Start-ups | DexMat

New age materials coming soon to a store near you

Today starts our mini-series on green commodities. We are kicking it off with DexMat, a Houston, TX based company spun off from Rice University, which is selling next-generation replacements for some of the world’s dirtiest and most widely used materials. 

Problem

Metals are a finite resource, but demand is skyrocketing. Goldman Sachs predicts a 600% increase in demand for copper by 2030, which is expected to spike prices for this precious resource, given that global copper output has only increased 1.7% annually since 2013, per the Goldman report. The world’s three largest copper producers are Chile, Peru, and China, each of which carries geopolitical complications as a reliable trading partner in order to fuel economic booms. 

Beyond the difficulties of procuring ore, industrial-scale metallurgy is a significant net emitter of greenhouse gasses, with steel production accounting for as much as 5% of global totals, per the EPA, and copper emitting up to 2.5 tons of carbon per ton of metal processed. 

Copper demand is significantly driven by the electrification effort; how can we migrate everything that needs energy to run off electricity? Consumers see this daily, as everything from their stoves and water heaters to gardening tools to cars are becoming electrified. And this is only the beginning as new and existing industries / infrastructures start their electrification efforts. 

The demand for these materials isn’t slowing and won’t for decades, and so any negative-emission future requires the development and scaling of alternatives in a hurry. 

Solution

Galvorn.

If you don’t know what it is, don’t worry because we hadn’t heard of it before we started to dig into alternative clean, green commodities. Galvorn is a next-generation material developed at Rice University from research by Professor Matteo Pasquali. It combines the best of metal and polymers; it is flexible and light-weight like a polymer yet conductive and corrosion resistant like metals. 

Galvorn has infinite applications in consumer, commercial, and defense industries to replace existing materials including copper, steel, Kevlar, and original-flavor carbon fiber. Once Galvorn is cost-competitive you could find it everywhere from the fabric of your heated jacket, to solar panels on your house, to wind turbine blades, biomedical devices, and military drones. 

Technology 

Carbon nanotubes promised to be the next big development that would allow us to break free from the barriers of existing materials with a create-your-own-adventure material that is infinitely customizable to your application. 

While carbon nanotubes have demonstrated capabilities that are everything we imagined, from good thermal and electrical conductivity, stability and strength, and light weight, these capabilities haven’t scaled. Turning many individual carbon nanotubes into a useful material is very difficult. Carbon nanotube density, alignment, order, interconnections, and other factors all impact the performance and application of large-scale carbon nanotube materials. If the carbon nanotubes are disordered and entangled, the most common form today, the product has high strength and flexibility but lacks thermal and electrical properties; it can be used in composite materials like carbon fiber bike frames. If the carbon nanotubes are organized and aligned it allows the material to take advantage of thermal and electrical properties, but it is difficult to achieve this orientation. 

DexMat has figured out how to manufacture dense, organized, and aligned carbon nanotube materials. They start with methane and other hydrocarbons which are processed to create disorganized carbon nanotubes (this has huge potential for carbon capture and sequestration, but more on that later). Then they’ve adapted a similar process used in Kevlar manufacturing, rearranging the disordered carbon nanotubes by dissolving them in acid, breaking the bonds between nanotubes, and aligning them using fluid processing. Their material has demonstrated that the high performance properties of single nanotubes are transferable to usable, large-scale materials.  

Products & Commercialization

Today, Galvorn is available in a few form factors. DexMat has four products listed on their website including  Galvorn Fiber, Galvorn Yarn, Galvorn Film, and Galvorn Fabric. From the outside it appears that most of their product is being purchased and used by research and development divisions, so they haven’t seen significant commercial adoption yet (and your friendly neighborhood authors have a few thoughts on how to fix that below).  

Impact

First, there will be supply constraints on commodity materials such as copper. Galvorn could help bridge the cap. It is a replacement material that could replace copper or significantly reduce the amount of copper needed. Second, Galvorn captures and sequesters carbon with a high degree of permanence. Today the manufacturing process uses methane and other natural gas, but once direct air capture technology improves Galvorn could be produced using carbon dioxide in the air. 

Challenges & Coral’s Proposed Solutions

Mining interests; There are a significant number of multi-billion dollar enterprises predicated on status quo staying…. status quo. We anticipate DexMat achieving commercial scale being met with pushback, contractual lockouts from certain verticals, and significant negative lobbying from existing producers of steel and copper. 

Coral’s thoughts; If you can’t beat ‘em, join them. We recommend that DexMat develop initial products and GTM motions specifically to target verticals and use-cases that are unappealing to major producers for reasons of poor unit economics, or a high degree of difficulty in recovery and recycling of the materials. For example, the past few years have seen wider adoption of copper-threaded fabric as the basis for hand warmers and heated coats (your authors are wrapping up another PNW winter and approve of this trend). Such products are expensive, very difficult to extract the copper for recycling purposes, and entirely suited for a Galvorn fabric licensed to major makers of work clothing (Levis and Carharrtt, hi). 

Another option; copper wire is heavily used in children’s toys, and any parent knows the continuous joy (or misery / madness) of changing out these products as they get broken, spilled on, or become boring. We see DexMat partnering with major toy manufacturers to provide modular circuit boards and wiring that can be swapped out at logistics factories for clean, straightforward recycling. And we are willing to bet that toy companies can charge a green premium for such products. 

By sweeping up low-volume, high margin consumer products as initial usecases and allowing industrial-scale metal producers to focus on their core competencies, we see Dexmat being a welcomed entrant into these markets. 

Clean, scalable electricity; A significant climate impact is being left on the table until direct air capture is available and turns captured CO2 into the primary Galvorn feedstock. 

Coral’s thoughts; Partner, partner, partner. While DexMat appears to be directly monetizing for the moment, it makes most sense as an ecosystem keystone, working to stand up manufacturing of Galvorn at DAC sites, and providing a modest revenue split to the DAC providers in exchange for low-cost CO2 and exclusive use of renewable energy. 

Mining; Legacy mining interests have a significant incentive to lock Galvorn in a box and toss the box off a cliff. Except…

Coral’s thoughts; As we’ve covered, there’s a lot of demand for copper in the world, and production is not keeping up with this demand. Ore quality in Chile has been steadily decreasing, and this trend will require mining companies to focus their attention on high volume, high margin SKUs. What does that look like?

Much of industrial copper production goes into buildings (as much as 400lbs per free-standing house, mostly in pipes and wiring), and the worldwide housing shortage isn’t slowing down in the foreseeable future. DexMat has wisely not offered products that would be seen as directly competitive with these applications. 

We suggest making this initial GTM explicit through lead and revenue sharing partnerships with legacy providers. DexMat gets to tackle the verticals and SKUs in which they play best, stays out of others, and each party recommends the other and co-sells deals wherever applicable.