CM375095

Disrupting the $40B chlorine industry with a carbon-negative solution that transforms CO₂ into valuable chemicals at a fraction of the cost. Their decentralized, modular units reduce emissions, cut supply chain risks, and are scalable across industries like water treatment and agriculture.

With key partnerships already in place, a market-ready product, and projected revenue starting in 2025, this is an ideal investment opportunity. The company is raising $5M to launch its first commercial pilot, presenting significant potential for early investors in a rapidly growing, sustainable market.

Overview

Industry: Chemical Manufacturing, Carbon Capture
Founded: 2022
Mission: The company aims to revolutionize chemical manufacturing by capturing CO₂ and producing chlorine-based chemicals at a lower cost using a decentralized, carbon-negative production model.
Unique Value Proposition: Unlike traditional methods, which are energy-intensive and centralized, their proprietary technology captures CO₂ and converts it into chemicals with 70% lower energy consumption. This approach not only reduces costs but also significantly lowers the environmental impact, addressing both supply chain challenges and the growing demand for sustainable, decarbonized industrial processes. By localizing production near industrial sites, they eliminate logistical delays and further decrease operational costs, offering a scalable and eco-friendly alternative.

Problem & Solution

Problem: The chemical manufacturing industry relies on outdated, inefficient technologies that raise costs and increase carbon emissions. Centralized production exacerbates these issues, causing supply chain disruptions and environmental harm. In the $40B chlorine market, which is critical for industries like water treatment and agriculture, a few major suppliers dominate using old, energy-intensive processes. This leads to pollution, supply shortages, and rising prices. As one of the most carbon-heavy sectors, chlorine has been targeted by the DOE (The United States Department of Energy) for decarbonization efforts.
Solution: The company’s technology captures CO₂ and converts it into chlorine and other chemicals through a distributed, carbon-negative process. This method is more efficient and sustainable, offering a significant reduction in costs and emissions.

Market Potential

Target Market: Chlorine-based chemicals
Market Size:

Total Addressable Market (TAM): $80B
‍Serviceable Available Market (SAM): $40B
Serviceable Obtainable Market (SOM): $5B
Growth Rate: 3.12% CAGR (2023–2032)
Market Trends: Supply shortages due to reliance on centralized suppliers
Customer Segments: Water treatment, paper, chemicals, steel, and textile industries

Product / Service

Core Features: The proprietary technology converts CO₂ and salt into chlorine-based chemicals and minerals, using a highly efficient method that consumes 70% less energy than traditional chlor-alkali technology. This carbon-negative process significantly reduces emissions and, when scaled globally, has the potential to lower CO₂-equivalent emissions by up to 0.5 gigatons annually. This breakthrough not only cuts costs but also contributes meaningfully to global decarbonization efforts, offering a sustainable and energy-efficient solution to the chemical manufacturing industry.
Stage: Market-ready, with field trials underway.
IP Status: Patent application filed in 2023.
Market Validation: Patent application filed in 2023.

→ Technical Validation: Their technology has been rigorously tested and proven to reduce CO₂ emissions while producing valuable byproducts like chlorine and calcium carbonate, used across various industries.

→ Economic Viability: The decentralized production model lowers supply chain risks and operational costs, which is crucial for industries facing price volatility and shortages.

→ Market Demand: Strong customer interest, including initial host and off-taker agreements, demonstrates the solution’s relevance and its ability to meet pressing industry needs.

Business Model

Revenue Model: Owning and operating modular manufacturing units that capture CO₂ at industrial sites like wastewater treatment plants, steel, paper, and chemical facilities. These units, costing $5-8M to deploy, generate over $13M in annual revenue from the sale of chemicals such as chlorine and minerals. With a payback period of less than a year, these decentralized units provide a highly efficient, scalable, and profitable solution by producing valuable chemicals directly at the source of emissions.
Sales Channels: Direct sales to distributors and off-takers.
Key Partnerships: Partnerships with wastewater treatment plants and agreements with chemical distributors.

Financials

Current Status: Pre-revenue, with projected annual revenue of $13M per unit starting Q1 2025.
Burn Rate: $30K/month; runway until Q2 2024.
Financial Projections:

1-Year Projection (2024-2025)
‍‍Revenue: Initial revenue of $0.5M from early pilot projects.
‍Expenses: CAPEX for modular installations between $5-8M, leading to a net cash burn of around $4.8M as the company focuses on product testing and market entry.

‍3-Year Projection (2024-2027)
‍‍Revenue: Expected to grow to $19.6M with broader deployment across wastewater and agriculture sectors.
‍Net Profit: Significant reduction in cash burn, nearing breakeven by the end of year three.

‍5-Year Projection (2024-2029)
‍Revenue: Estimated to reach $39.2M as operations scale, with the company becoming cash flow positive.
Profitability: Projected to generate substantial cash flow by 2029, allowing for internally funded expansion. Cumulative cash is projected to grow steadily from 2027 onward, with further rapid growth expected in the following years.
Key Financial Metrics:
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Customer Acquisition Cost (CAC): Estimated ~ $100K per project, covering marketing, partnership building, and the sales cycle.

Lifetime Value (LTV): Estimated at $200M per customer over a 25-year project, based on annual revenue of $13M per unit.

Gross Margin: Projected to exceed 65%, driven by lower production and transportation costs and the high value of by-products like chlorine and bicarbonates.

Net Profit Margin: Expected to surpass 50% once scaled, due to the localized production model that reduces operational costs such as logistics and energy.

Team

Expertise: The team has a strong background in carbon capture, chemical commercialization, and climate technology, with experience in leading R&D, operations, and commercial partnerships.
Advisors: Industry experts in grants, commercialization, and legal matters.

Competitive Analysis

Direct Competitors: Large industrial chemical producers, like those dominating chlorine production, rely on older, carbon-intensive processes, making them less efficient and environmentally friendly. Companies capturing CO₂ for chemical production face similar challenges, with significantly higher energy consumption.
Indirect Competitors: CO₂ capture technologies that focus on larger, centralized plants target storage solutions, often relying heavily on government subsidies and offering limited commercial value. These solutions focus more on containment rather than repurposing CO₂ into valuable byproducts, limiting their market competitiveness.
Competitive Advantage: The company’s decentralized, carbon-negative production model is more cost-effective and energy-efficient, with first-mover advantage in decentralized emissions capture.
Barriers To Entry: Their proprietary technology, established relationships with key partners, and first-mover advantage in capturing decentralized emissions sources give them a significant edge in the market.

Traction

Milestones: Partnerships with wastewater treatment plants and off-takers; NSF SBIR grant awarded; first field pilot scheduled for 2025.
Customer Interest: Letters of support from key wastewater treatment partners.

Risks & Mitigation

Market Risks & Mitigation: Supply chain volatility mitigated by strategic partnerships.
Operational Risks & Mitigation: Pilot projects designed with established EPC firms.
Regulatory Risks & Mitigation: Ongoing collaboration with partners ensures compliance with environmental regulations.

Funding Requirements

Amount Being Raised: $5M for pilot projects and scaling.
Use of Funds:

49% ($2.45M) for 2 field projects, which will enable the company to generate first revenue.
‍35% ($1.75M) for payroll
‍8% ($400K) for ongoing R&D (material, equipment and supplies)
‍3% ($150K) for lab demonstrations to further validate the system before moving to larger installations
‍2% ($100K) for legal and IP-related
‍2% ($100K) for rent and utilities
‍1% ($50K) for travel and promotion
Runway: 18 months, enabling:

→ Kick off the first commercial pilot.
→ Advance its technology readiness level (TRL) from 5 to 8.
→ Secure the first revenue from pilot operations and lay the foundation for Series A funding in 2025.
Previous Funding Rounds:

Amount Raised: $1M in non-dilutive grants and VC investments.
‍Valuation: Information on valuation available upon request

Exit Strategy

Acquisition: Targeted by larger chemical manufacturers or renewable energy companies.
IPO: Potential within 5-7 years after scaling commercial deployments.