A startup that's building a fuel system technology for diesel trucks that adds an ability to operate on cleaner fuel sources announced the close of a $17.8 million Series A funding round as it looks to double its workforce before year's end.
Tokyo, Japan-based Mitsui & Co. led the round for East End-based Optimus Technologies Inc., which also saw participation from Chevron Renewable Energy Group and Pittsburgh-based organizations like Idea Foundry Inc., Innovation Works Inc., the Richard King Mellon Foundation and the Urban Redevelopment Authority of Pittsburgh.
The round included converting prior debt-based investments into equity stakes and now represents the total amount raised by the startup since its founding in 2010 by CEO Colin Huwyler. It also comes amid a recent dry-up in funding for local tech firms, which has plummeted to decade lows over the past few months amid broader macroeconomic hardships.
Huwyler alluded to these hardships during a conversation about the startup's Series A close, which he said took about a year to obtain.
But he also said investment from corporate entities in Japan seems to be on the rise, an anecdote that also recently proved true for Lawrenceville-based Bloomfield Robotics, which raised $4.4 million in post-seed funding back in January that was led by Osaka, Japan-based agricultural machinery company Kubota Corp.
"It seems as though Japanese corporate investment dollars are growing," Huwyler said before noting the strategic benefit of the funding raise for energy focused-firms Mitsui & Co. and Chevron Renewable Energy Group, which will look to find ways to use or benefit from Optimus' innovative fuel system.
"[This investment partnership] is focused on really solving a major challenge globally that the world is wrestling with, which is how to decarbonize in a practical, short, realistic time frame," Huwyler said. "That's where our solution for customers really stands out."
Huwyler said Optimus' flagship product is a fuel system technology that upgrades existing diesel engines to operate on more sustainable fuels like biodiesel, which can be made from things like food waste or plants. The system can be installed on already-built trucks or during their original manufacturing, and the product does not inhibit the ability for these trucks to continue relying on diesel fuel should there be unavailability of cleaner alternatives when the time to refuel comes due.
Optimus is producing millions of dollars of annual revenue in the seven-figure range, Huwyler said, but he declined to disclose specific figures. He said the fuel systems have been installed on about 250 vehicles across the country, including on waste collection vehicles in Washington, D.C.
He envisions this funding will allow for the hiring of about 15-20 Pittsburgh-based employees before the end of the year, which could more than double the 15 employees who already work for the company in Pittsburgh.
"We are hiring, we are hiring, we are hiring," Huwyler said. "I can't get that across enough."
