In late June, Rev1 Ventures came to me with an interesting investment opportunity and like Croft, a fast-moving deal. Rev1 is leading a $1.7 million seed round in RedNOx, a startup based on technology from Ohio State University that has developed highly sensitive sensors for NOx, N20 and CO2. RedNOx has raised and will close on half of that amount in early July. Thinking the deal is a good fit for VisionTech, Rev1 offered to syndicate the deal with us to help close the round. RedNOx Solomon Ssenyange is a PhD and a serial entrepreneur with one exit to his credit. His new venture has impressive traction, which is why I invited him to pitch Friday, July 12 at 12 noon. Here’s a quick preview.
BP: You are an academic by training, but also a serial entrepreneur. How did you pivot from research lab to boardroom?
SS: I earned a PhD in Analytical Chemistry from the University of Alberta in Canada, with emphasis on solid-state electrochemistry—the science behind advanced sensors. I also did a post-doc at Ohio State University in Analytical Chemistry. My real passion is business. In 2021, I licensed technology from Ohio State that became the foundation of Spirometrix. We commercialized an FDA-cleared, hand-held breath monitoring device for people with asthma. We exited the company in 2020. I’m now involved in other startups, including RedNOx.
BP: Tell me about RedNOx.
SS: RedNOx is a startup with an innovative sensor platform for greenhouse gases such as NOx, N2O, and CO2. It’s the same proven sensor technology behind Spirometrix, but we’re applying it to new industries. The main objective of our sensor platform is to detect the presence of greenhouse gases and reduce emissions for various industries as rapidly as possible.
Our initial focus is mobility and agriculture. In mobility, makers of gas and diesel engines used in light and heavy equipment, trucks, and cars have NOx emissions limits they are mandated to meet by 2027 in both the U.S. and E.U. Existing NOx sensor technologies do not meet ultra-low NOx measurement requirements except for RedNOx. Our sensors detect with incredible sensitivity (less than 1ppm), emissions levels to ensure manufacturers are compliant with future emission limits that will bring future internal combustion engine closer to near zero-emissions. RedNOx sensors are also being used to help farmers optimize fertilizer usage while minimizing greenhouse gas emissions.
BP: Why are your sensors so compelling to engine and automotive industries?
SS: The fines for noncompliance are staggering. Last December, Cummins paid $1.675 billion in fines for installing devices engines to allow them to emit excess pollution. Navistar was fined $52 million in another emissions case. Toyota had to halt shipments of 10 models over mishandling its engine tests. These manufacturers can’t afford to be noncompliant. Our ultra-low NOx Sensor is the answer in part because our sensors exceed the global regulatory range for NO and NO2 with no cross sensitivity to other emissions. Our sensors also perform in high-temperature, high stress environments.
BP: What kind of traction do you have?
SS: Cummins and Caterpillar recognize the potential of deploying our sensors in their engines and both have signed purchase orders with us.
BP: Impressive! What about the agriculture industry?
SS: Nitrogen is essential for crop growth; however, its production and use is linked to greenhouse gas emissions. The agriculture industry is under pressure to reduce the use of nitrogen to bring down emissions. We are developing the AgroNOx sensor specifically for the agriculture industry to accurately measure and monitor both NOx and N2O emissions. Our sensors are capable of measuring both with high accuracy and surpassing other sensors that measure only NOx.
The benefit to farmers is they can avoid over application of nitrogen, which can save 10-30% in costs. It also supports precision ag and sustainability goals.
BP: What kind of traction do you have in agriculture?
SS: We have good traction there, too, with two specialty fertilizer companies. The first is ICL Group of Tel Aviv in Israel, and PivotBio. They are using our technology to help determine the amount of greenhouse gases their fertilizers release when used by farmers. We are very early in agriculture, and it represents a maximum greenfield for us.
BP: You recently got some great news for this part of your business.
SS: Yes, we were just awarded a $650,000 SBIR Phase II Award from the USDA to accelerate development of our agriculture sensors. It’s great to have this non-dilutive funding to put into the company and our technology.
BP: Do you have any patent protection?
SS: Yes, we have a robust patent portfolio addressing our gas sensors and systems and methods. We also have two patents pending specific to agriculture applications. We conduct quarterly intellectual property reviews against competitors to protect our IP from competitors.
BP: Do you have any competitors?
SS: We have three competitors that we’re aware of, Nittera, NGK Insulator and Indrio Technologies. Indrio comes the closest in performance, but they product is priced significantly higher than RedNOx sensor. The other companies are low in price and performance.
BP: What investment round is this?
SS: This is our seed round, and our goal is to raise $1.7 million. We are halfway there with Rev1 Ventures leading the way. We hope to close the round by the end of September 2024.
BP: What is your planned use of funds?
SS: Two-fold. First, to fulfill the purchase orders for Cummins and Caterpillar. Second, to complete the development of our AGRI-NOX sensor so we can move forward quickly with current and future partnerships.
BP: Give me 3 reasons VisionTech investors should invest in REDNOX?
SS: Our sensor technology is truly innovative and our ability to detect the presence of specific emissions exceeds global standards. The market demand for emissions monitoring technology is growing as evidenced by the purchase orders we have from global companies very familiar in Indiana like Cummins and Caterpillar. Finally, we have validation of our technology and strong pipelines from both the mobility and agriculture sectors.
VisionTech’s Friday, July 12 Pitch Event will have one virtual session only at 12 noon ET.
Please plan to join me, Solomon and fellow VisionTech investors. Please register here.
