Synthica Energy Receives Large Equity Investment from Goldman Sachs

Building blocks with symbols/images related to sustainability and clean energy, being built towards a goal of a net-zero society block.

(Credit: Canva)

by | Aug 9, 2023

Building blocks with symbols/images related to sustainability and clean energy, being built towards a goal of a net-zero society block.

(Credit: Canva)

Energy transition platform Synthica Energy announced it closed on a large equity investment from the infrastructure business within Goldman Sachs Asset Management.

Synthica aims to produce renewable natural gas (RNG) from pre-consumer food and beverage waste and other organic manufacturing byproducts. RNG is increasingly of interest in the renewable energy space, though there is some recent focus on the potential emissions and water runoff from its production.

The amount of the investment and financial terms of the deal were not disclosed, but Synthica says it plans to use the funding to grow its infrastructure projects and accelerate the development of its facilities in key markets across the United States. This includes Ohio, Texas, Georgia, Kentucky, and Louisiana in the near term. Down the line, the company also intends to expand with clean energy facilities in Florida, Illinois, Missouri, New York, and Pennsylvania.

Synthica sets itself apart by targeting pre-consumer products, while many RNG developers focus on dairy products from farms or mixed solid waste from landfills. Pre-consumer products are typically defined as material or byproducts created after manufacturing but before the product reaches the consumer. This focus provides the company with a large and stable supply of input material from food, beverage, and industrial manufacturers.

The company plans to use anaerobic digestion to convert organic waste into RNG that can be used for fuel purposes in place of fossil fuels. The process creates recycling and landfill diversion and also offsets carbon emissions. The company’s business model involves contracts to accept consumer waste as feedstock. As pre-consumer waste, the materials aren’t subject to the variability and contamination levels of post-consumer waste, enabling greater efficiency and consistency in RNG production.

“Synthica’s mission is to provide a critical service for hard-to-process organic waste streams, divert these materials away from landfills and other non-sustainable disposal outlets, and ultimately reduce carbon and methane emissions,” Sam Schutte, CEO of Synthica, said in a statement. “We are excited about partnering with Goldman Sachs since it will enable us to accelerate our project development pipeline, enhance our circular solutions for our customers, and supply RNG to meet the growing market demand.”

With the investment, Synthica co-founders Sam Schutte and Grant Gibson will continue to lead the company. Mark Weidman, the former CEO of Wheelabrator Technologies, will serve as executive chairman.

The investment from such major finance players like Goldman Sachs underscores the potential for the company’s role in the energy industry. Demand for RNG and other renewable energy sources is expected to continue to rise in the United States, with manufacturers looking for ways to decarbonize and meet upcoming sustainability targets.

Synthica plans to sell its RNG production through offtake contracts with gas utilities, energy majors, and industrial purchasers.

“With this investment, we are aiming to take waste out of a one-way system and recycle it to generate renewable energy,” said Cedric Lucas, a managing director in the infrastructure business within Goldman Sachs Asset Management. “Similar to our Verdalia investment in Europe focused on biomethane, we believe this sustainable process can provide dual benefits, helping businesses and municipalities beneficially reuse their organic waste and supplying the country’s utilities with RNG, critical for reducing their carbon footprints. We are thrilled about the opportunity to partner with Sam and Grant and leverage the capabilities and relationships of our firm to bring sustainable infrastructure solutions to cities across the U.S.”

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