Khepra: Renewable fuels from waste

Khepra is building continuous flow reactors that deploy high-intensity ultrasound frequencies to take waste — everything from unrecyclable plastics to biomass to cardboard — and even mixed waste — and break the chemical bonds in the waste. The result is upcycled renewable chemicals and fuel components.

Today, I sat down with the founders to learn a bit more about the field and also about their personal motivations to run Khepra as they get ready for demo day. Below is a paraphrased and condensed version of a long discussion we had.

How did you guys get into this field?

Madeleine: Growing up in California, seeing solar panels all around, you start thinking solar panels are some be-all, end-all solution. Over time, I learned how without renewable energy storage the potential of solar cannot be realized. You know the infamous duck curve — the timing imbalance between peak demand and renewable energy production — leading to us literally throwing away solar energy. The sun shines the most when we don’t need it. I was working as a systems integration and testing engineer at Lockheed Martin, when Julie, who is my childhood friend, told me about this project, where she planned to put this excess solar energy to use, to breakdown waste into renewable fuels. I was in.

Julie: Yeah, I had been obsessed with renewable fuels for a long time. And obsessed with sustainability for even longer. My dad took me to see the movie, ‘Inconvenient truth’ when I was eight and that messed with my brain chemistry if I can put it that way. Sustainability was also a key theme for me throughout my education career. Reading a lot about space and going to school at the University of California San Diego, right in the neighborhood of pioneering companies such as Sapphire Energy, making algae-based biofuels by harnessing high energy, high pressure.

Fascinated by the idea I started reading a lot about these high-pressure, high-temperature methods in the field. I got very active in the cleantech community at UCSD when I got hooked to the concept of cavitation. There’s large amounts of energy stored in a cavitation bubble and a large amount is released when a bubble bursts. At its core, Khepra uses that energy to break long-chain organic polymers into shorter chain molecules, which are potentially higher value aromatic ingredients or precursors to fuels and/or fuel precursors. With the idea in mind, we started charting the concept more with waste as a feedstock.

Madeleine and I, staying true to our silicon valley origins, started tinkering in her garage. We played with cheap transducer units ordered from amazon and catalyst combinations, even accidentally burning stuff in Madeleine’s oven! The oven survived but we did have to brave some rank odours. Haha!

Sustainability has become a buzz-word, rightly so in my opinion, yet this is not the first time cleantech startups are taking a shot at the problems the earth faces. As you must have seen with so many San Diego cleantech startups, they are no longer operational, unfortunately. What’s new; how is this time different?

Julie: There is an abundance of waste. Both waste in the traditional sense of the word — the mountains of trash out there — and that of renewables as Madeleine mentioned. Using renewable energy transforms our unit economics. Acting as a pontoon against the waves of commodity prices. Cost parity against commodities aside, failing to achieve margins was a big factor leading to the sad demise of the first wave of cleantech. By co-locating with refineries with installed CAPEX, collecting tipping fees on waste, monetizing offsets from progressive corporations, and finally selling the valorized waste gives us multiple revenue sources; We’ve created a two-sided marketplace. Which is what is new and exciting here.

Madeleine: I’ll also add that from a tech perspective, our use of high intensity focussed ultrasound for waste pyrolysis (breakdown) is completely new. This technology has a high energy efficiency from electrical to acoustic energy. Because our method is powered by renewable electricity, it has a positive EROI (ratio of energy returned on energy invested).

Now you may think there are many moving parts here, which there are. But the good news is that many of these parts have been de-risked by earlier cleantech or the refining industry. We specialize in orchestrating all of it together. That’s also where a good portion of our IP lies.

That’s super exciting. I like how renewable energy-powered ultrasound is helping you connect the waste and commodity markets. Respectfully, I do have to ask, how do two undergrads catalyze change in such entrenched industries?

Julie: IndieBio opened doors to a lot of corporates, we have been made full use of the network and been actively reaching out to incumbents. To our surprise, we learned how corporates and oil and gas companies, juggernauts of emissions, understand the impact they have on the world, and they also understand the tipping points climate change will hit and how that will come back to hit their businesses. They are also incredibly practical and have already begun adapting their models. For example, for oil & gas, extraction drives a lot of the emissions. So many oil & gas companies are adapting by transferring a lot of their extraction budgets to venture capital arms. This has just started happening and shows you how they need something new, not just what they have, and had no incentive to change all these years. And these venture arms are very results-driven, you have to show them a product, not just projections. That’s been motivating us to prototype and scale rapidly. The impact multiplier with their distribution channels is manifold. With renewable chemicals and fuels that come out of our reactors, we see our company as a means of facilitating change for industries looking to add circularity in their processes.

Madeleine: In this process, a big learning has been to leverage the wealth of expertise out there. I am no longer afraid to reach out to and ask experts for help.

I learned how our process is so novel and exciting for many experts in the field, who know so much more than us and want to help because they love what they do, and now see a chance to make an impact.

Julie: That’s a very good point Madeleine makes. Valuing experience beyond just effort and skills. I don’t fall for the mythology of the genius visionary founder. Getting top talent and mentors excited and on-board early is important to us. Creating value and therefore disrupting trillion-dollar industries can only be done if we aggregate experience and bring on people who know more than us. Kieth is an excellent example of the role experience plays in accelerating impact. I am excited, as CEO, to make Khepra into a platform for talent, from many disciplines to create impact through renewable fuels and circular products.

Team-building as a means of disruption. I love it! Let’s talk about where you are now. Recently you revealed your prototype to the world during an interview with our MD, Po Bronson. Where do you fo from here?

Khepra founder interview with Po Bronson, Managing Director IndieBio and General Partner at SOSV

Julie: Khepra plans to scale up to a 500-liter reactor by the end of our Series Seed and add catalytic refinement capability to enable higher-value fuels. Looking very far out we want to get to 70 tons/day which is the waste output of a small city.

Madeleine: And scale is one dimension, as a pre-seed company we have had to tradeoff some complexity for budget and speed. We have been learning by breaking. With our Series Seed, we are also excited to optimize our process flow and demonstrate proof of concept of processing varying feedstocks. Going into demo day we are also looking forward to gathering insight around techno-economic analysis that shows the economic performance as a function of the inputs and economic value of our outputs. Really exciting times!

IndieBio’s Demo Day is October 27–28, with the New York batch on Tuesday the 27th at 10 am, and the San Francisco batch on October 28th at 10 am. Please follow this link to Eventbrite to RSVP. A single registration will grant you access to both days’ events.

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