Most Silicon Valley investors and entrepreneurs are more comfortable talking about software algorithms and chips than bricks and concrete. But some of them are trying to reinvent the building industry with green tech.
Calstar Products later this year plans to open a factory to manufacture a brick that uses fly ash--the residue from burning coal at power plants--as an ingredient while drastically reducing the amount of energy used in production.
The company is now in the process of raising $15 million in series C funding from venture-capital firms to help finance the operation, which will be in Wisconsin near a coal-fired power plant run by We Energies, according to Calstar Products CEO Michael Kane. It plans to officially launch the product at the GreenBuild conference in November.
Calstar Products is one of many green-tech start-ups designing different materials and processes to make builders greener. Along with energy storage and smart grid, it's a busy area of investment. Another company, Serious Materials, which makes a drywall that requires less energy to produce, said on Tuesday it raised an additional $60 million.
With Calstar's bricks, the company says it can reduce the "embedded energy" by 85 percent compared to existing brick-making techniques. Building materials are very energy-intensive: to make bricks, clay is melted at more than 2,000 degrees Fahrenheit for more than a day. Brick production creates 13 billion pounds of carbon dioxide per year and the cement industry is said to be the second largest emitter of pollutants after utilities.
Calstar's process replaces the clay and concrete used in bricks with fly ash so that 40 percent of the product is recycled material, Kane explained. It uses a small percentage of its own additive, which it can adjust for the different chemical properties of the coal that generated the fly ash. The process "captures" the fly ash within the brick so there's no leaching, Kane said.
The business plan is to sell the bricks, which are identical in look to traditional bricks, as replacements for buildings, pavers, and retaining walls at the same price as traditional bricks. Initially, it will be targeting architects and builders seeking out materials for green buildings.
In the U.S. Green Building Council's LEED rating, there aren't points for embedded energy, but Kane thinks that architects can get four points for using innovative and recycled building material.
Kane, who joined the company from the buildings material industry earlier this year to commercialize the product, said that incumbent companies would never have developed this sort of brick.
"Conventional companies can't get their heads around why they should do it. That's why we needed a technology disruptor from the outside the change the rules of the game," he said.
The company plans start manufacturing at full scale early next year and, to try to compete with those incumbents, Calstar Products is establishing a distribution channel in some Midwest states.
The venture may not deliver the giant-size returns that tech-oriented venture capitalists typically expect. But once the company starts selling products, its cash flow should be able to finance additional plants, Kane forecasts.
"When this company was started, it was a highly speculative concept. If it weren't for Silicon Valley, this concept probably wouldn't have happened," he said.