For Tony Atti, it’s been a “heck of an 18 to 24 months,” and it’s not letting up any time soon – particularly on the news of a major growth investment by Goldman Sachs, one Atti said could take Durham-based Phononic straight to an initial public offering.
His solid-state cooling and heating technology firm has secured a $50 million infusion from Goldman Sachs Asset Management’s new Environmental, Social and Governance (ESG)-focused fund. Atti said the investment, which will help scale its technology, would take the company to profitability.
“The idea is to prepare ourselves for what’s always been the ultimate aspirational goal, a global publicly-traded entity,” Atti told TBJ. “This capital continues to drive that ambition.”
He calls the idea of going public a “growth event,” and not an exit.
“You don’t make the decision to be a publicly-traded company just because it’s a hot market,” he said. “You make the decision to … because the public markets are a source of growth capital that betters your company. Goldman’s capital gives us the flexibility to do it on the right terms, not just the convenient terms.”
And it’s just the latest fundraising success for the firm, which has raised about $230 million altogether, including from foreign investors.
In the case of Goldman Sachs (NYSE: GS), it’s bringing more than dollars. It’s also bringing an “unprecedented rolodex,” Atti said.
The investment giant has the know-how to connect Phononic to opportunities driven by corporate mandates around sustainability. According to Phononic, global warming has been “exacerbated by a voracious appetite for cooling, refrigeration and air conditioning.”
If left unchecked, estimates show that by 2045 leaked refrigerants alone will contribute as much Co2 emissions as automobiles, according to the company. Phononic’s refrigerant-free solutions are one sustainable innovation that could help companies lessen their carbon footprints, Atti said. And Goldman can make the connections to the companies working to do just that, he said.
Atti said the pandemic has already been a growth driver for the firm, further positioning it for this kind of attention.
“We’ve more than doubled the size of the company,” he said.
While Atti declined to release revenue specifics, the company, founded in 2008, is going on its third straight year of doubling its revenue, he said. It’s grown to 250 employees, 240 in the Triangle. The growth is happening across all three of its lines of business – conventional refrigeration, chip solutions for micro-cooling and refrigerated tote solutions for food logistics.
“In 2020 all three segments were really electrified,” Atti said.
The Goldman Sachs investment will go toward accelerating the growth of those business lines.
According to Phononic, the firm has shipped 7 million thermoelectric devices and, just this year, has plans to ship 9 million, with more than 15,000 refrigerator and freezer products on backorder.
