Enerkem: Behind The Deal With Cycle Capital Management

On Feb. 6, 2018, Montreal-headquartered Enerkem announced it had secured CAD $280M in its largest investment round to date.

The syndicate included existing investors Cycle Capital Management, Rho Ventures, Braemar Energy Ventures,Waste Management of Canada,Investissement Québec, Fonds de solidarité FTQ,Fondaction, The Westly Group, and the National Bank of Canada. The latest round saw brand new investment from BlackRock and Sinobioway.

Enerkem is a world leading waste-to-biofuels and chemicals producer. It produces advanced biofuels and renewable chemicals from waste. Its disruptive proprietary technology converts non-recyclable, non-compostable municipal solid waste into methanol, ethanol and other widely-used chemicals.

Andrée-Lise Méthot, the founder and Managing Partner of Cycle Capital Management, was the lead from Cycle Capital on the deal with Enerkem. Méthot has 25 years of experience in venture capital, management and engineering and has fundraised more than 350M$ over the past years to build the most active cleantech venture capital firm in Canada.

For the latest in CVCA’s ​“Behind The Deal” series, we caught up with Andrée-Lise Méthot at Cycle Capital Management to discuss the latest fundraise with Enerkem.

Why did Cycle Capital choose to invest in Enerkem and the management team?

Cycle Capital has made its first investment in Enerkem in 2009. Back then, we could already see the leadership and entrepreneurial talent of the management team, notably of its CEO Vincent Chornet, and the potential of the revolutionary technology developed by Dr. Esteban Chornet.

Now that the company has brought some of the world’s most important investors on board and that the company has signed agreements for the construction of plants in China and in the Netherlands, the promising future we saw in those early days is coming to fruition.

What will the invested dollars be used for?

It will be used to help accelerate Enerkem’s commercial growth and further expand its project development and implementation. The company is leveraging its experience gained with its first full-scale waste-to-biofuels facility in Edmonton, Alberta, to implement several new plants in North America, Europe and China.

Where did you hear about Enerkem?

Esteban Chornet, cofounder and Director Emeritus of Enerkem, had invited us to visit the Enerkem’s innovation center of Westbury, in the Eastern Townships in Quebec.

What is your anticipation about this sector in the short term and long term?

Until electrification of the ground transportation becomes mainstream, we anticipate the biofuels to have a significant role in the transition to a low-carbon economy, notably for light transport. In the long term, biofuels will still have a prominent place with heavy transport, notably in aviation and shipbuilding industry. As for the green chemicals, with the reduction of oil and gas use, there will be a need for new sources of feedstocks to produce chemicals. As such, green chemicals will become a good alternative solution.

Is there anything particularly interesting about Enerkem that you’d like to emphasize?

The ​“Industrial revolution” tag that’s been associated to Enerkem’s technology is an understatement considering the fact that this company is at the forefront of a whole new industry.

Diversity in the Portfolio Company and Community Impact:

• What is the number and percentage of women on the executive team in this company? 20%
• What is the number and percentage of visible minorities on the executive team in this company? 10%
• Number of jobs to be created with most recent investment round? Over 100
• Number of jobs created since company inception? 200

What are some of the ways Enerkem is making an impact in the community?

Enerkem’s breakthrough technology is a prime example of how a true circular economy can be achieved by diversifying the energy mix and making everyday products greener while offering a smart, sustainable alternative to landfilling and incineration.

Are there any other initiatives from Enerkem that you’d like to mention?

In addition to its next project to be built in Varennes, Quebec, the company has also announced that it has signed a project development agreement with its partners Air Liquide, AkzoNobel Specialty Chemicals and the Port of Rotterdam for an advanced waste-to-chemistry facility in Rotterdam and that it has created a joint venture with Sinobioway to build over 100 Enerkem plants in China by 2035.

If you would like to submit an idea for content, contribute to an article, or are interested in submitting an op-ed, contact the CVCA’s editorial department here.