Investment Reflections – #17 Captivate

By Samuel Sutton, Senior Analyst

True to our deep tech and impact objectives, in February 2023, Matū announced our lead investment into cleantech carbon capture through Captivate Technology. 

Captivate is refining its development of novel Metal-Organic-frameworks (MOFs) for capturing carbon dioxide at the point of release, acting like a sponge to prevent CO2 from entering the atmosphere. Captivate’s approach utilises its very own MOF, MUF-16, to adsorb CO2 with high specificity. The technology has enormous potential for improving the sequestration of CO2 emitted from primary sources to reduce greenhouse gas emissions in hard-to-abate industries. 

Now that the deal is done and Captivate is well underway on its journey, it is an excellent time for us to take stock and talk a little bit about what got us excited. 

The case for Carbon Capture

You may have noticed that the world is confronting a climate emergency (this is not what gets us excited). Governments and business leaders are under intense pressure to deliver on promises made in the landmark Paris Agreement. Proponents of carbon capture technologies believe they can play an important and diverse role in meeting global energy and climate goals (this is what gets us excited). 

It is important to note that not everyone agrees on carbon capture. The topic has remained divisive, with some climate researchers, campaigners, and environmental advocacy groups arguing that carbon capture technology is merely a distraction from finding a long-term solution. Some of these criticisms are well founded; opponents quickly point out that proven technology has existed for decades yet still faces the same economic challenges that it did decades ago. These challenges are only exacerbated by the recent rise in materials and manufacturing costs, which can put carbon capture projects’ financial viability on a razor’s edge. However, despite these headwinds and counter-arguments, we see plenty of reasons why the future of carbon capture is more promising than ever.

All roads lead to a cleaner future

Firstly, no one panacea exists for all the difficulties and challenges associated with mitigating and adapting to climate change. At Matū, we believe a portfolio of technologies and approaches is needed to address the decarbonisation challenge while supporting sustainable and competitive industries. Carbon capture should have a place in that portfolio, as it is one tool in the arsenal of the multi-billion-dollar global investment to fight climate change. The International Energy Agency’s Sustainable Development Scenario defines a pathway where carbon capture systems deliver 15% of global emissions reductions. 

Additionally, many criticisms against carbon capture are directed specifically at direct air capture, which is challenging when the CO2 is at low concentrations. However, Captivate focuses on emissions at the point of production/release, which have a significantly different gas profile and see much higher concentrations of CO2.

Success is in the transition 

Despite climate change being here and now, an energy transition away from fossil fuels is slow. The energy transition involves society gradually moving from fossil fuel to renewable energy sources to reduce GHG emissions. Carbon Capture has become mission-critical in bridging the energy transition in heavy industries like power, steel, cement, oil, and gas. These industries form the basis for prospering society. They will remain central to economic development but must also be a significant part of the clean energy transition. Emissions from industry can be among the hardest to abate in the energy system due to process emissions that result from chemical or physical reactions. The conundrum is that while the future production of cement and steel must be more efficient and emit much less CO2 if climate goals are to be met, demand for cement, steel, and chemicals will remain vital to support a growing and increasingly urbanised global population. 

Captivate, in particular, stood out for all the right reasons here for its potential to mitigate the emissions from the heaviest-emitting industries. It may be one of the most cost-effective solutions large-scale industries can deploy to reduce emissions. Technologies like Captivate’s mean net-zero emissions from heavy industry will no longer remain a pipe dream. Carbon capture is expected to contribute nearly 27% of the needed emissions reductions in the cement, iron, steel, and chemicals industries alone.

Growth on the horizon

For the above reasons and many more, heavy industries are now embracing carbon capture as a realistic pathway to decarbonisation and making significant investments. The number of CCS facilities planned across the globe has grown by 44% in 2022. While this is an impressive-sounding surge for the industry, it is only a tiny fraction of the carbon capture needed for the world to achieve net-zero carbon emissions by mid-century.

We are confident that the backing is not just there but is actively growing. VC investment alone into carbon utilisation technologies has increased tremendously year-on-year over the last three years, from US$116.2 million in 2020 to US$476.5 million in 2021 and US$699.1 million in 2022.  This investment means that carbon capture technology is now evolving and maturing like never before in its history; this will lead to newfound innovations, rapid increases in efficiency and improvements with untold potential.

Captivate is a clear example of that innovation in action, as MUF-16 is a solid-state material, meaning it’s more environmentally friendly, easier to handle, more energy-efficient, and long-lived than traditional amine-based systems. 

Our Deep-Tech Whānau

With the funding and experience provided by Matū and our co-investors, we believe Captivate presents a potent force for good and an excellent addition to an increasingly diversified global decarbonisation portfolio.

Matū, as always, has been enormously privileged to partner with some incredible founders and the broader ecosystem through this investment! We thank Massey Ventures Limited (MVL) for inviting us into the deal and preparing the company in the earliest stages. Thanks to our co-investors, NZGCP and Booster, for joining the round. We thank Matū’s Venture Partner, Andrew Chen, for all his work supporting the DD process and immediately getting to work as Chair of the Board. Of course, none of our work would have been possible without the broader Matū team getting behind the deal! 

Lastly, we congratulate Prof Shane Telfer for taking Captivate to the next level. The future is looking more promising than ever for this technology.

Further Resources