Novomer’s cleaner burning binder goes into customer trials

Boston, Mass.-based Novomer has a family of high-performance, low-cost plastics that CEO Jim Mahoney said has advantages over bio-based plastics. Novomer’s products don’t require farming, water, or costly specialty plants to produce them.

And that potential is getting attention from investors and customers. With a $14 million Series B funding round now closed, Mahoney told the Cleantech Group the company plans to use the funding to scale up and work with manufacturing partners and consumer goods companies that are interested in its products (see Novomer raises $14M for plastics from renewable feedstocks). 

The materials company makes a family of plastics, polymers and other chemicals from renewable feedstocks such as carbon dioxide and carbon monoxide. The company's products are based on the pioneering catalyst work of Professor Geoff Coates at Cornell University. 

One of its catalyst systems, called NB-180, uses carbon dioxide feedstocks to produce an ultra-performance material for specific high-tech markets. Released in 2008, NB-180 is an amorphous, colorless thermoplastic polymer that decomposes into environmentally benign products with applications in the electronics, brazing and ceramics industries, according to the company.

Because the polymers are made of 50 percent carbon dioxide, Mahoney said they are “using half the oil a normal plastic would require.”

The process has lower operating costs because NB-180 binders burn more uniformly and at lower temperatures and pressures than other products (see Novomer releases biodegradable polymer). NB-180 also produces low ash residue by burning cleaner than current binders, Novomer said.

On the carbon monoxide side, the catalyst requires less water, land, and about 40 percent less energy, Mahoney said.

The company is also covering its bases with a strong intellectual property position. It has 10 issued patents and 45 pending patents, all with global coverage.

“We have protected the catalysts themselves and the way to make the materials because they are unique, and the applications,” he said. “We tried to cover as much as possible.”

In the coatings area, he said his company’s products could be used, for example, on the metal coating of a soda can and would cost 40 percent less to make, as well as being free of Bisphenol-A. The hormone-disrupting chemical is considered to be potentially harmful to human health and the environment.

Mahoney said the company’s consumer goods, packaging and media customers would be reached by licensing the technology to resin and plastic makers. He wouldn’t disclose potential customers, which are currently testing the products, but hopes to announce partnerships by the end of the year.

Novomer, which is already bringing in some undisclosed revenue to date, would make money by licensing the technology and selling the catalysts.

OVP Venture Partners led the $14 million round, with existing investors including Physic Venture Partners, Flagship Ventures and DSM Venturing. Novomer starting raising the funds in March, closing the round at the beginning of August.

“The investment community is taking longer to make decisions,” Mahoney said.

With the new funding, Novomer has raised about $21 million to date, and Mahoney said the funding should last for the “foreseeable future” if the company is able to execute on its revenue plan.

He said investors were attracted to the fact that the company uses carbon dioxide as a raw material, as well as not needing to build $300 million to $500 million manufacturing plants often needed for bio-based plastics (see Packaging: The most important part of what you buy?).

“We can use existing chemical plants, so it’s capital efficient,” he said.

The 23-employee company has also received nearly $2 million in grants from the U.S. Department of Energy (DOE), the National Science Foundation and the state of New York, Mahoney said.

And Novomer is looking to grow that amount through stimulus funding. Mahoney said the company has applied for $20 million and another $5 million to $7 million from the DOE related to carbon dioxide reuse and re-purposing as well as carbon dioxide sequestration (see U.S. allocates more funds to investigate cutting coal CO2).

In 2007, Novomer raised $6.6 million in Series A funding. Physic Ventures and Flagship Ventures co-led the round, joined by DSM Venturing (see Solar and biofuel deals lead the day).