Why I invested in OROS Labs: the importance of innovation and energy efficiency in driving net zero

TL;DR

• OROS Labs is a game-changing company with a proprietary technology that has the potential to transform several industries, improve global energy efficiency and play an integral role in the race to net-zero.  

• Founded by Michael Markesbery and Rithvik Venna, the company is known for its Solarcore technology – an innovation that integrates NASA’s low density and high porosity aerogel to create lightweight, insulating material.  

• The SC_Foam that forms Solarcore is produced when aerogel technology is infused into various foam thicknesses to offer exceptional performance without the excessive loft that characterises standard foam insulations. 

• Ten times more thermal efficient than existing insulations, the material can save energy and reduce CO2 emissions without adding loft of bulk and can be used across aerospace, defence, pharmaceuticals, construction, and more. 

• By expanding into new industries, OROS Labs has unlocked a total addressable market of $459 billion.  

• The company is a great example of how taking an innovative approach to energy efficiency can have a considerable environmental impact. Offering a solution with a shorter lead time and lower upfront costs than installing new renewables infrastructure, companies like OROS Labs can immediately reduce energy consumption and carbon emissions. 

• The impact of energy efficiency shouldn’t be underestimated; the IEA found that ramping up annual energy efficiency progress from its current rate of 2.2% to over 4% annually by 2030 would deliver substantial reductions in greenhouse gas emissions, create jobs, enable increased energy access, cut energy bills, lower air pollution, and reduce countries’ dependence on fossil fuel imports. 

The detail

Innovation is when science and magic meet. No matter how methodical the approach taken by scientists and engineers, it’s often the elements that can’t be controlled that produce the most interesting – and impactful – results.  

There are countless instances of this happening throughout history. Take Cling Film, for example. You’d be forgiven for thinking that scientists were presented with the challenge of preserving food effectively and set out to find a solution, but its invention was actually a happy accident.  

In 1933, Dow chemical lab worker, Ralph Wiley, was cleaning his equipment as usual when he found that the film inside one vial wouldn’t come off. Further experimentation revealed that this substance – polyvinylidene chloride – was clingy, resisted chemicals, and was impervious to air and water. Cling Film was born – today, the UK now uses more than 1.2 billion metres of it each year. 

Why am I telling you about a 90-year-old discovery in 2024? It proves that researching one technology, or exploring a singular hypothesis, can lead to unexpected breakthroughs. Alternative applications can be uncovered, which could end up being more impactful than the original innovation.  

When I consider making an investment, I look for companies that are developing products and technology that may have myriad potential uses. In my opinion, companies who are open to the opportunities that arise during the development process will always be more successful than those with a restricted vision and a stubborn refusal to adapt and explore unplanned avenues. In the world of climate change, I strongly believe that it is the companies that have the foresight to experiment, innovate, and embrace the unexpected that will have the most meaningful impact.  

From outer space to outdoor apparel 

OROS Labs is one of those companies – and that’s just one of the many reasons why I chose to invest in this game-changing enterprise. With a proprietary technology that has use cases as varied as apparel and the Armed Forces, OROS has the potential to transform several industries, improving global energy efficiency, and playing an integral role in the race to net-zero.  

Founded by Michael Markesbery and Rithvik Venna, OROS Labs is focused on creating the “most scientifically advanced thermal solutions on the planet.” Its founders’ core belief is that thermal technology can empower humanity to fulfil our potential, but insulation must evolve across all industries in order to meet the needs of the next generation. 

The company started out as a direct-to-consumer outerwear apparel company. While studying his undergraduate degree at Miami University, Markesbery received a grant from the Astronaut Scholarship Foundation. This proved to be the catalyst for OROS Labs as it led him to learn about aerogel, a substance with low density and high porosity, that NASA uses to insulate its astronauts and equipment in space. Joining forces with fellow Miami alumnus Venna, the duo set about adapting aerogel for use in apparel and launched their first product – an incredibly warm and thin jacket - under the sub-brand Solarcore in 2015. 

This unique technology soon earned a patent, leading to OROS’ co-founders being named on the Forbes 30 under 30 list in 2018 and Solarcore being licensed to footwear brands including LL Bean, Merrell, and Oboz Footwear. Today, the OROS leadership team includes members who have worked with some of the world’s most recognisable apparel brands such as The North Face, adidas, and Columbia Sportswear. 

Expanding into new industries  

Speaking personally, what made OROS Labs such an intriguing investment opportunity is that its Solarcore technology has several potential uses beyond apparel. Ten times more thermal efficient than existing insulations, the material stands out thanks to its ability to save energy and reduce CO2 emissions without adding loft of bulk. 

And that’s not all; Solarcore’s proprietary SC_Foam is safe, easy-to-use, and can be cut, sewn, glued, and compressed without having any impact on its conducive thermal properties. These qualities mean it can provide an innovative solution to problems impacting several industries including aerospace, defence, pharmaceuticals, construction, and more.  

Expanding into these new industries opens up a total addressable market of $459 billion. These opportunities range from helping the pharmaceutical industry keep medicines temperature controlled throughout the supply chain (potentially saving $35 million annually) to providing pipe insulation for the US Navy and lightweight, heat-efficient cold weather tactical shelters for the US Army. 

The science behind Solarcore 

Diving deeper into the technology, it’s important to first understand the benefits of aerogel. Also known as “frozen smoke” or “blue smoke”, this insulating substance was developed by American chemist Samuel Kistler in the early 1930s. During his research at the College of the Pacific in California, he created a gel made from silica. He then subjected that gel to supercritical drying to produce a material with air pockets that allow for 90 – 99.8% porosity.  

Solarcore’s SC_Foam takes this to the next level, resulting in a thin, low density, soft, and flexible insulating material. The manufacturing infuses aerogel technology into various foam thicknesses to offer exceptional performance without the excessive loft that characterises standard foam insulations. It has a base made from Closed Cell Nitrile Rubber (NBR) Foam, with silica aerogel particles embedded within the foam matrix for optimum thermal performance.  

Available in thicknesses that range from 2mm to 10mm, SC_Foam has a thermal connectivity of 32.6 mW/m K. With its 2mm variant, it leads competitor apparel insulations by an average of 65.5% CLO and outperforms leading foam companies by an average of 26.5% in terms of its thermal conductivity. 

By expanding into new sectors including energy storage, aerospace, construction, cold chain packaging, and defence, OROS Labs is also furthering its sustainability goals and overall mission. Heat provision currently accounts for half of all energy consumption and contributes 40% of global CO2 emissions, but improvements in insulation can reduce heating requirement by a factor of two to four.  

As more industries find uses for Solarcore, OROS can make more progress towards curbing energy consumption, reducing emissions, minimising material usage, and mitigating waste in the supply chain. 

Efficiency is essential  

It’s vital that we don’t underestimate the value of energy efficiency in the fight against climate change. Put simply, energy efficiency allows us to deliver more with less.  

Innovators in this space also tend to offer solutions that have a shorter lead time and lower upfront costs than installing new renewable energy infrastructure and so can immediately reduce energy consumption and carbon emissions. 

At first glance, investing in this sector might not seem as worthwhile as supporting companies focus on renewables. While I think renewables should always make up a substantial portion of your climate-focused investment portfolio, improving energy efficiency can be similarly impactful. In fact, the International Energy Agency (IEA) found that ramping up progress in annual energy efficiency from its current rate of 2.2% to over 4% annually by 2030 would deliver substantial reductions in greenhouse gas emissions. Simultaneously, it would also create jobs, enable increased energy access, cut energy bills, lower air pollution, and reduce countries’ dependence on fossil fuel imports.  

The expert consensus is that tackling the rate of energy consumption could significantly slow – and even reverse – the current global warming trajectory. By investing in innovations that improve performance and reduce the cost of technologies that are already delivering reductions in emissions, we can rapidly improve the status quo. It’s estimated that energy efficiency can deliver more than 40% of the emissions abatement needed by 2040; current technologies could double global energy efficiency by this date while next generation innovations could produce even more impressive results.  

It's not a question of either/or, but pursuing a multi-pronged approach that sees renewable energy and innovations in energy efficiency as solutions that can work in tandem to fight climate change on multiple fronts . Achieving net-zero by 2050 will require an economic transformation supported by policy change, public spending, and private investment and I hope that my investment in OROS Labs will inspire others to consider adding energy efficiency innovators to their own portfolio. 

Note: I invested in OROS Labs through sequel - a community of the world's best athletes investing in the world's best startups, making a positive impact. For those of you who know me, I am not an athlete. I am one of the early backers in sequel hence why I (kindly) get access to their deal flow.

— Lew 👋

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The Transition’s work is provided for informational purposes only and should not be construed as advice in any capacity. Always do your own research.