Harvey Hodd, founder at Rivan: Rivan raised a £25 million Series A

0:00Scaling Europe:Hello and welcome back to Scaling Europe show presented by DL. Today I've got an amazing guest, serial entrepreneur Harvey Hodd, now founder and CEO of Riven, UK startup building here in London, building synthetics fuels. It's already built the largest synthetic natural gas plant and is now aiming to become the first company to inject synthetic gas into the UK grid. You've got some great news to share today, Harvey. Yeah, thank you very much for having me, Seb. Yeah, we're announcing our£25 million Series A, led by IQ Capital with Plural, one of our largest investors for our seed round. And yeah, I mean, amazing news for us to scale our technology and hopefully kind of a big step for the UK in general as well with synthetic fuel production.

0:41Scaling Europe:Amazing. It's been less than a year since you announced the£10 million from last year. What's happened since then? What's enabled you or unlock this round for you so i think um so when we spoke initially uh but yeah about a year ago and when we raised our seed round uh we raised it really with the we we had a core technological kind of hypotheses okay we we think we can we can massively um massively scale domestic production of synthetic fuels uh with this vertical integration uh or yeah vertically integrated strategy um but But we didn't have a load of hardware and we hadn't validated it. And really, our seed round was build a product, make sure that works and build huge customer demand to really enable manufacturing scale in the future.

1:26We've now done that. So I think for the last year, we focused on just insane amounts of engineering. So we operate from today, we operate from a 20 ,000 square foot facility in South Fermansey. We're about 35 engineers, work here every day. and we basically only worked on the product, validating all the core hypotheses, making that work. Like you said, we now have the largest synthetic natural gas plant in the UK, which hopefully is a big kind of validation point. And our next stage is really taking that product and delivering to the market. So we have some very, very large customers and we now need to show that we can stay on manufacturing.

2:05So that's the next step. And pretty much, therefore, all we've really done is just focus on the engineering and the product.

2:10Scaling Europe:And can you talk, for people who aren't familiar with what you've built, can you give maybe like a one minute, two minute overview around, I guess, a bit about the science and the thesis behind it? Sure. So firstly, Riven is a synthetic fuel producer. And our aim is to produce synthetic fuels for any industries you can't electrify. So things like chemicals, cement, steel, long run aviation, rocketry, et cetera, where batteries and renewable electricity probably just can't operate for a number of reasons. and normally or historically synthetics was a very very expensive because you need vast amounts of energy and our technology basically vertically integrates that entire process from energy coming in so you have huge amounts of energy electricity mostly from solar or wind or hydro or nuclear or really whatever produces hydrogen and co2 they're the two core fundamental feedstocks combining together in a reactor and inject that fuel in our case we're starting with synthetic natural gas into the UK and European gastrointestinal and transport that all over Europe.

3:08I guess the difference with Riven is that pathway is quite well known, but the difference is that we vertically integrate the entire process. We own all of our own energy generation, off-grid solar, and we also vertically integrate all the engineering. We manufacture all of our reactors, electrolyzers, direct air capture systems, etc. from scratch in the UK, and therefore we can operate a lot quicker at a much lower cost because we own every part of the process. um yeah that's that's us in a nutshell and we intend on scaling this to to country stale and fossil fuel prices like that's really our aim we want to have a huge impact because we can scale this in the limit and we want to do so really cost competitively with fossil fuels amazing and so

3:46Scaling Europe:you spent the last year kind of building this uh site that you have in bourbon z what have you what have you demonstrated i guess now what have you proven that has now been like okay now the next thing is scale we yeah fundamentally we've proven that the lcom so the liberalized cost of methane is far below anyone in history so we believe that now we produce is the cheapest e-methane in history and which in in it we validated that but really we validated that with a machine that we built from scratch that we can make thousands of so i think the core question mark for a year ago 18 months ago was can we produce a system that works and can we do so at cost and both of those things are now true and which means really we now need to make more of the same system and scale this out.

4:30So a lot of the last year has been on engineering hypotheses. The next year will be on manufacturing scale.

4:36Scaling Europe:Got it. And you mentioned that you built a lot of customer demand. What does that look like? So are you sort of, because I imagine you're not at a point where you're selling gas to people yet or synthetic fuels. What does it look like? You know, like what does the commercial side of a business like this look like? So we, yeah, today we sell the end molecule, the e-methane or synthetic natural gas. And there's a huge amount of customers that we could sell that to so really heavy industry that utilize it for chemicals and steel production uh to energy traders that then go and find homes for it in the future um we generally focus on areas that like i said before that you can't reuse anything else for um and today our customers are large industrials like that um that will take a you know a long-term contract with us because they want to secure supply at a specific cost at a specific carbon intensity because we're carbon neutral and take that from their instance you take a steelworks if they keep all infrastructure the same because we're a drop-in replacement we're chemically identical meaning they can in theory decarbonize their entire process overnight just by switching a supplier to us and yeah we produce on these fairly large projects we inject into the the european gastrointestinal and then the molecule finds its way to that customer so that's fundamentally the process.

5:54And currently, the market is incredibly limited by supply. We need far, far more of these fuels. And hopefully we can take a dent in that.

6:02Scaling Europe:And how important or how impactful has the wider geopolitical situations been? I mean, we're seeing how fragile prices are. We're seeing an increased, I don't know, sort of level of chaos in geopolitics, which is having really big knock on effects for energy. How important has that been in terms of like signing contracts or getting investment has that played a real tangible impact i think it's definitely an accelerant albeit really what we're seeing is a local maxima that actually has been in play for decades now in that we're seeing this uh really key concentrated area of energy price hikes and and ultimately we're all going to feel that especially in the uk um but really this has been in play for say you know multiple decades where The UK specifically has almost zero domestic production of fuels and energy in general, meaning that, you know, 60, 70 percent of energy is imported, which means we're always exposed to market fluctuations.

6:59And then every so often you get these real pinch points of something like war or supply chain concerns, coupled with the fact that we have no storage means we're just overexposed to market fluctuations and ultimately to, you know, monopolies that we have to pay. So I think we're seeing a concentrated flashpoint of that, albeit this has been in play for many, many years, useful for us as an accelerant, albeit I don't think it really changes what we're doing. It just shows ever more importance that we need to speed up and have greater impact at greater scale.

7:32Scaling Europe:And when you look at scale and international expansion, in many ways the UK is the perfect market for this because domestic production is so low, energy prices are so high. Where else can this model work? Where else can you see you expanding into in the future? Europe is our focus. Europe, the UK is a great encapsulation of that in that so much energy is imported and domestic production is low, like you said. But really, that's a reflection of the entirety of Europe. 60 % of all Europe's energy is imported. Yes, you get greater renewables and solar and things in areas further south near the equator, like southern Spain.

8:06but fundamentally there is very little natural resource of you know fuels or gas or oil which will fundamentally be required for these heavy industries for a long while so i think europe in general um europe also has great infrastructure uh in terms of distribution for us um and because of that i think we'll stay here for you know a long time a long time i think we want to really champion european industry and i think that's important because often you know startups that are well funded that are scaling quickly often look at these growth markets like Asia in the US and things like that I think we're we're we're different uh we're atypical in that instance where we will focus almost entirely on Europe and almost entirely for now on the UK amazing and you

8:47Scaling Europe:talked a bit about price how you know how similar to the is the price currently from your what you're building to sort of the market prices of fossil fuels what's that gap what does that look like how do you kind of hit parity if you're not there already we're close so our first deployment will have a slight premium on the market. I think naturally as we kind of ramp up our production and ramp up manufacturing to realize some of those cost reductions. But we're aiming to be on par or better than fossil within Europe in the next two to three years, far, far quicker than many realize. I think fundamentally because we own all the inputs.

9:25Really our cost basis is in our hardware and our process efficiency, which we completely own. So you take it from this like geolocality constrained problem which is where oil and gas is and turn it into an engineering manufacturing problem which we we we really own and focus on um and yeah we we imagine uh we we're focused on being competitive with fossil with gray fossil fuels coming into europe within the next two to three years which i think if you have see the knock-on effect downstream of that for industry and innovation within the uk and within europe it has huge huge implications so i think the faster we can show that um not really speak about it but show that we've got hardware on the ground that

10:02Scaling Europe:does it i think the better and you've done this in a remarkably short time frame you found it in 2024 yep yeah 24 we're actually i think today uh we're day 632 something like that we have a counter um which means yeah it hasn't been that long um but i think we have just a general dna of doing things quickly. I think it's also energizing. Great people love working in very kind of intense, fast paced places. And also by virtue of the DNA of the company being entirely vertically integrated. So when we really want to get something done, often we own that process and we take responsibility and go and get it done ourselves.

10:41It means we can operate a lot quicker and really remove the kind of narrative driven idea that hardware takes a long time and everything should take the time that everyone says it does and actually if we can reason effectively with good resources and great people i think oftentimes you can find many efficiencies and move a lot quicker so yeah it's been very important to us what do you think has unlocked because you know you talk

11:03Scaling Europe:about this being hardware this isn't just hardware where you're building prototypes you built a plant right you know there's not as it's quite different from saying it's trying to build a drone or something in the sense that you've got big machines big bits of land 30 engineers what do you think has unblocked you in terms of speed? How have you been able to move quickly? Great question. We try... Pretty good question. I think, number one, we optimize for engineers that are, quote-unquote, full stack, not in the software sense, but in the way that they can do everything in the entire chain. So go from, like, technical calculations and drawings all the way through to, you know, MVPs and 3D printing models at the end of the day and, you know, own the entire chain end-to-end.

11:47so they have to hand off i think that adds massive speed um but also we just optimize for agency uh the engineers that can do everything and also have to drive an agency to go and find where the weak spots are that fundamentally is a cultural dna has helped a lot i think also um i think what's interesting we're seeing it now is like you said we're not just engineering we have manufacturing we have deployment we have infrastructure we have engagement with third parties i think there's a you know it's a complex mosaic to bring together i think really what we found is if you can vertically integrate all of that you have this emergent behavior on top where everything integrates a lot a lot better we're not piecemealing everything meaning that um when we think about our deployments is actually also part of our engineering and our manufacturing and our finance and our um permitting strategy and they all align which adds just the level of speed i think to everything it's like a like a unifying data layer underneath everything which has helped so great people good dna good cultural dna to move faster and also just the environment to do so and tell me a bit

12:45Scaling Europe:about the new plant can you call it a plant it's like a factory facility that you're now planning yeah uh yeah we we move into it in the next month or so so it's called production base one and it's our first manufacturing facility uh it's it's scheduled to do about 50 megawatts a year so about a megawatt a week which um you know is a massive step i will be the largest manufacturing facility of this type of product in europe potentially in the world um and it's really just that next stage in our trajectory and that we've you know gone from a hypotheses of kind of quite complex engineering we've now validated that to really scale this up we need to make more of the same system that's what this plant will do hopefully it will also act as like you know as a catalyst to show that this can be done rapidly at a good scale and also it's in London which is rare and I think we've kept it here because we have pretty much all of our engineers under one roof I think to move fast, we need engineering and manufacturing in lockstep.

13:42And yeah, it will be a real learning curve to get the assembly lines up and running, to get the test facilities, all fabrication. Basically, we'll take in raw materials and metal in one side and out the other end comes, you know, a chemical, a modular chemical plant. And we'll do that every week. So I think it will be a challenge. But yeah, a massive step for us before, you know, much, much bigger steps in the future.

14:05Scaling Europe:And what's the timelines for that? As in this place or in the future? As in getting the next plant up and running, when do you expect it to be at capacity? Sure. So like I said, we move into our manufacturing facility in the next month or so. There'll be ramps over the next few months. We have all the equipment and we've designed it all already. We intend to start making systems almost immediately. There'll be testing and lag times on that. But we want to start deploying at the end of the year on a commercial scale. So we're talking probably six months or so to start getting our systems that we're manufacturing from scratch with a domestic kind of sovereign supply chain onto the ground, readily generating, producing invested fuels domestically for the UK within the next six months.

14:48Scaling Europe:Amazing. And you've tested the, you validated it in the first plant, you're now scaling it. What are the risks now? Like, what are the reasons that if you fail, you know, what are the things that have made you fail? Riven fundamentally is a complex coordination problem of multiple things, like I mentioned earlier, permitting, deployment, manufacturing, finance, engineering, all of it's got to come together really effectively. That will increase in complexity and increase in execution risk. So I think the real challenge for us is staying very, very focused on as few things as possible to get this really over the line and execute well.

15:24And also, I would say keeping an ultra high bar for talent and just talent density high. We're moving so quickly that oftentimes I think companies at this kind of stage, you know, lower that without really realizing because they've just got to, you know, appease short term project timeframes and deadlines. I think that's going to be a real challenge. I think we've got to fight that and be very cognizant of that. And if we can keep talent density high, like the people we already have are excellent and keep complexity as streamlined as possible, I think we stand a really good chance. But they're the two things that I think are probably not quite as salient as obvious to many companies, but often are just really nefarious behind the scenes.

16:06And going back to the round itself, how was that fundraising process?

16:11Scaling Europe:You know, this isn't the first one that you've raised. You've now proven a lot of the model. How was it going to investors and saying, look, this is what I've done. This is how big the opportunity can be. This is why it's so important for UK and European sovereignty. Did investors buy into it? I guess it's still quite high risk in the sense that it's like hardware, very hard hardware, which isn't typical European investor expertise. How was that process? Good learning experience. It's a fairly sizable round for the stage of business we're at or just the company age. I think the key things that helped were, I'd say, three areas that massively helped that were just a good learning experience.

16:52number one is we have great customers uh that really helped to de-risk the whole the whole business because um if we can we can show that if we produce uh scale and at cost like we will do then the market is there so that's really you know big tick with market risk because often often that's a real question mark number two is that we had product data that we could show you know this isn't a theory anymore this isn't um oh we've got some cool drawings of the cad model and a render like see our plants see the welding see the reactors they're here they're real and people are working on them. And then lastly, I think we've got an elite team, a team that really cares, has intensity, that has incredible intelligence to go after this problem.

17:27And I think when people came to our HQ and investors came to our HQ from all over the world, especially Europe, but all over the world and saw the intensity and the care and the speed at which we operate, I think that has so much more of an impact than anything I could put on a slide. And those three things, I think were really important to us and hopefully we can compound them into the next races.

17:49Scaling Europe:amazing and and what what's been the hardest part of your job so far harkening back to what i said earlier seb in terms of riven being a complex beast uh to build i think the context switching between all of the elements that we have to align effectively is always going to be a challenge it means learning velocity is like this at all times which is great it's what i and we optimize for um but it doesn't you know it's never going to get easier it's going to deliberately get harder you know the faster we push and and the the the greater scale we operate at so i think really the content switching between very complex um say you know manufacturing and finance challenges in the daily detail to zooming right up and saying okay well where are we thinking about permitting across europe over the next 10 years and what are the the the legal and and kind of planning regimes affect how does that affect that and i think that's always a challenge for me And your first two businesses are software.

18:45Scaling Europe:What are some of the things that like now you're building hardware before you started really building? What were some of the expectations or assumptions or things that you'd heard about building hardware that have either turned out to be much truer than you could have imagined or completely false? I'll start. To be honest, most of them, I think, are completely false. I would encourage anyone to get away from this abstraction or this narrative driven reasoning of hardware is hard. you know what yes i'm sure there are challenges as a you know it's costlier when you make mistakes it takes longer because you're moving atoms and often the exposure to risk is higher because you're moving big pieces of equipment that you know you you really muck that up it's challenging whereas um you know with software you're kind of the the risk exposure is low i think however saying that i i see no barriers as to why people wouldn't uh work in these areas more because one they're really important they seldom get built by young entrepreneurs but they are critical for the future of the uk europe you know the world um in terms of critical infrastructure and i haven't found anything that is fundamentally just as a result software engineers and people that have built other companies can't start these types of companies i think fundamentally if you can reason from first principles you deal well with complexity which fundamentally we you know all businesses have then i don't think it matters you know we have a huge amount of software in our business we write our own software for our systems we just happen to have other atoms as well um so i think um yeah i broadly said i think most of the reasoning is poor and i disagree with it and i think more people should be trying to build in these areas uh they're more defensible they're more important for the world um and um yeah i think uh hopefully people can see that and and hopefully riven can pave the way somewhat to that absolutely i love it i love it i love it i love it I couldn't agree more.

20:35Scaling Europe:We need more people building things like this. And I think you're a shining example of a great UK entrepreneur who's taking the challenge on head on and is solving one of the most challenging issues of our time. So Harvey, congratulations again. I can't wait to see the full facility up and running and to follow your journey even more. But thank you for joining me. Congratulations. Likewise. Cheers, Seth.

21:04Thank you.