Lydian, a startup aiming to produce sustainable, CO2-derived fuels and chemicals, has raised $12m in new seed funding co-led by Congruent Ventures and Galvanize Climate Solutions, according to a news release.
Participating investors included Grok Ventures, Voyager Ventures, Union Square Ventures (USV), Overture VC, and Overlap Holdings.
This funding adds to $3m in previously unannounced funding in June 2022 from Congruent, USV, Voyager, and Global Founders Capital. The company plans to use the new funding to build an integrated pilot plant in 2024 which will be capable of producing over 5,000 gallons of SAF per year. Lydian is already producing small quantities of e-fuel in its Cambridge-based lab.
Lydian’s proprietary, high-temperature electric reactor enables the production of the world’s lowest cost e-fuels, a category of drop-in alternatives to transportation fuels made from captured CO2 and renewable electricity. Lydian also aims to produce carbon-negative versions of many other industrial chemicals.
Demand for sustainable aviation fuels (SAFs) has surged in recent years as airlines push to reduce their greenhouse gas emissions and new regulations seek to mandate increasing use of SAF across the aviation industry. E-fuels are expected to be an important piece of the puzzle, with some experts estimating that they could contribute as much as 60% of final energy demand for aviation by 2050. But e-fuels are currently very expensive, largely as a result of their significant energy requirements.
“We are pulling the energy efficiency lever,” said Joe Rodden, Lydian’s CEO. “We believe fuels produced with our technology will consume less energy per gallon than any other e-fuel.”
Lydian’s technology can achieve a total energy consumption approaching 2 kWh per kilogram for the reduction of CO2, a key step in the process, which the company says will be 30% to 50% lower than competing technologies like CO2 electrolysis. At the scale projected for e-fuels, this could represent a total annual energy savings of more than 200 TWh (terawatt-hours), equivalent to the electricity consumption of over 20 million households.
Lydian has also demonstrated a version of its technology that can use alternative hydrogen sources like biomethane, which could further reduce energy consumption relative to water electrolysis.
“Lydian is the best-positioned technology we have come across in this space,” said Joshua Posamentier, co-founder and managing partner, Congruent Ventures. “Joe, Branko and the team have made incredible progress over the past 12 months to help drive e-fuels to market in a massive way.”
“The development of sustainable aviation fuels is critical to decarbonizing aviation in-line with climate targets,” said Cliff Ryan, co-head of Innovation + Expansion at Galvanize Climate Solutions. “Lydian, with its differentiated e-fuel technology and extremely effective team, which we have been fortunate to get to know over multiple years, represents an exciting solution in various hard-to-abate sectors over time.”
“We’re lucky to have an amazing team of scientists and engineers who are setting a rapid pace of development,” said Branko Zugic, Lydian’s CTO. “We look forward to tapping into the deep talent pool in the greater Boston area as we continue to grow the team with this capital.”
