Push for money: Washington startup up to $500M for sewage treatment plants, dairy waste
Wastewater treatment startup Sedron Technologies – the Washington company that once gave Bill Gates a glass of sewage-treated water – has announced it is being acquired by Ara Partners. A global equity firm is investing up to $500 million in Sedron to facilitate the deployment of its sewage and manure treatment technology, giving it control over the business.
“Ara’s investment is specifically designed to provide us with equity on our balance sheet to increase production at additional projects and plants across the country,” said Geoff Trukenbrod, Sedron’s interim CEO.
The startup is distributing utilities that efficiently and sustainably treat sewage biosolids and dairy waste. Sedron’s business model is to finance, design, build, own, operate and maintain sites, which cost about $100 million to $200 million to build.
The company generates revenue from municipalities and farms that use its services as well as from the sale of organic fertilizers and clean energy produced in the areas.
“Imagine you own a bakery, and you get paid for the flour, and you get paid for your cakes,” said Stanley Janicki, Sedron’s chief commercial officer. “It’s a fantastic business model, not that biosolids are cookies.”
Sedron was launched in 2014 as a spinoff from Janicki Industries, a long-time aerospace engineering and manufacturing company. Both are based in Sedro Woolley, a town north of Seattle in the large agricultural region of Western Washington.
In 2011, Janicki received a grant from what is now the Gates Foundation to develop a wastewater treatment program, which led to the launch of Sedron and a viral video showing Bill Gates drinking a glass of wastewater. The foundation supported the technology as a way to treat waste in developing countries where untreated sewage can spread bacteria.
The company is looking this month at a waste disposal facility that will serve several municipalities that are home to two million people in South Florida. Operation is expected to begin in 2028.
The Sedron system takes municipal biosolids – a residual product from a wastewater treatment plant – and dries the material in an energy-saving thermal dryer. Biosolids are 85% water, they are mostly evaporated and disposed of, and the remaining material is put into a biomass boiler to produce clean electricity. The energy produced helps run the dryer and the excess electricity is sold. Another benefit of the system is that the process destroys PFAS “permanent chemicals” that contaminate wastewater.
Second line of business to start handling manure from livestock – one of the biggest costs for a dairy farmer. Sedron takes waste, diverts water for use in irrigation, and produces two high-value natural fertilizers: a solid and a liquid nitrogen fertilizer. Fertilizer is sold nationwide for use on crops such as apples, berries and spinach.
Sedron’s treatment process is more affordable and replaces the use of landfills to store waste until it is applied to fields as a liquid. Lagoons produce planet-warming methane and pose environmental threats when they leak nutrients that can prevent algal blooms in nearby waterways or contaminate drinking water.
The company has deployed its composting technology to two dairy farms in Indiana, including a 20,000-cow dairy, and expects to begin operations at a Wisconsin farm this summer.
“We are focused on positioning Sedron as a leader in circular waste management – turning waste into a carbon negative asset faster, more cost effectively, and more energy efficient than any other solution available,” said Cory Steffek, partner at Ara Partners, in a statement.
Sedron previously raised about $100 million in corporate debt and equity and approximately $200 million in project financing, some of which was institutional. All shareholders have transferred their equity forward, Janicki said.
The 275-employee company has offices in Washington state and Chicago, as well as operations in Indiana, Wisconsin and Florida.
The startup is focused on delivering US facilities, aiming to launch at least two new sites each year for the next five years, and ramp up from there. Janicki said they would still like to work in developing countries to deal with that first use case.
Sedron’s leadership emphasized the importance of delivering a service that is compatible with investors and business partners, that does not require government support to be successful and benefit the world.
“As the world today is somewhat retreating from climate efforts,” Janicki said, “it’s exciting to be in a business poised to grow dramatically and solve environmental problems while creating valuable products.”
