Michael Buryk, Host of the Made in Ukraine Tech Startup Edition podcast recently sat down with Nick Oseyko, Founder and CEO of Carbominer to discuss the story of our startup and how we differ.
Take a listen via SoundCloud widget below and discover about our future goals and previous achievements since the beginning of the project in early 2019.
Interview with Nick Oseyko, CEO of Carbominer
Mike: Hello! This is Mike Buryk, your host and producer of Made in Ukraine Tech Startup Edition, a monthly podcast of Ukrainian tech and IT startups and their efforts to go global. Today is Friday, March 12th 2021. Our guest for this episode is Nick Oseyko who is the founder and CEO of a Ukrainian tech startup by the name of Carbominer. Welcome, Nick! How are you?
Nick: Hello, thank you for my chance to be here. I’m fine, let’s start! 🙂
Mike: Thank you for coming today, Nick. Appreciate that. To start off with, I think we should get some background on yourself, so can you tell a little bit about your educational background and then your professional background?
Nick: OK. I have graduated from Kyiv Polytechnic Institute in 1989, and my speciality was Information and Measurement Techniques. The formal name of how it is called in my diploma is Engineer Electrician. So, from the formal viewpoint, I have an engineering educational background.
In the early 90s, the situation in my country was quite chaotic, and it turned out that there were no jobs for young engineers. So I was forced to change my focus from technical and engineering stuff to finance. And for 10 years, I have been working as a finance director or CFO, as the position is called now, in various companies, both international and local ones.
Then in the year of 2004 I switched, and spent the next 15 years in the Human Resource Consulting as a leader of a local human resource consulting company called HR Center. We were mostly doing the services related to the surveying of the personnel of our clients for such metrics as personal engagement and e-NPS measurement, diagnostics of corporate culture, etc. In 2015, I decided to go to my roots back to engineering and spent several years working in heat management projects. And then the time for the Carbominer came in early 2019.
Mike: So Nick, how did you come up with the idea for Carbominer, and why did you decide to establish it?
Nick: Our project started in early 2019 when we came to the idea, and it was quite a funny story. It was a family conversation and our family doctor was present because our small daughter was sick. We had a discussion about the situation that the health level of each next generation is lower than the generations before. How it comes that our parents were healthier than we are and our grandparents were even healthier. And our family doctor told us that there is truly such a phenomenon. And when we asked about possible reasons, she said that nobody knows for sure, maybe this is ecology, maybe the rising levels of carbon dioxide in the air.
Being an engineer in my soul, I immediately responded, that there is no problem to fix the carbon dioxide issue. And why I was so sure about it? Because it is an old technical problem! For decades, humanity knows how to handle this issue in submarines to provide the crews with the fresh air, so they can capture carbon dioxide and circulate the air and in the space stations. Having this in mind I said to my wife and to our doctor, why don’t we put some small capturing machine in the corner of our bedroom and just circulate the air through it? My wife responded “So what? Shall we keep our kids indoors all the time?” That’s why we started to think about bigger scale and capturing carbon dioxide from the open air, outside the bedroom.
Mike: And when you started Carbominer, did you have your own funds or did you look for investors?
Nick: I started my projects, both heat management projects and Carbominer with my own internal funding. And we got some third party support only in early 2020, early last year in January. when we started our small R&D lab.
Mike: And can you tell us something about the Carbominer product and how it works?
Nick: Formally, our product, the thing we are going to sell is the carbon dioxide itself. We are going to capture CO2 from the open air and to give it to greenhouse operators as a cost-efficient and climate friendly alternative to the CO2 they buy now. Because, most of the modern greenhouses buy carbon dioxide and inject it into the indoor atmosphere to boost the speed of the plant growth. We plan to install our capture modules near the target greenhouses and simply send carbon dioxide from our capturing module to the greenhouse via flexible pipe.
Saying this I mean that we are going to cut a significant part of the total carbon dioxide cost chain. We do not need the CO2 storage at the production plant. We don’t need compression expenses, liquefaction expenses, transportation expenses and again storage expenses. This is the model.
Mike: And you actually have a piece of hardware right now that you’ve tested?
Nick: Yeah, we are building our first industrial scale model at the moment, using the last funding we got in October 2020. Most probably, this capturing module will be in the form factor of the shipping container, a standart 20 feet container.
Mike: And will your customers buy this module, or will they lease it or rent it?
Nick: Our model is that we retain the modules as ours, and we sell the gas itself. So, there is a metering device, which counts how much carbon dioxide was delivered to the greenhouse, and we bill our clients simply by that metering. Very similar to electricity.
Mike: Nick, is your company Kyiv-based and how many staff members do you have? And are there any other offices at this time?
Nick: We are in Kyiv, we have our R&D lab with small scale production facility here, in the western part of the city. And by now we have no offices in other places or in other countries. We have 10 team members on board at the moment, and we are also outsourcing the auxiliary functions as legal, accounting, the website development and so on.
Mike: Why do you think the Ukrainian VC firm SMRK became interested in your product and decided to fund it?
Nick: First of all, I think they are generally interested in the modern cleantech projects. And with us, the story is simple: we have raised a seed round from SMRK in October of last year of 2020, and we’ve been developing our capturing technology about seven months before that in our small R&D lab in Kyiv. And the partner, who helped us to establish this small research lab was exactly SMRK founder. So, it was like the first pre-seed funding in January, which helped us to extend our research and then, naturally, it went to the seed round in October.
Mike: And I understand that your product is in its early stage now. So when do you actually plan to bring it to the market? And will you sell it only in Ukraine or do you have plans to go beyond Ukraine?
Nick: Our plan is to put our first industrial scale capturing rack for internal tests in April. So in one month, with testing results positive, we are aiming to put the same module to a real field pilot testing near the client’s greenhouse. And if successful, we are going to raise our late seed round and to use that money to establish a production facility in Kiev or in Eastern Europe. So our plan is to have our first industrial modules out of our production facility, maybe late this year, 2021, or early next year.
Mike: Nick, who is your competition out there?
Nick: We are not alone in the DAC or direct air capture of carbon capturing. I want to name our three most famous main competitors as a company from the United States called the Global Thermostat and one company from Canada, a well known company called Carbon Engineering. And maybe the closest competitor, the Swiss company Climeworks, because this company is also going to sell some of the CO2 captured to greenhouse or at least such information is present on their website.
Mike: So why the focus on greenhouses as opposed to other aspects of the carbon capture market? How large is the greenhouse market in your estimation?
Nick: Greenhouse market is quite big worldwide. There are five hundred thousand hectares worldwide of green house area and two hundred thousand hectares from this are in the European Union. So coming back to the previous question, we are aiming to sell our technology to sell carbon dioxide capture not in Ukraine, but mostly in European countries. And we are targeting Spain at the moment as our first country.
Mike: And is there any thought to licencing the technology as opposed to developing the actual module itself and then managing the distribution of the CO2?
Nick: Oh, thank you, this is a good question. Formally, we are doing everything at the moment to develop the technology ourselves. But as we have our IP protected, we have a patent pending status, I think, that the licencing option should not be taken out from our view. We would consider it.
Mike: Nick, unfortunately, we’re just about out of time. But I did want to ask one last question. What do you think will be the greatest challenge in successfully launching Carbominer as a product?
Nick: From our experience with carbon capture, from what we already know, is that scaling the stage from the lab scale to industrial scale is a really challenging thing. For example, lab environment is one thing and open air conditions are completely different. We know that both ambient temperature and humidity level are important factors for carbon dioxide capture efficiency, you can imagine how difficult it could be to create a big capturing machine, able to work steadily in different weather conditions. I think, that the main challenge is to create a capture process, which would be able to work stably.
Mike: Nick, I want to thank you for coming on Made in Ukraine Tech Startup Edition today.
Nick: Mike, thank you for your invitation. It was my pleasure.
Mike: I have been speaking with Nick Oseyko, who is the founder and CEO of a Ukrainian carbon capture tech startup called Carbominer. And this is Mike Buryk, your host and producer of Made in Ukraine Tech Startup Edition, a monthly podcast series about Ukrainian tech and IT companies and their efforts to go global. Until next time, that’s all for now.