Harvest Power Strikes Deal with Waste Management to Turn Trash Into Fertilizer and Fuel

1/26/10Follow @wroush

Homes and businesses in North America generate about 55 million tons of organic waste every year, and that’s without even counting sewage. Roughly half of this solid waste comes from grass clippings and other biomass from the typical yard, and the other half is food scraps. Most of the yard waste gets recycled, but most of the leftover food doesn’t.

Harvest Power, a young Waltham, MA-based company with an office in Seattle and a processing center near Vancouver, BC, that generates high-quality compost and renewable fuels, wants to fix that. This week, it got a big boost from a major strategic partner, the Houston, TX-based waste hauling goliath Waste Management, Inc. (NYSE: WM).

Harvest announced yesterday that Waste Management has agreed to invest to help the company expand to more cities, starting with the East and West Coasts. But even more important, according to co-founder and CEO Paul Sellew, the giant partner will provide Harvest with raw material for its composting process and, in the near future, its biogas and syngas production systems.

“It’s all about feedstock,” says Sellew. “We need feedstock to manage, and WMI, being the largest waste management company in North America, has many millions of tons of material that we will have access to.”

Formed in 2008 by Sellew, a composting industry veteran, and former Bain Capital vice president Nathan Gilliland, Harvest Power is headquartered in Waltham and has collected more than $40 million in capital so far through a combination of equity offerings, debt, and grants. Its backers include Menlo Park, CA-based Kleiner Perkins Caufield & Byers—which incubated and provided seed funding for the company—as well as German venture firm Munich Venture Partners, and now Waste Management.

The $40 million total includes a $9.85 million equity round disclosed in a regulatory filing in December. The company isn’t saying exactly who participated in that round, or whether WMI’s investment was part of it. But it did say that as part of the agreement with WMI, Kleiner Perkins and Munich Venture Partners have increased their investments.

Harvest Power compost facility

Harvest isn’t an aggressive technology developer like most venture-backed cleantech firms, Sellew acknowledges. So far, the main technology it has pursued is large-scale composting, an age-old process in which bacteria act to break down huge, aerated piles of yard and food waste. The company’s sole existing facility, in the Richmond section of greater Vancouver, can handle 300,000 metric tons of waste each year, turning it into odor-free compost that can be sold as fertilizer to farmers, garden centers, landscapers, and municipal governments.

By the end of 2010, according to Sellew, the company intends to bring two more technologies online at the Richmond facility. The first is anaerobic digestion, in which waste material is loaded into closed chambers where microorganisms break it down into carbon dioxide and methane. This “biogas” can be burned to produce heat or electricity, or it can be processed and compressed into natural gas. The second is wood gasification, in which wood chips are fed into a high-temperature combustion chamber and broken down into carbon monoxide, hydrogen, and methane—a combination known as “syngas” that can also be burned to generate power. (Two Massachusetts startups that Xconomy has covered, Ze-gen and IST Energy, are among the other companies pursuing waste gasification as a power source.)

The new investment from Waste Management, Kleiner Perkins, and Munich will help the 50-employee company add staff, especially engineering talent, Sellew says. But there’s no new technology to invent here, he says—it’s all a matter of expanding processing capacity and adapting existing waste-handling technologies to the kinds of organic food waste that’s commonly generated in North America. “Composting and anaerobic digestion and gasification are all well-understood processes, so we don’t view that there’s any kind of substantive research and development risk,” Sellew says. “These technologies are ready to be rolled out.”

With Waste Management as a new partner, Harvest will be able to do that faster. It’s the second deal in less than a year Waste Management has made with a Boston-area cleantech firm: last June the company said it would become the exclusive distributor of solar-powered trash compacting receptacles built by Needham, MA-based Bigbelly Solar.

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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