Microalgae-derived performance materials
Dimmler and Scott Franklin, now Checkerspot's chief scientific officer, worked together at Solazyme before the company shifted its focus to making food products from microalgae.
The duo wanted to develop "performance materials that didn't exist" using similar microalgae-based methods, says Dimmler. "We definitely saw an opportunity and were excited and passionate about performance materials."
It follows that Checkerspot aims to upend the market for traditional petroleum-based materials with microalgae-derived alternatives. The production process is akin to fermentation with yeast, except using engineered microalgae to produce fatty acids as precursors for performance materials.
"It's the same principle as brewing beer, except we're using microalgae, not yeast, and we're feeding them microalgae sugar that the algae consumes and converts into oil, into triglycerides," says Dimmler.
Dimmler and Franklin saw a perfect target in the outdoor industry, due to a customer base that demands sustainability, responsibility, and transparency. The materials, however, haven't changed much in a generation. "You can't escape petroleum, you can't escape the burning of fossil fuels," says Dimmler. "At some point, you've got to make choices."
The strategy also dovetailed into the co-founders' hobbies. "Both Scott and I are big outdoor enthusiasts," says Dimmler, who participated in a ski-building workshop in Austria just before Checkerspot's launch.
After winning federal grants, Checkerspot established pilot-scale production at the Advanced Biofuels and Bioproducts Process Development Unit in Emeryville. "That was the kindling for us," says Dimmler.
The company then entered the Illumina Accelerator in Foster City, where Checkerspot resided for seven months until closing on a $5 million round of venture funding in spring 2018. "That allowed us to do a couple of things: to move to our new home and build out our own staff," says Dimmler. "We refer to it as a molecular foundry."
In two years, Checkerspot outgrew a shared space in Berkeley and is now bound for a 20,000-square-foot purpose-built facility in Alameda in Q1 2021 that will accommodate about 60 employees.
To showcase the company's capabilities, Checkerspot launched WNDR Alpine in Salt Lake City in 2018 to manufacture skis with microalgae-derived materials in lieu of polyurethanes, carbon composites, and other petroleum-based materials.
Dimmler says the end products are "playful" on the slopes, but also lightweight and durable. "We knew that a lot of those features came down to the materials."
WNDR has emerged as a calling card for new business for Checkerspot, he adds. "Being able to do that in a vertically integrated manner quickly and cost-effectively is a huge differentiator. The consequence of that, which we've experienced over the last year, is just enormous inbound demand from other brands and groups wanting to understand how we do what we do and looking to work with us."
"It's widely known that the single greatest challenge that the outdoor recreation industry is looking to solve is moving away from fluorinated chemistries for waterproof, breathable garments," says Dimmler. "Being able to access this broader palette of molecular building blocks gives us some pretty interesting white space to go and explore how to solve that problem."
"Outdoor recreation is front and center because WNDR Alpine is the extension of our laboratory. That gives us consumer engagement. That gives us direction," says Dimmler. "Most consumer brands don't have any materials capabilities. They're dependent upon what materials are coming down the value chain from the big chemical companies. It's not a secret there just hasn't been a lot of new things coming down that value chain, because all of the investment in R&D from chemical companies is being allocated to lowering their cost structure and improving supply chains."
Challenges: Since Checkerspot closed on a $36 million Series B financing round in August 2020, the big challenge has been managing growth. "How do we best manage the size and the scope of the demand against the speed of growth?" says Dimmler. "I think I speak for the whole team: We're super psyched to be able to manage this in a year when so many companies are contemplating furloughs and battening down the hatches."
There's also the staid market for petroleum-based materials that's difficult to crack: "Think about ExxonMobil and Chevron and BP and Shell and Dow and Dupont and BASF -- these are companies that have been around for decades, some more than 100 years. That's a long time to optimize your place in the market and to erect barriers to entry and to protect your market position. The concept of a startup being able to go from zero to full gas, that's fiction. It's not the same as information technology."
Opportunities: COVID-19 presented some challenges, but also catalyzed the company. "I think it actually helped sales because so many people are looking to get outside," says Dimmler. "We're in the midst of signing a really important joint development project with one of the leading consumer brands."
"Enormous multinationals are prioritizing sustainability," he adds. "One of the leading brands in leisure recreation is targeting a 70 percent reduction in carbon by 2030. That's huge. That's enormous. When you look at the supply chain, not a lot of folks have innovation and technology that's proven it works, that can scale, that has the white space we do. So, yeah, I'm really excited about what's coming once the world gets the pandemic under control and we start to see some gravitation back to what we used to know as being normal."
But there are plenty of other applications for high-performance materials. "For those other markets, let's leverage partnership. Let's enable others with our intellectual property," he adds.
There's a big one that's something of a holy grail: automotive. "Optimizing for strength to weight, damping properties, and a urethane-based compositor and a urethane cast, these are highly sought after physical properties in the automotive industry," says Dimmler. "The reason for that is because lightweighting and energy absorbing translates to fuel efficiency in cars."
He says the incoming Biden administration should also help the company, calling President Trump's policies "an enormous tailwind."
"Sustainability is key," says Dimmler. "Science matters."
Needs: Talent and market awareness and buy-in. "To be blunt, people giving a shit," says Dimmler. "Voting with their dollars."
"Anything along those lines helps society and helps the planet," he adds. "The need is people keying in and paying attention, and we're seeing that happening."