Maximilian Kufner, Co-founder & CEO @ Again

0:00Maximilian Kufner:We are streaming on X, LinkedIn and YouTube and it is great to have you. Hi, nice to be here. Thanks so much for the invitation. No, our pleasure. Great to meet you. Yeah. Why don't you just give us a quick intro into who you are and what you're building? Yes, happily. I would like to say I'm by far the least interesting part of my founding team. My other two co-founders are both highly successful scientists and the leaders in our field of gas fermentation and microbiology. So they're PhDs and professors from the Danish Technical University at Copenhagen and from Stanford. I, on the other hand, was a very boring venture capitalist before I took on this job.

0:41And we as a company were essentially, you know, we're kind of a hybrid between all sorts of different multidisciplinary technologies. We utilize biotechnology, catalysis, so chemistry, and also computational biology to build a platform that allows us to help industrial businesses convert their waste gases into valuable clean products. So what that essentially means in practice is there's kind of two different pillars to the business. Pillar one is we build an infrastructure technology where we will co-locate. These are hardware assets. We will co-locate with a large industrial emitter. Think like an oil refinery or a petrochemical plant or something like that.

1:19We put down these bioreactors and we pump the bioreactors full of CO2 gases and other gases. And we essentially use a fermentation process, right? Just like making sauerkraut or beer or whatever your thing is, just that we ferment carbon dioxide emissions into clean renewable chemicals that we then sell into industry either directly to the emitter or via our third-party distribution partners. And then the second part of the business that we built on top of that is the platform where we make a product called acetate, which we can then transform into different products ourselves. But it's also actually a very interesting replacement for sugars.

1:56So it's actually as a biochemical feedstock, has up to 33 % better yields than traditional sugar, which is interesting because it allows us to actually improve the unit economics of pretty much all biofermentations downstream from us. And then not making it from sugar, which is incredibly painful from a landmass and land user perspective. and instead making it from waste CO2. So that's kind of what we do. Yeah, happy to answer more questions and tell you more. I can talk about it all day. Amazing.

2:25Maximilian Kufner:So just quickly, do you capture the CO2 at source, did you say? Exactly. So what's different to like, if you think about, you know, carbon sequestration, for example, or something like that, they'll typically, you know, capture the CO2, they have to scrub it clean. It's the scrubbing, it's the scrubbing the CO2 clean that's a huge pain and really expensive. It's not actually technologically that challenging. It's just an energy cost question. What's great about our process is because it's a biological process, this bug needs to eat CO2 to survive. And so you can pump the gases straight in. So we don't have to clean it up or do any of that kind of stuff.

2:58We literally just pump CO2 into the bioreactor with all sorts of different stuff in it. And that's how our process works.

3:05Maximilian Kufner:Amazing. And how much CO2 are you capturing and transforming? Oh, that I actually don't know off the top of my head. I think I wouldn't even try and guess it right now. We have three production sites. So one is already up and running. It's been running for about one and a half years out in Copenhagen. So we're capturing the CO2 from Copenhagen's leading wastewater facility treatment and turning that into acetate. And then our second project is going live in one month and three days. That's our FAST commercial, fully scaled commercial project. So you call that your FAST of a kind. That's in partnership with Dow Chemical, one of the world's leading petrochemical manufacturers, as well as Macquarie Infrastructure, who actually have a joint venture that we're partnering with.

3:50And then Helm, which is, if anyone hears from Germany in the chemicals industry, it's one of the leading global chemical distribution farms. So that'll be live in about a month. And then we're also building a product project out in Norway where we will be capturing CO2 and making a bunch of different products, plastics, materials, fuels, et cetera, which will be live next year. So we're already in the commercialization phase, essentially.

4:13Maximilian Kufner:Amazing. That's very exciting. Super cool. I was curious, I saw, if I understood this correctly, that you actually were one of the kind of founding investors or sort of incubated this company initially when you were still an investor. Can you tell us a little bit about that story? It's super unusual and super interesting. Yeah, I think there's a few things that come together. One, I worked at a firm called Atlantic Labs, which some of you may know if you've been in the Berlin ecosystem. We started getting very excited about deep tech in around, I mean, we always did a little bit of deep tech, but we started getting really excited about deep tech in sort of 2021, late 20, 2021, 22, which was kind of the stuff that I also focused on a lot.

4:59I'm a huge sci-fi nerd, so I was lucky enough to invest in space companies and rocket companies and ultimately ended up in sort of life sciences and computational biology. And it's through that work that I met Torbjorn and Alex, who've been working on the IP, the R &D behind our business since 2011. And after 10 years of R &D, they were ready to spin out the company and start the business. And, you know, when they came to us and they pitched, well, actually, I reached Torbjorn originally because I was looking at the space. So I pinged him an email. I was like, look, I really like what you're doing.

5:28You know, what are you thinking about, you know, the company and where do you want to go? He essentially said that he had this, you know, this very robust technology, but he wasn't exactly sure how he would go about scaling it up. and we as a firm are always quite flexible in our models we were quite flexible when I was there which is you know I basically had the idea having been a founder once before I pitched internally and I pitched to Torbjörn I said look guys how about I can kind of join you part-time we figure out how to build this company together and if it works out it works out if you know you and me don't work out then we'll find you a great CEO and he'll take over the business or help you run the business and and initially at the time so what happened is we made the pre-seed investment this is sort of October 2021 and I scaled down my investing activities and I spent half of my time commuting to Copenhagen and helping Torbjorn kind of figure out what to do hiring the first hires developing a strategy for commercialization all this kind of stuff and at the same time you know I was very happy in my venture capital role but I got all my best buddies to interview for this job as the sort of commercial co-founder.

6:32One of them ended up being a super early or like the first hire in Europe for OpenAI. So that actually went good for him. But everyone else, I kept saying, you know, this is a once in a lifetime opportunity, you should do it. And eventually, after about a year or so of this kind of hybrid system, you know, Toggin and Alex and I got along so well that they asked me if I wanted to join full time. And that's how we did that. So it was kind of like a one-off situation. But I think that, you know, a few other firms have done these kind of models relatively successfully where the GP or the partner kind of goes in and out of founding companies.

7:02And I think for us as a firm at the time, it was also an experiment with seeing how that could work. And I think it's gone well. So yeah, that's a bit about it. Yeah, it's a really great story. And in the end, that's like the most high conviction investment you can make is not just like, here's the check, but here's also the majority of my time. And by the way, now all my time. And also pretty much all my savings went into the first round as well, personally. So I fought tooth and nail against the LPA to be allowed to also invest personally.

7:35Maximilian Kufner:Amazing. That's amazing. Yeah, you actually don't get much higher conviction than that. What's it been like? I mean, how does it compare to your role as a VC? Yeah, it's way less chilled. There's less going to conferences. there's less like professional tweeting that you get paid to do you actually no I mean I I just I think that you know as a journey it's been phenomenal one of the lucky things about what we've done here is that the technology was already so mature that it's been a pure play commercialization journey so we didn't have to go through this thing that a lot of you know a lot of deep tech R &D startups they start at the point of a few brilliant scientists having an idea and then you actually have to spend sort of 10-15 years actually commercializing technology getting to various proof of concepts.

8:22You know, take biology, for example, there's a very common way to ramp up a biology firm, you'll typically start at like a theoretical concept, and you'll go to what's called the benchtop, and then sort of lab scale, pilot scale, demonstration scale, commercial scale, right? These are different sizes of bioreptors, essentially. We went straight, we started the company, went straight to demonstration scale, right? So this is basically, you know, saving you five to seven years of a typical company in that journey. And so it's really been a function of, obviously raising capital, which I'm sure we'll talk about, building commercial facilities, building partnerships, and scaling up the business.

8:57And it's not been the whole process of, you know, do we have a technology that works, all that kind of stuff. So it's been very fulfilling. We're, you know, headquartered in Copenhagen, opened our office in Berlin, and about a year ago decided to also open our office in Houston. And so there's been a lot of international travel, and we've done a good job at building great teams on all three of those locations. So very happy with how things have gone. How many people are you on the team now? So I should know this. We're about 40 to 50 full-time employees. And then we have about currently on the project about 50 to 60 contractors working for us in the final stages of the project.

9:37One of the great things about the way you've developed the business is that we, you know, TopCo can actually remain relatively lean. So we don't need to hire a huge amount of people to build out additional projects. But we have this kind of very traditional, if you look at an asset and infrastructure business, we have this traditional Topco asset structuring where everything's in the SPV. So a lot of the headcounts scale up for each project will be essentially the operators and the on-site staff that go into the underlying asset SPV.

10:03Maximilian Kufner:Makes sense. That's interesting. And what was the rationale about moving or setting up in Houston as well? well this is where i might be quite a bit controversial for this this podcast because you know i think one of the things we saw relatively early on is that it's pretty hard to build a successful deep tech company in europe and it's not it's not it's not really in our opinion at least it wasn't so much a regulatory problem i mean i have my gripes with the european union and and i'll use any time i can to say that i think that their um their Their policy approach is completely stupid to climate change.

10:39But that's actually not the reason we moved to the US. The reason we moved to the US is because we kind of identified about a year and a half ago, when we started making the shift from being a pure play science R &D company to a engineering business that needs to deliver and develop these projects. We realized that the epicenter for engineering talent is not in Europe, it's in Houston. And instead of brute forcing trying to, I mean, we did this. we've, to be fair, most of our leadership team, even in Copenhagen, are Americans and come from industries where, you know, biotech in San Francisco or in the Bay Area, right, or engineering in Houston.

11:15But we realized that to find the biggest amount of talent density, we had to leave the EU rather than the other way around. Then there are additional things that come on top of that, like permitting is significantly quicker. You can get a permit in Texas in six weeks. That will take you like nine months in the US and Europe. And there's a bunch of other stuff. But it was really, firstly and foremost, a cultural thing where we decided to go to the place where we think there are simply the best engineering talent in the world. And, you know, a lot of young, hungry engineers who have a can-do attitude, which is not something you get in like, you know, some of the older industrial parts of Germany, which we also looked at.

11:52Yeah. Yeah. I mean, it's not totally controversial to this show because I'm also in the US right now. I think we see the benefits of this side as well. But just curious, because you were just pointing to it, what is, if you had to kind of pick out one thing that the European Union towards climate policy should change or should do better, what would it be? I mean, I think what the European Union generally got, where do I start? What the European Union generally got wrong is that they tried to be very dogmatic about saying these kind of technologies have the right to exist and everything else doesn't have the right to exist.

12:34And what that ended up looking like is that, you know, Europe was the front runner with regards to pushing climate regulatory policies down industry's throat to huge detriment. You know, if you look at Germany historically was the leader in chemical production and now we don't produce anything anymore. You know, companies, global leading companies like BASF are shutting down their chemical production in Ludwigshafen because the energy costs simply don't sustain it. But the main problem they did is they essentially said, OK, if you want to build a climate technology business, the only thing we will allow you to do is build a carbon sequestration business.

13:12That's the thing where all the climate subsidies go towards. Everything else doesn't really exist. Green hydrogen doesn't really exist. Climate utilization doesn't really exist. And that's because the European Union and the people who make all these academic exercises and spreadsheets in Brussels, they didn't think pragmatically about letting a free market operate. They thought, hey, this is the only technology that has the biggest outsized impact on being green. And so we're only going to promote that. And we don't want anything in between. Right now, realistically, if we want to solve anything meaningful on climate, we have to have a big toolbox of different approaches.

13:44there'll be companies like ours that utilize technology that utilize carbon that you know vastly reduce chemical vastly reduce carbon outputs but don't necessarily make it negative or sequester it then there'll be green hydrogen there'll be electrification there'll be a bunch of stuff and so europe essentially set this one policy path into into play 10 years ago and they haven't they haven't deviated from it meanwhile the the inflation reduction act in the usa which by the way everyone thought would be curtailed through the latest administration has actually been boomed through it, the Inflation Reduction Act essentially has different tax credits and subsidies for every kind of climate technology.

14:22And it's a very classic American approach. Let the free market do their thing. We'll help it out a little bit, but we're not going to try and, you know, be academic about what we think the best technology is. And I think that's been a huge mistake by the US and myself. And by the way, a bunch of other businesses, you know, are either moving to Houston or moving to the Middle East or moving, you know, any, basically any founder that as any meaningful promising climate technology, you know, is getting out of here. That's pretty much it.

14:47Maximilian Kufner:Interesting. And so is that where you see the future of the business long term and the majority of your business, you see it kind of being permanently based in the US? I mean, I think that's where it becomes complicated. I'm a European, we're a Copenhagen based company. You know, we're very proud to be a spin out of the Danish Technical University. We do work with the European Union. So one of the ironies, and I'm sure I'll get in trouble for saying this, one of the ironies is that we have a 43 million euro grant project to build that we're building our technology out in Europe, which technically is intended to at some stage influence the policy decision around carbon utilization.

15:25so I wouldn't be as you know I wouldn't I wouldn't say whether long-term company is moving from a headquarter perspective or anything like that I just think that you know at given the current landscape we're in the currently and the current energy climate uh current energy policies and prices in Europe you know it's not a competitive region to be in and um I would very much welcome it if there was you know changes the regulatory system that would allow us to be competitive again and we just build huge amounts of energy to be economically competitive yeah do you see do you see any movement from the european union in that direction like is that something that is an understood problem no we we had we had a lobbying firm we hired lobbyists onto the team we did the whole spiel and the general feedback was like you know you have you have two fundamental problems if you want to make any sort of update to the eu regulatory policy for example climate change you have to agree with 27 member states that's a huge pain in the butt But on top of that, you know, the European Union can't afford to give subsidies the same way that, let's say, the Americans can in the IRA.

16:29So one of the lobbyists that we hired basically said that it's a sort of tragedy of the commons problem combined with not having the money to really do much about this problem. So it's much easier to basically say, hey, we don't like your carbon emissions, we'll tax you, than try and, you know, find some sort of incentive problem that massively curbs production.

16:51Maximilian Kufner:Interesting. That's a shame. It is a shame. We had Andreas Klinger on last week from EU Inc. who's trying to build the whole 28th regime across Europe, the pan European entity. And so, yeah, he's definitely making progress and that whole kind of organisation is making progress, but it sounds like it has been so painful. The bureaucracy and to your point, getting all 27 member states, getting them on board is what they're going to have to do. and it is going to be such an uphill battle. But we also wanted to talk a bit about fundraising, right? Because you raised a big round last year. I think it was, what,$40 million?

17:30Maximilian Kufner:What was that like? You know, aside from the regulatory stuff, you know, within Europe, what was the fundraising landscape like for raising for this type of business? I mean, it was better 18 months ago than it is now. I think, obviously, you know, the Northvolt bankruptcy sort of became a massive headwind for anything climate related. I think that plus the new administration that was perceived to be heavily anti-climate, but kind of low key isn't as anti-climate as we thought they would be, are two headwinds that I'd say, you know, have shifted us in a different direction. And I'd also probably say that, you know, a lot of most venture dollars are currently going into AI.

18:06So I'd say 18 months ago was a better time. At the same time, you know, what we found is this huge amount of appetite for businesses that are agnostic of reliance on a regulatory system. So one of the things about our company is that regardless of where we're at, you know, the CO2 utilization piece is for most of our partners, not actually interesting to them from a climate perspective. And that's not what we pitch them. In fact, when we're in Texas, we have billboards right now in Texas City because we're hiring for operators for our plants. And, you know, nowhere do we mention CO2 because the advice that we got from everyone is people think of CO2 and CO2 utilization, clean technologies, as a business that's trying to take people's jobs.

18:47And that's not what we're about. You know, what we essentially do and the biggest value to our industrial partners is we're essentially their waste valorization, right? Every company wants their feedstock independence. They want supply chain resilience. They want to be able to utilize, vertically integrate up or downstream. And so what companies love, like, you know, like our partners in Texas that we're working with, is that they can take their own CO2, turn it into their own feedstock. And so, you know, that's actually the great thing about our business and why I think that a lot of investors, independent of them being climate technology investors or not, what they really like about our business is that it has nothing to do with that.

19:21That's a nice side effect from a regulatory perspective. And obviously, we'll lean into that narrative. But really, at the core of what we do is we provide businesses with waste valorization and supply chain resilience by utilizing their CO2 feedstock and opening up a new revenue stream for them.

19:38Maximilian Kufner:Amazing. Very cool. Yes, I guess it's a bit like the art of the storytelling, right? And how you can get people on side, hire the right people and convince them that what you're doing is a real genuine value add. and are you looking to fundraise down the line do you need more money to sort of build more plants to really sort of commercialize were you happy where you are right now no i mean you know i i wish i wish that we were in a business that we didn't need to raise capital in order to to generate cash flows but unfortunately that's not how it works that's the the truth of our company and you know any company that's trying to really do physical things whether it's us whether it's a spacex whether it's anyone you know you need to you need to essentially build that manufacturing capacity and that costs money.

20:20And so, you know, going forward, we're not there yet. But, you know, at some point next year, I'm sure we'll be back in the market to raise more capital, to build out more production facilities.

20:28Maximilian Kufner:And would that be from traditional VCs or other type of finance partners that you could sort of hit up for that type of cash? Yeah, it's a great question. I mean, you know, from a purely selfish perspective, I want to minimize dilution. So if I can go non-dilutive, the more the better. You know, realistically, how that works is, you know, one of the challenges I know there's, you know, a lot of people talk about the first of a kind financing gap challenge. I actually think that's not even that that that's the smaller of the problems. I think the transition into the new asset class is actually the harder one, which is how do we deal with the fact that we have venture capitalists on our cap table who want, you know, an annualized blended 3050 80 % return?

21:04And how do you do you know, how do you deal with assets that tend to be, you know, generating any, you know, low double digit returns. And so you know, for us as a business, that's a transition we're currently trying to figure out. That's what I know a lot of other people are also trying to figure out how do we marry those two up? And I think that's actually been the core of my focus for the last few months and is the core of my focus at the moment to find an elegant way to move it to the Series B. Essentially, what we've done is, especially in a month and three days, we'll have fully validated our technology so that it's no longer a question.

21:37I don't want any investors in the future to have to become experts at biotechnology and much rather be able to give them the showcase, hey, this works, you know we've now commercialized the business and it's much more of a question of how do we capitalize it most effectively going forward which i always like to joke internally you know one of the biggest challenges for climate technologies isn't um isn't the technology itself it's a financial problem right it's not a tech problem so yeah and does um does being an

22:03Maximilian Kufner:ex-vc give you a sort of leg up or advantage when dealing with vcs and you kind of know the way that they think you know they want you know that they're kind of you know that their responsibilities to their LPs does that help you manage those conversations ask my board members ask people who have asked the people who have who have both invested in me and especially the ones who have passed on us um I don't know I think you know you do learn some tips and tricks I think you know everyone Paula you're a VC you know you teach your founders to try and run a process and to keep you know keep information flow tight and there's some things that I'm sure does help um but everyone has different style about how they do that you know some people you know the greatest fundraisers in the world you know will often not be sees so um yeah everyone figures out how to do it yeah i think there's like i think there's like some clear don'ts that are great for everyone to know but i think beyond that it's what are the biggest don't um for me like one big don't is bringing or looping in any sort of fundraising advisors.

23:08So these intermediaries, I feel like there's actually, especially in deep tech where people are very researchy, they might sometimes, and they're not so close to the typical startup ecosystem, they might get lured into those sort of setups where they get told that they need that. I think that's, for example, a big don't. The founder should be the immediate line of communication there, at least in my opinion. What do you think? What's a big don't for you? Well, no, I mean, it's funny. I remember when I was a VC and I started my venture capital career during the pandemic and, you know, virtual meeting rooms were, for example, you know, we were all thinking we'd start living online.