New Orleans battery startup Advano furloughs workers as it seeks last-minute funding | Business News

Advano, a promising New Orleans startup with a technology designed to make electric vehicle batteries more efficient, has furloughed 14 of its 18 employees and effectively ceased operations as executives seek last-minute investors to try and keep the company running.

Chris York, who has served as CEO of Advano since last year, said Thursday that the company is in talks with local investors to raise at least $8 million and give it a “10-month runway” to jumpstart manufacturing, hire personnel and attract other sources of funds.

If the money doesn’t come through, York said Advano’s board will consider options that include auctioning off the company or some of its assets. The startup’s five-member board is scheduled to meet late Thursday to discuss how to move forward.

“This would be a huge missed opportunity,” said York. “This technology is going to be the answer for improving lithium battery performance over the next 10 to 15 years. It’s frustrating not being able to get into the game because of financing.”

Aim to improve EV batteries

Co-founded in 2016 by New Orleans native Alexander Girau and Shiva Adireddy, Advano has spent nearly a decade developing a way to combine silicon with graphite to increase the range and charging speed of electric vehicle batteries. Girau was pursuing his doctorate in chemical engineering when he launched the venture; Adireddy was a Tulane University professor.

Advano, which has its office near the University of New Orleans and a pilot production plant in New Orleans East, raised $47 million to develop the idea and bring it to market. Former Apple executive Tony Fadell, known as the “father of the iPod” was an early investor along with Paypal co-founder Peter Thiel. Neither responded to a request for comment Thursday.

York said he helped raise $4.7 million for the company since his arrival. Among those who invested are Gulf South Angels, a nonprofit investment network based in New Orleans; and Boot64 Ventures, a for-profit fund that invests in Louisiana companies using matching dollars from a federal and state startup stimulus program.

The total investment haul is among the largest in recent years for a Louisiana startup. In January, Advano celebrated a ribbon cutting at the New Orleans Regional Business Park near NASA’s Michoud Assembly Facility. The plan was to produce up to 10 metric tons — about half a truckload — of material each year to provide samples to U.S. battery manufacturers, an industry boosted by billions from the Biden Administration through the Infrastructure Investment and Jobs Act.

But ultimately, according to York, the company has run out of operating capital before making enough silicon-graphite material at its plant to prove the product’s commercial viability.

Delays to pilot plant

York said delays in opening the plant prevented Advano from making and distributing enough samples. Without those, he hasn’t had success raising the capital that would be needed to construct a proposed 250,000-square-foot factory capable of producing 3,000 metric tons to 20,000 metric tons of material annually.

York estimated it will cost $25 million to activate the pilot plant, including hiring the necessary personnel, and another $125 million to build a full-scale production facility if the product is successful.

The larger plant could create between 200 and 300 jobs, he said.

For all the promise of Advano’s technology, it has faced off against better-financed competitors. More than a dozen companies are trying to develop and market silicon-graphite materials to sell to battery manufacturers. The list includes two well-funded West Coast ventures: Group14, based in Washington, has raised $683 million, while Sila Nanotechnologies out of California has nearly doubled that figure.

York said his competitors’ production process, which requires the use of volatile silane gas, results in a more expensive product than what Advano hopes to produce.

Porsche is an investor in Group14. Mercedes-Benz is backing Sila. Both companies already have customers.

Advano has 23 patents and six more pending. Plaques honoring some of them now line the walls of the nearly empty corridors at the company’s headquarters at The Beach, the technology park owned by the University of New Orleans Research & Technology Foundation.

York said it would be a shame to see those patents go to waste.

“I’m a golfer, and I’ve watched golf carts change from gasoline powered to lithium batteries,” he said. “Now you can charge your phone, run speakers and play 36 holes without running out of power. Engines have lots of moving parts and wearable parts; electric vehicles just run, and it’s the battery that enables it.”