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Clean jet fuel firm Velocys scores £31.7m from rescue consortium

Velocys Image credit: Velocys

Velocys, an Oxford-based energy-tech company developing sustainable aviation fuel (SAF), has secured a $40m (£31.7m) investment as part of a rescue deal that took the firm private.

Founded in 2004, Velocys aims to decarbonise the air travel industry, which is responsible for 800 megatonnes of carbon emissions annually.

The firm has received millions of pounds in government support via grant funding.

Velocys faced insolvency last year but reached an agreement in December to be acquired by a consortium of investors for £4.5m. The deal saw the company delist from London’s AIM market, where the company floated back in 2006.

The consortium has now injected additional funds into the company to accelerate the delivery of its technology to customer projects.

“The deal secures the future of Velocys, our pioneering technology and our industry-leading talent, allowing us to keep our foot on the accelerator as we continue to lead the way in innovative sustainable aviation fuel solutions as we enter an inflection point for our industry,” said Henrik Wareborn, Velocys CEO.

“For the past 20 years, Velocys has had a critical role in the development of reactors, technology and processes which enable the efficient production of lower carbon SAF, and we and our new partners are excited to see what the next twenty will bring.”

The consortium includes Carbon Direct Capital, Lightrock, GenZero and Kibo Investments.

“We believe drop-in fuels are the most promising, scalable solution to decarbonise aviation and to deliver climate impact the soonest,” said Josh Dienstag, chief investment officer of Carbon Direct Capital.

“Velocys is a scarce supplier with the technology readiness, production capacity, and leadership team to deliver for SAF project partners.”

Now backed by new funding, Velocys will scale its US-based reactor facility in Ohio. The company is also working on a project in partnership with British Airways in Lincolnshire to convert waste into fuels.