Phononic Raises a Cool $44.5M for Refrigerator Technology
Phononic, a startup that’s trying to shake up the refrigerator industry with a semiconductor cooling technology, has raised $44.5 million to help the company expand into more cooling applications. Eastwood Capital Corp. and the Wellcome Trust led the Series D round for the Durham, NC-based company.
Phononic’s technology replaces refrigerator compressors, the pumps that move refrigerant throughout a cooling system. With no moving parts, Phononic says its solid-state heat pumps don’t use toxic refrigerants or make noise the way traditional refrigerators do. But the biggest selling point the company makes is the energy-saving capability of the technology compared with traditional refrigeration.
The Series D funding commitment comes a year after Phononic’s $21 million Series C round, which financed the company’s entry into the refrigeration market. That round was led by Beijing-based Tsing Capital and Phononic said the funding would help the company reach Asian consumers.
Phononic CEO Tony Atti said at the time that the company would not make refrigerators, but instead would partner with an undisclosed Asian refrigerator manufacturer. Atti said Phononic’s market research found that the earliest demand for the technology was for home refrigeration, though he did acknowledge at the time the potential for cooling data centers, among other applications.
Phononic is now making inroads into those additional cooling applications. In a statement Wednesday, Atti says the technology is finding uses in fiber optics, telecommunications, and data server infrastructure cooling. Those applications follow the company’s pursuit of laboratory refrigeration. In September, Phononic revealed a line of new refrigerators for laboratories, research centers, and medical facilities.
The company also announced that Rex Healthcare, a Raleigh, NC-based hospital that is part of the UNC Health Care system, would be a test site for Phononic’s new line of refrigerators. The hospital will test Phononic refrigerators in its laboratory and blood service units. When the partnership was announced, hospital officials said that the technology can cool lab samples uniformly while also reducing some of the failure risks presented by conventional refrigeration.
Rex Healthcare’s venture arm, Rex Health Ventures, is among the participants in the latest round of funding, which was joined by existing investors WLR China Energy Infrastructure Fund, Tsing Capital, Venrock, and Oak Investment Partners.
“The last year has seen tremendous and exciting growth for Phononic,” Atti said in the statement. “This latest round of financing will enable us to deliver and expand comprehensive product solutions to our customers and partners.”
Atti launched Phononic in 2009, backed by $2 million in investment from Venrock and Oak Investment Partners. That year, Phononic also received a $3 million grant from the U.S. Department of Energy Advanced Research Projects, which finances disruptive energy technologies. Venrock and Oak joined in a $10 million Series B round in 2011.
Phononic’s technology is based on thermoelectric generators, devices that convert heat into electricity. That process can be reversed, resulting in thermoelectric cooling. It has origins in semiconductor and thermoelectric research from the University of Oklahoma; the University of California, Santa Cruz; and the California Institute of Technology.
As Phononic looks to expand its technology to new electronics applications, potential thermoelectrics competitors include GMZ Energy, a Waltham, MA, company that has a product that produces electricity from heat, and Alphabet Energy, a Hayward, CA, company that is developing a way to convert heat from industrial activities into power.
Atti has said that he based the company in North Carolina’s Research Triangle because of the materials science expertise in the region. Phononic was based on North Carolina State University’s Centennial Campus, home to numerous technology companies, before relocating in 2011 to larger space just outside of Research Triangle Park that includes the capacity to manufacture Phononic’s heat pumps.