Sustainable aviation fuel (SAF) technology company Velocys today announced it has raised $40 million in growth capital, shortly after delisting from the AIM market on the London Stock Exchange, signaling the need to raise capital to continue operating.
The financing consortium consisted of growth investors Carbon Direct Capital, Lightrock, GenZero and Kibo Investments.
Kevin Bone, partner at Lightrock, said:
“We are excited to partner with Velocys as it takes the next steps in its journey to become the leading provider of SAF solutions for the aerospace industry. This crucial objective requires long-term support, with the necessary experience in supporting industrial companies to realize their potential. I have no doubt that this consortium is best placed to do so.”
UK-based Velocys, founded by University of Oxford technology spin-out company Oxford Catalysts, enables customers to produce drop-in negative carbon intensity fuels, functionally equivalent to currently used fuels, from a variety of waste materials , such as municipal waste. solid waste, woody biomass and CO2 and green hydrogen, using the patented Fischer-Tropsch-based technology.
Sustainable aviation fuel is seen as one of the key tools to help decarbonize the aviation industry, which is currently responsible for 2-3% of global greenhouse gas emissions. The investment comes as demand for SAF is expected to rise dramatically in the coming years, as airlines adopt the technology as one of the key solutions to achieve their climate goals, and as governments mandate greater use of SAF to fuel their own decarbonization reaches. ambitions. For example, the EU recently announced the passage of a law mandating minimum use of SAF, increasing to 70% of fuel blends by 2050, and the Inflation Reduction Act in the US encourages SAF use through strong tax incentives.
May Liew, Investment Director at GenZero, said:
“Decarbonizing the global aviation industry requires innovative solutions that can be applied easily and at scale. This is where Velocys’ groundbreaking Fischer-Tropsch reactor is relevant, with its modularity and efficiency to support the development of advanced biofuel applications. By using technology to convert waste materials into sustainable aviation fuel, Velocys is well positioned to play a key role in scaling the use of low-carbon fuels to pave the way to climate-neutral aviation.”
According to Velocys, the new capital will be used to accelerate the delivery of its technology for customer projects, and to help the company build its technology leadership, scale production and strengthen its team.
Velocys CEO Henrik Wareborn said:
“The deal secures the future of Velocys, our breakthrough technology and our industry-leading talent, allowing us to keep our foot on the accelerator as we continue to lead the way in innovative sustainable aviation fuel solutions as we enter an inflection point for our industry. ”