Cary Street Partners raises $12 million for Richmond-based Recast Energy
‘Biomass Firm Gathers Steam with Capital Raise’
Source: Richmond BizSense
By: Michael Schwartz
An alternative energy startup that was spun off from another local startup recently closed on a big-money capital raise. Richmond-based Recast wants to put its freshly raised $12 million to work by building new biomass power plants.
“The money allows us to expand our portfolio with at least two to three more facilities that we could build and own and operate,” said Recast President Matthew Markee.
Adding a few more biomass facilities will give Recast the clout and collateral it needs to go after even bigger investor dollars and more expansion.
Recast Energy was founded in October and was born out of the various incarnations of a company formerly known as Intrinergy. Intrinergy eventually became Enviva, a fast growing recycled wood pellet company that until recently was headquartered in Shockoe Slip. Those moves left a nameless entity that specialized in producing steam and power for industrial clients. Enter Recast.
The company gathers byproducts such as wood chips, coffee bean shells and coconut husks – known as biomass – that are then used as a fuel to produce steam, and thereby energy. Recast owns two steam producing facilities, one in Mississippi and one in Kentucky. It also operates a facility in the Dominican Republic. The company has 50 employees, including seven in its headquarters on Stony Point Parkway.
Recast’s customers are typically large manufacturers such as factories producing chemicals, paper, food and drugs and that are still burning mostly fossil fuels. For example, the company serves a paper mill in Mississippi and chemical companies in Kentucky.
“Our primary targets are people that have around-the-clock energy needs,” Markee said. “The people that have the most need to evaluate the option today are the people who are burning coal or fuel oil that have a cost exposure and are facing increasing environmental pressures.”
The plants it would like to build cost between $15 million to $50 million, Markee said. The company will focus its expansion plans on North America, Central America and the Caribbean.
Recast hired Richmond-based Cary Street Partners to handle the equity raise. Tom Tullidge, a partner at Cary Street Partners who worked the deal along with Dylan Erdle, said the alternative energy sector has no problems attracting investors.
Recast was able to lure individual investors from across Virginia, Tullidge said, including some locals. “The company had solid support from this area,” Tullidge said.
Finding support for this sort of alternative energy wasn’t always easy, Markee said. When he and his fellow Intrinergy founders started out in 2004, there was a need for more of an education process when pitching to potential customers.
“We still don’t get nearly the attention of the wind and solar,” Markee said. “They tend to grab the headlines.”