Another sustainable fuels maker is setting up shop in the Chicagoland area.
Aether Fuels, established in 2022 as a spinout of Xora Innovation, a Singapore-based early-stage deep-tech venture firm, announced a $34 million Series A financing raise this week.
With principal offices in Chicago and Singapore, Aether Fuels aims to help fuel the aviation and ocean shipping industries, both of which have pledged to get to net zero by 2050, but neither of which is suitable to go electric with batteries. The climate tech startup partnered with Illinois-based GTI Energy in February in a deal that will see the two work together to commercialize, scale and produce sustainable fuels from low-value waste streams.
The company's local research and development footprint began with a pilot facility at GTI's Des Plaines campus producing 1.5 gallons of sustainable aviation fuel per day, which will expand and move to 100 gallons per day. Aether Fuels also hopes to begin developing a pipeline of commercial-scale production facilities that include projects in the U.S. and Southeast Asia following the raise.
Aether CEO Conor Madigan told Chicago Inno that he's looking locally and all over the country for where to build the company's next facility.
While Aether's move to Chicago was predicated by GTI Energy's campus location, Madigan said that the area has all the right pieces to be a leader in SAF moving forward.
"United is based here. O'Hare is one of the major global hubs. Just a huge amount of jet fuel goes through this market. Illinois has also stepped up and established some of their own state-level staff incentives," he said.
Chicago-based climate-tech company LanzaTech Global Inc. and its spinout, LanzaJet, a local company that converts ethanol into SAF and renewable diesel, have likewise planted a flag in Chicagoland. The companies have established new partnerships and secured new funding over the past year from some of the big players in transportation and aviation including Southwest Airlines, British Airways and Technip Energies. LanzaJet and United Airlines were also named two of Time's 100 Most Influential Companies of 2024 for their work in fueling aviation change. And Microsoft also invested $50 million in the construction of LanzaJet's production plant in Georgia.
Aether's latest funding round was led by AP Ventures and included participation from Chevron Technology Ventures, JetBlue Ventures and TechEnergy Ventures, among others.
"In a tough fundraising environment, energy transition has been one of the few bright spots where investments have continued more broadly, and SAF in particular is among the segments that has definitely fared better," Madigan said. "I think it reflects that the policies that are out there are giving are clear signs to the investors that this is an area where they should invest."
The climate-tech startup also raised $8.5 million in pre-Series A financing via convertible notes in December.
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