Home People Cox Enterprises’ Cleantech Team On Green Investing, Long-Term Sustainability, and Turning Trash Into Electricity

Cox Enterprises’ Cleantech Team On Green Investing, Long-Term Sustainability, and Turning Trash Into Electricity

by Holly Beilin

In a world where companies often ignore profit and raise more and more capital to double down on a specific vision, Cox Enterprises stands apart. The 120-year-old, family-run company has thrived — we’re talking $21 billion in annual revenue — through decades of changing business landscapes by constantly diversifying its businesses to stay ahead of the curve.

Cox currently has three main businesses: Cox Communications, Cox Automotive and Cox Media Group. But as its leadership looks further into the 21st century, Cox has identified a new sector in which it intends to invest hundreds of millions with the hopes of generating billions: clean tech.

“The goal with Cox Cleantech is to build an actual operating business for Cox Enterprises to diversify our revenue and cash flow,” says Will Thorburn, Cox’s Director of Cleantech Strategy and Investments.

“I came to hear about this idea of a Cleantech team that was being stood up, and frankly knocked down the door to join that team,” Thorburn tells Hypepotamus. He started at Cox Communications on the strategy side, but the outdoorsman’s passion for sustainability steered him toward the new team.

Rather than focusing on one vertical within sustainability, Cox Cleantech has several broad areas they’re directing capital and resources toward: macro-sectors like food and water, energy and agriculture.

Within those sectors, the team makes highly-targeted investments. In June, they announced a $20 million investment into Carbon Lighthouse, a tech startup that analyzes energy usage data from commercial buildings to help the building owners significantly reduce their energy costs and environmental footprint.

“It’s a huge undertaking, it’s a BHAG,” Alex Taylor told an audience during a fireside chat with Brenden Millstein, Carbon Lighthouse’s CEO, at the Smart City Atlanta Expo earlier this month.

“But it all has a financial and economic underpinning,” Taylor continued. Indeed, Carbon Lighthouse now serves hundreds of buildings around the country, doubling each year for the past nine.

A business like Carbon Lighthouse is one of the Cleantech team’s “near-term investments,” says Thorburn. They’re also looking even further into the future, investing in technologies that, at first glance, sound like true science fiction.

For example, Thorburn is excited about the potential of a category he calls “waste-to-X.” The premise is simple: technology or processes that take any kind of waste — municipal solid waste, plastics, etc. — and turn it into something useful.

“This is the kind of thing that’s only now gaining attention as a sector of its own, separate from recycling,” says Thorburn.

“What drew us to the sector was a confluence of factors creating a global issue around waste,” he explains. “If you look at population growth and waste production per person, these issues are only going to get worse. For a team with a mandate to build a business around sustainability, this mitigating waste story is a really easy one to wrap your head around.”

For example, a month after the Carbon Lighthouse announcement, Cox Cleantech made a commitment of $10 million into a company called Sierra Energy. Sierra is developing a process that essentially turns everyday trash into usable energy.

“I don’t think it gets cooler within the cleantech arena,” says Thorburn. “The idea of the huge, nasty landfill right outside the city limits running out of space resonates with everybody.”

Sierra uses a process called gasification, which super-heats the waste to break it down to its molecular level. The primary output is an energy-dense ‘syngas,’ which can then be converted into electricity. The process itself doesn’t produce any additional emissions.

“From a business standpoint it’s an exceptional model,” says Thorburn. “The company has the opportunity to accept a fee for taking the trash, so in some cases the line item is negative. Then they’re getting paid for the actual electricity.”

“When we think about cleantech, it has to have an environmental benefit, but it also needs to have financially and economic stability. Scaling any solution requires a model that actually makes money.”

In addition to the Cox investment, Sierra closed a $33 million funding round led by Breakthrough Energy Ventures, an energy-focused growth equity fund. They currently operate one facility and are starting to accept commercial contracts.

Another “waste-to-X” company Thorburn is excited about is Nexus Fuels, an Atlanta-based startup that uses a process called pyrolysis to convert hard-to-recycle plastics into new plastic feedstock, as well as fuel.

Cox has been involved with Nexus for several years, says Thorburn.

“This is a sector that’s at a pretty early stage and we’re taking somewhat of a venture approach,” he explains. “We are investing in technologies that each in its own right is capable of creating value around a problem waste stream.”

“I want to help those technologies commercialize and scale, ultimately with the idea of operating a business.”

The concept of a venture portfolio naturally elicits the question of acquisition. Thorburn says that not only is it on the table, it is the expected outcome of one or more of these investments.

“This is absolutely not something we’re investing in because we just want to watch it. We want to be buyers and operators and to help these businesses scale and actually own them.”

“My specific mandate, the Cleantech team’s mandate, is to have north of $2 billion in revenue over a ten-year term. We’re interested in investing in and ultimately acquiring businesses that will help us get there,” he says.

“What we’re hoping to do by investing early is get to know the company, the team, and the tech and help the business along the path from pilot to commercial viability to commercial scale.”

You may also like