Sustainable aviation fuel (SAF) technology company Velocys announced today that it has raised $40 million in growth capital, shortly after de-listing from the London Stock Exchange’s AIM market and indicating a need to raise capital to continue operating.

The financing consortium included growth investors Carbon Direct Capital, Lightrock, GenZero and Kibo Investments.

Kevin Bone, Partner at Lightrock, said:

“We are delighted to be partnering with Velocys as it takes the next steps in its journey to becoming the leading provider of SAF solutions to the aviation industry. This critical objective requires long-term backing with the requisite experience of supporting industrial companies as they seek to realise their potential. I have no doubt that this consortium is best placed to do just that.”

Founded through University of Oxford technology spin-out company, Oxford Catalysts, UK-based Velocys enables customers to produce negative carbon intensity, drop-in fuels, functionally equivalent to current in-use fuels, from a variety of waste materials, such as municipal solid waste, woody biomass, and CO2 and green hydrogen, using its proprietary Fischer-Tropsch-based technology.

Sustainable aviation fuel is seen as one of the key tools to help decarbonize the aviation industry, which currently accounts for 2-3% of global greenhouse gas (GHG) emissions. The investment comes as demand for SAF is expected to rise dramatically over the next few years, as airlines turn to the technology as one of the key solutions to hit their climate goals, and as governments begin to mandate increased SAF use to achieve their own decarbonization ambitions. The EU, for example, recently announced the adoption of a law mandating minimum SAF usage, increasing to 70% of fuel blends by 2050, and the Inflation Reduction Act in the U.S. encourages the use of SAF via strong tax incentives.

May Liew, Investment Director at GenZero, said:

“Decarbonising the global aviation industry will require innovative solutions that can be adopted with ease and at scale. This is where Velocys’ pioneering Fischer-Tropsch reactor is relevant, with its modularity and efficiency to support the development of advanced biofuel applications. By leveraging technology to transform waste materials into sustainable aviation fuel, Velocys is well positioned to play a key role in scaling the use of low-carbon fuels to pave the way towards net-zero aviation.”

According to Velocys, the new capital will be used to accelerate the delivery of its technology for customers’ projects, as well as to help the company build its technology leadership, scale production, and enhance its team.

Velocys CEO Henrik Wareborn said:

“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.”