August 16, 2005 4:00 AM PDT
A ski jacket material for frost and flames
The Northborough, Mass.-based company has found a way to mass produce aerogels, one of the most effective--but also finicky--insulating materials in the industrial world. Aerogels are essentially blankets of air. A 1/4-inch-thick blanket large enough to cover the world might consist of 5 percent fiber and 95 percent air.
Aspen Aerogels makes insulating materials designed to be not only lightweight but also capable of withstanding everything from extreme cold to heat up to 600 degrees Celsius.
Often produced in large sheets to the specifications of the client, these aerogel products are attracting customers from the oil industry, the military, the apparel industry, and other sectors.
The high air content means that aerogels are lighter than conventional alternatives. In a new generation of destroyers commissioned by the Navy, aerogel insulation will cut the weight of the ships by 200,000 pounds.
Just as important, air is one of Nature's great temperature regulators. Aerogels provide two to 10 times the thermal and acoustic insulation provided by existing foams or other competing materials. A blowtorch can be applied to one side of a sheet of the material and the other remains cool enough to touch.
"It can withstand temperatures ranging from cryogenic levels to 600 degrees Celsius. The technology and product is pretty well validated," Young said, describing the product as "light, fireproof, waterproof and thin."
Keeping oil hot
The beneficial combination has lead to a surge of business. Boeing has included Aspen's materials in its 787 planes to insulate turbines. Sikorsky and the Department of Defense have incorporated it into Apache helicopters to suppress infrared energy and foil the navigation systems of incoming heat-seeking missiles. The company also won five projects in the past year with oil companies to wrap the undersea pipes carrying hot oil from drilling sites on the sea bed to surface platforms.
"If the hydrocarbons get cold, flow will be impeded," Young said.
Revenue will likely climb from $6 million in 2004 to $20 million this year. In 2006, Aspen will open a new plant and begin to target customers in the construction and automotive industries, which could boost revenue to between $50 million and $60 million.
An IPO could come in the next two years, according to Lux Research, which tracks the nanotechnology industry. In May, Aspen landed $50 million in a series D round of venture funding.
"We're bullish on Aspen for a range of reasons," said Matthew Nordan, an analyst at Lux. "Unlike a lot of other nano companies, they've approached the market very intelligently by concentrating on high-volume applications."
The Jell-O model
Aerogels were actually invented in 1931 and the name is pretty descriptive. The material starts as a gel, but then the liquid is evaporated through a process called supercritical drying, leaving a web of capillaries and air pockets.
"It is very similar in its structure to kitchen Jell-O," said Young. "Imagine if you took Jell-O and put it through a process to drain out the water. All you would have left is a sugary protein."
For decades, however, most aerogels proved too brittle and delicate for widespread use. Back in 1993, NASA approached Aspen Systems, the parent company, to develop a flexible insulating material for a new generation of space suits. In particular, NASA wanted to give astronauts more flexibility in the shoulder and elbow region.
Aspen Systems came up with the idea of marrying its own formula for aerogels to a fibrous batting material. The company also fortunately employed a fairly unusual mix of scientists that made it possible to come up with a material with the required mix of properties.
"At the time, we were a pretty eclectic group. We had chemists, biologists, mechanical engineers," Young stated. Aspen Systems subsequently calved off the group in 2001.
Currently, the company has a factory capable of churning out 7 million to 8 million square feet of aerogel blankets a year, but it will open a second plant, next April, capable of putting out 45 million square feet a year, a key expansion considering that a large ship might consume 10 million square feet of the material.
Generally, an individual blanket of Aspen's material for industrial use measures 275 by 5 feet and costs between $2 to $18 per square foot, depending on the temperature range it is rated for and other properties required by the customers. Some blankets contain "exotic materials" while others are somewhat conventional, Young said. The material is marketed under two brands: Pyrogel and Spaceloft.
Threading the nanotech needle
While the technology is impressive, Nordan also gave Aspen high marks for dodging some of the mistakes committed by other nanotechnology companies. Nanotechnology--the art of making materials or objects out of designer molecules and components measuring less than 100 nanometers--started to go commercial in the last few years. Aspen's first products are replacements for basic fabrics and other materials.
Instead of making several different prototypes and targeting a wide variety of markets, Aspen has concentrated on a few markets and applications where performance, rather than cost, rules.
Other start-ups in the materials world often spread themselves too thin. Britain's Aleksey, for example, went from 109 prototypes to around 30 under a new CEO.
Aspen also hasn't engaged in joint ventures or licensing deals with large chemical companies, which can often end badly for the small company and lead to dangerous leaks of trade secrets or other intellectual property.
Instead, it has chosen to manufacture its products itself. Gore-Tex took this route, as are some fuel-cell membrane companies such as PolyFuel.
Although the potential for Aspen to succeed seems strong, danger signs lurk, said Nordan. One is rival Cabot Corp., which also makes aerogels. Young defected from Cabot and bad blood, for many reasons, exists between the two companies, Nordan noted.
"If (Aspen executives) pull off an IPO in '06 or '07," he said, "I'm sure the lawsuits will follow."