a company or an industry with a stronger tailwind.
Intelligent investors take note.