Velocys, a sustainable aviation fuel technology company, has been taken private in a £4.5 million deal which also sees it secure £32m of growth capital.

The government-backed firm, which posted a £14.5m operating loss for 2022, has been taken over by a consortium featuring Carbon Direct Capital, Lightrock, GenZero and Kibo Investments.

Velocys’ Fischer-Tropsch technology is compatible with multiple project types employing diverse feedstocks, including municipal solid waste, woody biomass, and CO2 & green hydrogen.

The company is behind plans for a waste to sustainable aviation fuel plant in Immingham and has also invested to scale its reactor facility in Plain City, Ohio, to ensure a stable supply of reactors for delivery to SAF project owner-operators around the world. 

Its 52,500 square foot reactor facility will be able to produce an initial 12 reactors per year, which is the typical requirement for the operation of a commercial-scale SAF biorefinery. There are also plans to ramp up capacity of the facility as demand for SAF grows. 

Henrik Wareborn will continue to lead Velocys’ management team as the CEO.

“The deal secures the future of Velocys, our pioneering technology and our industry leading talent, allowing us to keep our foot on the accelerator as we continue to lead the way in innovative sustainable aviation fuel solutions as we enter an inflection point for our industry,” said Wareborn. 

“For the past 20 years Velocys has had a critical role in the development of reactors, technology and processes which enable the efficient production of lower carbon SAF, and we and our new partners are excited to see what the next twenty will bring.”

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Josh Dienstag, chief investment officer of Carbon Direct Capital, said: “We believe drop-in fuels are the most promising, scalable solution to decarbonize aviation and to deliver climate impact the soonest.

“Velocys is a scarce supplier with the technology readiness, production capacity, and leadership team to deliver for SAF project partners. We are pleased to be part of this investor consortium and to support Henrik and the Velocys team.”

Kevin Bone, partner at Lightrock, said: “We are delighted to be partnering with Velocys as it takes the next steps in its journey to becoming the leading provider of SAF solutions to the aviation industry. 

“This critical objective requires long-term backing with the requisite experience of supporting industrial companies as they seek to realise their potential. I have no doubt that this consortium is best placed to do just that.”

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