Cleantech venture capitalist heading to NZ
Khosla Ventures founder Vinod Khosla to visit this month at Lanzatech's invitation.
Thursday, October 13 2011 || Investment || BY Michael Field, Businessday.co.nz
Global carrier Virgin Atlantic yesterday announced it had a deal with Auckland based LanzaTech New Zealand to use the fuel it will make in a bacteria-based process that turns steel mill waste into ethanol and other chemicals.
The company was one of around a hundred start-ups helped by Warehouse founder Sir Stephen Tindall through early-stage investment.
He said that when its technology proved itself at a trial plant at the Glenbrook steel mill in South Auckland he realised "really serious money" was needed to scale it up.
Lanzatech went to Khosla Ventures of Silicon Valley in California, founded by Vinod Khosla, the India born co-founder of Sun Microsystems - and now one of the leaders in clean technology. It now holds a 51 per cent share of the company which currently employs 50 scientists in research and development in Parnell, Auckland.
Sir Stephen said Khosla was to visit New Zealand later this month at LanzaTech's invitation.
"We are introducing him to a whole lot of other projects in New Zealand.
"He is a guy very keen on clean technology and can see how it will make a difference to the world and therefore he is willing that on the basis this very smart (LanzaTech) technology and the way we are able to execute it in New Zealand, he is very interested in seeing what else we can do."
Sir Stephen said he was anxious that LanzaTech did not falter and fall into overseas control as other innovative companies had in the past.
"I think what we are learning is that where we fall down in the past we get to a certain point and then haven't been able to kick on.
"We have bought in expertise we cannot be an island, we have to go into the world."
One of those bought in was Californian CEO Jennifer Holmgren who pioneered the use of jatropha in aircraft fuel that has been trialled by Air New Zealand.
"You've got to have global players who can then scale it across the world, and that is what Jennifer has."
Involving government was crucial in taking the operation to China while ensuring they would not be ripped off.
"When you are dealing with China, there are more than just patents, it is also the human relationships at government to government levels and the relationship with the Chinese Academy of Sciences. We have to be able to trust each other."
LanzaTech will begin constructing its plant in Shanghai early next year with fuel following by 2013.
"We see (LanzaTech) as one of our leading lights, because it ticks so many boxes," he said.
"It cleans up air pollution, at the same time it turns waste into valuable fuel and chemicals."
Sir Stephen said the company had been a good model of how government, through Ministry of Foreign Affairs, Trade and Enterprise and Ministry of Science and Innovation, could work with business to get New Zealand technology to the world.
He got interested in the technology through the late Dr Ross Clark, a University of Auckland endocrinologist who developed leading biotech companies.
"I had two scientists come and see me with a test tube with these bacteria in it and say that this is a bit of a leap of faith but would you fund us into trialling this.
"It all gets down to a leap of faith in the people and the idea. I was impressed the two scientists had done the right homework and the right bacteria."
He took advice from Dr Clark and others and decided it was worth a $100,000 investment.
"The plan gets down to the idea, the people and then the execution."
Sir Stephen says his role was to keep the operation in New Zealand.
"It is a hundred percent New Zealand technology.. All our R and D is done in Parnell, we have 50 scientists and we are looking to grow that to 150."
It was highly likely that LanzaTech would eventually issue an IPO but Sir Stephen believed it would happen at a big market like Shanghai.
"The New Zealand shareholders will have the opportunity to be part of that and we will keep the R and D here."
Virgin Atlantic's Sir Richard Branson-controlled airline says it plans to use the new fuel on its routes from Shanghai and Delhi to London as LanzaTech develop facilities in China and India.
"The technology is currently being piloted in New Zealand, a larger demonstration facility will be commissioned in Shanghai this year, and the first commercial operation will be in place in China by 2014.
"Following successful implementation, a wider roll-out could include operations in the UK and the rest of the world."
- BusinessDay.co.nz
