Modumetal has raised $33.5 million in financing to manufacture a metal that can last longer than steel and aluminum.
A Snohomish County warehouse, full of machines making metal sandwiches out of tiny, microscopic layers of material, is not the typical place you’d expect major oil companies to be investing millions of dollars.
But industry giants are throwing millions behind Seattle-based Modumetal, which is creating a new class of metal, and testing stronger, less corrosive nuts and bolts with oil customers.
The company has raised a financing round of about $33.5 million, according to an SEC filing. The round was led by Peter Thiel’s venture-capital firm Founders Fund, with participation from oil giants, including BP Ventures, Chevron Technology Ventures and ConocoPhillips.
Modumetal has deep connections to the oil and gas industry because of its core product — a process that creates a metal designed to be more corrosion-resistant, stronger and longer lasting than traditional metals, such as steel and aluminum.
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Modumetal nuts and bolts are priced similarly to those made of other metals, CEO Christina Lomasney said, but are made to last eight times as long.
“That means bridges that can last longer, cars that are lighter and engines that can run hotter,” she said.
Modumetal has the backing of Steve Singh, the co-founder of Bellevue business-software developer Concur; he also is on Modumetal’s board. That may be a far cry from Singh’s software roots, but he sees big potential in Modumetal’s products.
He pointed to safer oil drilling from less corrosion and lighter, stronger vehicles.
“The real attraction is if you can deliver technology that fundamentally changes the manufacturing process. … It helps not just Modumetal’s business, it helps more broadly across the global economy,” Singh said.
For the oil industry, Modumetal’s products means oil rigs that could withstand big challenges with corrosion, an issue that has cost companies globally $2.2 trillion, Lomasney said.
The company uses “nano-layering” to create metal products built from extremely thin layers of material. Lomasney compares it to making plywood; the resulting sheet of layered materials is stronger than the original wood.
“We’re able to take the same raw materials (used in traditional metals) and configure them in such a way that we get dramatically different performance,” Lomasney said. “When you reduce the scale of the layers down to a nanometer scale, the laws of physics change.”
For instance, the metal nanosandwich ends up with different characteristics when it reacts with heat and other elements.
The technology often results in a product that has much better properties than conventional metals, said Carolyn Seto, a director at industry analyst company IHS.
“If you have these nanolaminated materials that are less prone to corrosion, then potentially companies wouldn’t have to replace (equipment) as frequently,” she said.
A June filing with the Securities and Exchange Commission indicated Modumetal raised $26.6 million. Tuesday’s filing replaces the June filing.
Modumetal has raised three smaller seed rounds since 2009, according to Crunchbase and SEC filings.
The company plans to use the latest round to expand so it can produce parts faster and add space to make new products.
Its headquarters and research office are near Gas Works Park in Seattle, while its production facility is in Snohomish County. It has a field office in Houston where many of its customers, including Chevron, BP and ConocoPhillips, have operations.
Modumetal was founded in 2007 by Lomasney, a physicist who previously founded composites company Isotron, and John Whitaker, a chemical engineer.