After more than a decade of testing and development, a Seattle startup is attracting the biggest names in the oil and gas industry with a unique metal that it says offers better performance at a cheaper price than conventional steel.
Modumetal just reeled in a $14 million investment round led by Vulcan Capital to scale up production of its nanolaminated alloys that are being used by companies such as Exxon-Mobil, Chevron, BP, ConocoPhillips, Noble Energy, and ADNOC.
Modumetal has developed a metal manufacturing process powered by electricity instead of the traditional heat-based source of energy in metals production. This allows the company to configure raw materials at scale in a layered manner, somewhat like metallic plywood, and achieve specific characteristics that strengthen the metal.
“We’re improving performance but also telling our customers that we can be the lowest cost option at the same time,” said Modumetal CEO and co-founder Christina Lomasney. “This is a game changer.”
The company’s first product is used on fasteners and connectors for high pressure systems that are a crucial component and typically expensive to replace. It is also developing an alloy that protects pumps and valves from adhesive wear and aggressive corrosion.
Lomasney, a University of Washington trained physicist who previously worked at Boeing, said improvements in construction capabilities can have a dramatic impact on the economy and society at large. It’s why we define transitions in civilization — stone age, bronze age, iron age, etc. — by materials of construction, she said.
“The ability to build things that have much higher performance, strength, and corrosion resistance means infrastructure that can be lighter weight and doesn’t degrade as quickly,” she said.
There are also economic forces playing to Modumetal’s advantage. Low oil prices and the ongoing trade war have caused oil and gas companies to look for ways to cut costs and improve the longevity of their manufacturing materials, Lomasney said.
It has taken Modumetal more than a decade to finally start selling its metal on a wide scale — a journey that included several setbacks — but Lomasney said that’s the nature of industrial markets. Oil and gas companies, for example, don’t often change their materials specifications. Lomasney likened it to the biotech industry, where companies must go through several clinical trials before getting approval.
“We’re really excited to be at that stage where we’ve demonstrated with our customers a significant return on investment,” the CEO said.
The fresh cash will be used to help increase production at the company’s 30,000 square-foot facility in Maltby, Wash. It also plans to license its manufacturing process with partners around the globe to meet demand from international customers.
“We are excited to partner with Modumetal to expand the manufacturing footprint for nanolaminated alloys globally in order to serve their major industrial customer base,” Stuart Nagae, general partner at Vulcan Capital, said in a statement. “Modumetal is focused on meeting the immediate demand for its products in the oil and gas industry and we also see compelling opportunities for the technology in other major sectors such as construction, infrastructure and transportation.”
Other investors in this round include ConocoPhillips and Docker CEO Steve Singh. Previous backers include Founders Fund; Second Avenue Partners; and Catamount Ventures.