LanzaTech announces $60 million equity investment

By LanzaTech | December 11, 2014

The New Zealand Superannuation Fund has made a $60 million equity investment in leading gas fermentation company LanzaTech.

Founded in New Zealand in 2005 and now headquartered in Chicago, LanzaTech turns waste gas from steel mills into ethanol and other high value fuels and chemicals.

“LanzaTech is one of the most exciting companies New Zealand has produced, with significant global potential,” said Nigel Gormly, NZ Super Fund head of international direct investment. “We’re proud to continue the New Zealand connection and to be able to assist in LanzaTech’s ongoing growth.”

LanzaTech CEO Jennifer Holmgren said, “As we continue on our path to commercialization, we are tremendously excited to include the NZ Super Fund as one of our investors. Our roots and hearts are in New Zealand, and this investment will allow us to expand and develop our global platform, increasing our ability to play a part in New Zealand’s energy future.”

The LanzaTech investment is one of a series of ‘expansion capital’ investments made by the NZ Super Fund in recent years, providing capital to privately-owned, early-stage companies that are seeking to grow, but are not yet ready to list on the public markets.

While only around 1 percent of the overall NZ Super Fund is invested in expansion capital, Gormly says it is appropriate that it is part of the mix. “The Fund is well diversified and expansion capital’s risk/return profile is a good match for growth-oriented investors with a long time horizon.” Previous NZ Super Fund expansion capital investments include stakes in United States companies Bloom Energy and Ogin, Inc. In New Zealand, the Fund invests in expansion capital via investment managers Pencarrow Private Equity, Pioneer Capital Partners and Waterman Capital.

Gormly said the Fund was also attracted to LanzaTech because of the exposure it provides to the waste-to-energy sector. “We are actively diversifying into alternative and non-conventional energy, alongside traditional energy investments.”

Silicon Valley-based Khosla Ventures remains the largest shareholder in LanzaTech.  Other New Zealand investors include Sir Stephen Tindall’s K1W1 fund.

Welcoming the NZ Super Fund investment, Sir Stephen Tindall, one of LanzaTech’s first investors, said. “LanzaTech has been highly successful and the NZ Super Fund’s investment is a key step in continuing the company’s progress and global expansion. We have been involved with LanzaTech from the outset and take great pride in its success - LanzaTech has an important social contribution to make in reducing air pollution and at the same time turning waste gas into valuable products.”

LanzaTech’s first commercial plant is targeted for operation in 2016.

The investment will be managed by the fund’s in-house team.