In 2016, Liam Berryman was a Chemical Engineering student at UC Berkeley. His education and research at the school was helping him further his interests in materials and nanotech, but he wanted a better way to tackle some of the challenges he had learned academically. So later that year, he would drop out to start Nelumbo, a nanotech company focused on improving cooling systems to make them more advanced, efficient, and sustainable.
But he didn’t start alone. Instead, he recruited two PhD scientists to be his co-founders, one of whom he did research with while at Berkeley.
Fast forward to today, Nelumbo’s technology has the potential to save $11 billion in energy costs and has already helped its customers increase their energy efficiency by 30%, according to the company. And just recently, it announced its $14 million Series A funding alongside several notable commercial partnerships and 10-fold increase in revenue.
To learn more about Nelumbo’s growth story and the implications of the heating, ventilation, and air conditioning (HVAC) industry, particularly cooling, I sat down with Berryman.
During our conversation, we discussed three main ideas:
- How Berryman started with an idea and dropping out of UC Berkeley and turned that into a company worth millions.
- How the cooling industry’s lack of innovation has contributed to slowdowns in environmental progress.
- How greentech companies have adjusted to major challenges imposed by COVID-19—and what allows Nelumbo to weather the storm.
Our conversation has been edited for length and clarity.
EMILY DAO: Let’s go back to your college years. You started Nelumbo while attending UC Berkeley as a Chemical Engineering major. What inspired you to start Nelumbo?
LIAM BERRYMAN: I took a leave of absence from Berkeley in 2016 and Nelumbo was founded shortly afterward. I studied Chemical Engineering because I have always been fascinated by the process of creating the physical products we use every day – starting with basic building blocks (atoms) and manipulating them in many ways to get something as “simple” as paper or as “complex” as a car.
Why this interest in materials specifically?
Materials are at the root of every product and experience we have as we move through our lives, so what could be more compelling than providing better materials to the world? It is literally an opportunity to directly change what people can experience for the better.
So, you have two co-founders, and they’re both PhDs. As an undergraduate student, how did you convince them to start the company with you? Could you walk us through that founding process?
We all came to the table aligned on the impact we wanted to have in the world, and from there it was just a discussion of what vehicle we would use to do that. Lance and I had worked together in a lab at Berkeley and got involved in a start-up competition where we met Dave. We won that competition and during the process of preparing together realized that the three of us would be the perfect co-founding team. The rest is history!
How would you describe Nelumbo’s main customer demographic at the moment?
Tier 1 Suppliers and Brands of products such as Cooling systems. We also have a number of development partners for new products that operate in “stealth mode” today.
What about Nelumbo makes it stand out against the competition?
We have the first technology capable of applying controlled nano-structured materials at large scale, at low cost, and with an environmentally compatible process. This means we are the first to bring the benefits of nanostructure (such as extreme frost or ice resistance and corrosion resistance) to a number of new products for the first time.
It seems like there are lots of ways to address sustainability that sound less technologically complex. What made you interested in this market in the first place?
Three reasons. Cooling (air conditioning, refrigeration, heat pumps) is one of the largest contributors to the emissions problem, directly through refrigerant leakage and indirectly through energy usage.
Second, it’s a growing problem with the potential to be exponential. As the planet gets warmer, people and products need more cooling, which means more cooling devices and more emissions, which makes the planet warmer.
Also, cooling systems have seen relatively little innovation in the past several decades. Because of this, there are opportunities to significantly increase energy efficiency and reduce product failure (which causes refrigerant leakage) at relatively low cost with advanced materials.
What has been one of Nelumbo’s greatest challenges?
Materials technology has a challenged history from the last cleantech boom and has experienced significant under-investment ever since. As such, capital available in the materials space was quite limited when the company started. We had to overcome this challenge by forging a growth business model that was compelling to equity investors, our partners, and our customers.
How were you able to secure financing in this underserved space?
We did a lot of early experimentation to figure out how to magnify value created and delivered by pairing equity capital with strategic partnerships. We have made good progress in demonstrating that materials technology, with the proper business model, can be an excellent investment for equity and project participants. We hope this success leads to increased investments in materials companies and even serves as a template for others to grow their ventures.
I’m sure competing with big companies to win over top talent was also a pretty big struggle. How did you approach the recruiting process to gain a competitive edge against bigger brands?
Our approach has been to be clear about the level of ownership that each person has over their work – typically far beyond what they would get to experience at much larger companies – and involve every employee as an equity owner in the company, so they have huge personal upside as the company moves from success to success.
One universal challenge every company seems to be facing at the moment is COVID-19. How has this pandemic affected Nelumbo’s business so far? Are there any major adjustments you’re making at the moment or are planning to?
We have so far managed well through the COVID-19 outbreak, but there are ups and downs as I am sure everyone is experiencing. We have shut down our facility in Hayward, CA, which delays some experimental or production tasks, but we are still able to make meaningful progress while working from home. Our partners have adapted quickly and have a global presence, so critical manufacturing or testing can be shifted to alternate locations. Given our strong financial position, we will be investing through this crisis.
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