Methane emissions focused startup raises $29m in funding
Founded in 2018, CH4 Global is headquartered in Henderson, Nevada, in the US, with subsidiaries in Australia and New Zealand.
The Series B round was led by DCVC, DCVC Bio, and Cleveland Avenue with participation from additional investors that have a strong interest in climate change, bringing the total the US based startup has raised to date to nearly US$47m.
The company said it will use the capital to build and validate its CH4 Global EcoPark, an aquaculture and production facility designed to make its signature Methane Tamer product, based on Asparagopsis seaweed, at scale.
As part of this funding round, Cleveland Avenue LLC will join CH4 Global's board of directors. “We are excited about the opportunity that CH4 Global represents in addressing the major global problem of methane gas emissions. Cleveland Avenue looks forward to supporting CH4 Global’s world-class team in this endeavor,” said Randall Lewis, managing partner at Cleveland Avenue, LLC.
CH4 Global maintains that it is poised for expansion in key markets and with key partners throughout all six inhabitable continents.
“We are receiving massive interest from governments, food producers and farmers of all sizes, fueling our sense of urgency that we must act now to avoid a climate tipping point. The pressure is on with new regulations and the desire to produce at a measurably lower impact. What we've developed at CH4 Global is what we call a CH4 Global EcoPark, which enables low-cost growth and processing of Asparagopsis,” said Steve Meller, co-founder and CEO, CH4 Global.
The startup’s feed supplement products will address the specific needs of each cattle market segment, starting with feedlot operations, beef, and dairy, as well as for grazing dairies plus eventually for remote and “generally unattended” cattle around the world, he said.
In April, we reported that CH4 Global had launched a new methane reducing feed formulation for beef feedlot cattle with the product initially available to partners in Australia such as CirPro and Ravensworth, with global market expansion set to follow.
Australia has approved the use of Asparagopsis for methane emissions reduction in cattle. That red seaweed contains bromoform (CHBr3), which is a key ‘active’ ingredient in CH4 formulations. When fed to cattle, bromoform disrupts enzymes of the gut microbes that live in the animal’s gut and produce methane gas as waste during digestion.
Driving down costs
Meller told FeedNaivator in an interview earlier this year that CH4 Global’s goal was to build a platform that can quickly scale and be highly profitable.
“We now understand enough about the science and the technology of the process, and we understand the pieces that are important for the commercial scaling of it.”
The team is focused on incorporating all that knowledge, then building and operating a facility in a way that can generate substantial gross profit margins. “That will really make the difference between us being just a local supplier of a product and being an entity that can be scaled globally.”
CH4 Global, he continued, has found a novel way to drive down the costs of growing and processing Asparagopsis, while preserving the bioactivity of the final product.
“In October last year, we filed patents related to the expensive parts of production: the growing out of the seaweed at large scale and the processing of it. We have found ways to decrease the costs of those parts of the process tenfold.
“And what that means for our overall end to end production and our final product costs is that they will be significantly lower than the costs anyone else in this competitive space is facing today or is likely to face in the near future,” said the CEO.
Hub and spoke model
The CH4 Global EcoPark strategy is based on cultivation in ground, and, to a lesser extent, in tanks, thereby safely enabling Asparagopsis aquaculture in regions where the seaweed is non-native.
In terms of its final production model, the goal is to have a kind of hub and spoke structure, with a centralized processing facility and multiple growing sites feeding into that, one can be replicated in multiple markets.
“And we have adapted like most start-ups; we were originally planning to grow much of our seaweed in the ocean. There are incredible benefits that you can derive from ocean farming, but as we learned more about the process, it became readily apparent that it was just not going to be scalable, from a standpoint of profitability. So, we have moved into growing it on land,” explained Meller.
The company continues to source 'native material' from the ocean when needed for R&D purposes.
While there are additional costs attached to land cultivation of the seaweed, from buying the land and the growing vessels to supplying the required nutrients, the founder maintains that this approach gives it a much higher level of control.
