Naples, Fla.-based rubber recycler Lehigh Technologies has finished a series E round of funding, squeezing out another $34.5 million and adding Index Ventures and Kleiner Perkins Caufield & Byers to its list of investors.
The company started producing rubber powder out of recycled tires a year ago. Lehigh's process involves freezing old tires with liquid nitrogen, then putting the frozen tires through a mill in high velocity, turning the rubber into a fine powder. That powder can be used in paints, shoes, plastics, carpets, and tires.
Through this process, Lehigh says it can make rubber powder for half the price of synthetic rubber.
"It's easily half or a third of the price of virgin synthetic rubber," said Neil Rimer, a partner at Index Ventures.
Right now, the company buys 6 million chopped up tires a year for 10 cents a pound, and its plant can turn that into 100 million pounds of powder per year. The new capital will be used to scale up production and add a second plant, a location for which hasn't been disclosed yet.
Recycling tires has some environmental and economic advantages over using synthetic rubber. Synthetic rubber is traditionally made out of oil, and that oil doesn't come cheaply at the moment. Yearly, more than 300 million tires are scrapped in the U.S. alone, according to KPCB. Those old tires are often buried in landfills, or burned. By using recycled rubber powder, which can be used to make up to 10 percent of a new tire, a gallon of oil can be saved for every tire produced, according to Rimer.
Recycled tires have been around for a while, but mainly in the form of re-threaded tires, where a fresh layer has been added on top of a used tire, according to Rimer. Using recycled rubber in the manufacturing of new tires expands that market.
Competitors in the field include Chambersburg, Pa.-based Edge Rubber, who use a wet-grind technology to make powder for industries like automotive, adhesive, and specialty chemicals. It also uses ambient grinding technology to produce fine Granulite rubber powder for the automotive industry, molded goods, and asphalt.
Rimer foresees large opportunities in the field. "We see this as a global business down the road," he said, eyeing Europe and Asia. "But we would ultimately need factories there too."