From Wasteland to Fund-Maker
This is the story of Kurion, a contrarian bet in the unlikely business of cleaning up nuclear waste for profit
By Josh Wolfe and Peter Hebert
The Wasteland. It’s where we went seven years ago in search of new ideas and opportunity. What we found was an unmet, inevitable need with no solution in sight.
Against the odds and with multiple trials along the way, including being first responders to Fukushima Daiichi, the largest nuclear disaster the world had seen in 25 years, we founded and built Kurion, a cutting-edge startup that uses advanced robotics and state-of-the-art engineering techniques to clean and contain nuclear waste. Today we celebrate with the entire Kurion team as we announce its successful acquisition by Veolia, a water, waste and energy company based in Paris, France, which carries a $13.7 billion market cap.
At Lux Capital we believe in the primacy of contrarians and outsiders. Throughout history we have seen that they are the source of all things new and original, and all things we will see and experience in the future. These rebels of science proactively pursue the most vexing problems of their time, and are inexorably drawn to solve them. At Lux our mission is to unearth, fund and support such inventors, scientists and entrepreneurs.
Occasionally, however, we find ourselves in their position.
We started from a first-principles discussion about the types of problems we wanted to address. The world was reeling from its massive consumption and limited supply of fossil fuel. From 2007 to mid-2008, crude oil shot up from $60 to $140. We knew the world’s population and economic growth would continue to demand even more energy over time. The questions on our minds: What sources of energy would people realistically use in the future, how could we contribute to more available, less expensive options, and where is there an opportunity to build a profitable business?
The industry raced to provide alternative fuels — chasing sunbeams and moonshine (solar and ethanol). We analyzed those approaches and found that while consumers might benefit from solar, the sector was already overcrowded. Biofuels looked to be a backward race toward an agrarian society and/or commoditization.
The energy industry was buzzing about a renaissance in nuclear. But it was fraught with problems. The business of uranium mining was filled with fraudsters. Building small modular reactors was too expensive and risky. How could we win if the industry grew, as well as if it shrank?
We tracked down and interviewed more than 300 experts in the industry. We poured through every research report and scoured every industry trade booth for intelligence. We discovered there were 440 nuclear reactors in the world, as well as another market few seemed to know about: American nuclear bomb-making operations. All these sites shared a common conundrum: What to do with all that waste? And what if there was another Chernobyl?
It turns out $1 of every $4 spent by the U.S. Department of Energy spent wasn’t on “green tech,” but nuclear waste cleanup — $6 billion a year. Such cleanups could take 50 years or more to complete. Yet very little new technology had been introduced to solve the problem.
So we decided to do it ourselves.
Like so many startups, talent was a real pain point. Wall Street lured many nuclear engineers with the promise of riches. We were relentless in our quest to get the very best and brightest in the industry. We were fortunate to attract a team that included CEO Bill Gallo, who brought in Jacques Besnainou, former President and CEO of AREVA Inc., the French nuclear giant; former White House official Jon Foster as CFO, Ralph DiSibio of URS and Washington Group; Mike Steuert, former CFO of Fluor; Aris Candris, former CEO of Westinghouse; John Raymont; Gaetan Bonhomme, an MIT hotshot PhD in materials science.
We started our mission by building and acquiring new tools. We developed world-class robotics that could be sent into sites that are too dangerous for people to enter. We discovered a new chemical process that would allow us to grab the most dangerous and radioactive isotopes and turn them into a stable substance. We also engineered complex machines that would permanently store the new solid waste. The process, called vitrification, produces a gem-like form of glass that looks like a cross between an emerald and a hunk of Kryptonite.
And then on March 11, 2011 at 2:46 pm, Japan’s largest earthquake on record — a magnitude-9.0 — struck 231 miles northeast of Tokyo, unleashing a tsunami. Nearly 16,000 people died. Thirty-foot waves lashed at the shore, severing roadways and washing away homes. The force of the waves wiped out the power and caused the cooling systems to fail at the Fukushima Daiichi nuclear power plant. It was a meltdown of epic proportion.
Kurion was one of a small handful of companies around the world with the expertise to contain the disaster. The team successfully designed, built and delivered a complete technology system to treat 68 millions of gallons of radioactive waste. The only way we could get the technology across the world fast enough was to load it in the middle of the night onto Russian military cargo planes.
The Kurion team stepped out of their bus in head-to-toe hazmat suits and gas masks. They passed overturned trucks, still smoldering, as they marched into bombed-out buildings. Other than the hissing of the reactors, it was silent — radiation had eviscerated all life nearby, including the birds. The environment was so radioactive the team could only stay for minutes at a time. Between shifts, they slept on floors in their suits.
By the time the job was complete, Kurion had removed nearly all the radioactive isotopes, including Cesium, from the disaster site.
After Kurion’s team and technology got Fukushima under control, we turned our attention back to the U.S. and Europe to target commercial and weapons waste. We hired quickly, built offices around the world and made a few acquisitions. The pace and scale of growth was astounding.
Several months ago Veolia reached out with interest to buy Kurion. They were looking for a complete solution for waste cleanup in nuclear as well as oil & gas and pharmaceuticals. Our team was attracted to Veolia’s global reach and resources to grow more quickly and positively impact more people around the world. For Lux’s part, we returned our fund — more than 40 times our total investment.
The future is a wild and unpredictable place. Some of the changes we encounter will be downright terrifying. But if we challenge ourselves to identify and tackle the biggest problems and opportunities before us, and if we seek out and partner with the bravest, most creative thinkers in the world, the future can also be filled with light.
If you are a scientist, inventor or entrepreneur with a contrarian idea that will lead the world into a brighter future, we hope you will reach out to us at Lux.