The following interview is a conversation we had with Steff Gerhart, Co-Founder & Co-CEO of ecoLocked, on our podcast Category Visionaries. You can view the full episode here: $6 Million Raised to Transform Buildings into Carbon Sinks
Brett
Hi everyone. Welcome back to Category Visionaries. Today we’re speaking with Steff Gerhart, Co-Founder and Co-CEO of EcoLocked, the climate tech startup that’s raised over 6 million in funding. Steff, how are you?
Steff Gerhart
I’m fine. Thanks so much for the invite.
Brett
No problem. Super excited. Let’s go and jump right in. Talk to us about what you’re building there at EcoLocked.
Steff Gerhart
Yes. So we are developing CO2 negative concrete admixes to turn buildings into carbon sinks.
Brett
And take us back to the founding of the company. How did you get into this world? It seems like a very niche business.
Steff Gerhart
It is niche for sure, but it’s actually building on a much larger problem. So, as you probably have discussed in previous podcasts, we really need to scale up carbon removal. So for a long time the focus was on emission reductions and at some point the IPCC said, well, emission reduction, we need to do all we can, but even in best case scenarios, we will not get close to our climate goals. We additionally need to suck CO2 out of the atmosphere. So carbon removal. And if we look at technologies there, most of them are really early stage, not ready to scale and highly energy intense and super expensive. And then there’s this one technology which is biochar carbon removal. And biochar carbon removal already accounted in 2023 for over 90% of all the CDR credits that were sold in the market.
Steff Gerhart
But still, it’s really small. So even though it’s the largest and most dominant technology, it is small and we really need to scale it up. And the challenge that this industry has, despite all of the advantages, is it lacks scalable end application for the product that it’s producing, which is a kind of a material called biochar. And my Co-Founder, Michael, he’s cto, so engineer, environmental scientist, he came across biochar and he was like, oh, that’s such a cool technology, why isn’t it applied Further, he looked into different markets where there could be end applications and came across the construction industry. And I mean, maybe just to give you some numbers there, just the building materials make 15% of the overall global emissions every year and cement alone is 8%. So just to put it in relation, the aviation sector is 2 to 3%.
Steff Gerhart
So this is huge and it’s really hard to abate and being able to find a solution for this market to compensate the emission and inset the emissions and this is really powerful solution. And at the same time we help then scale up a very powerful CDR technology that we need. So this is how we came about. Yeah, doing what we are doing.
Brett
So you have this idea like where do you even begin with something like this? You know, what does step one, two and three look like?
Steff Gerhart
Yeah. So Michael looked into the technology. He basically looked at, you know, is it scalable, is it promising? You know what it says it does, is the technology sound? And then he looked at end markets. What are problems there? Is it economically feasible? Are we actually solving a customer pain point? Right. Or are we just hoping to do something important but no one really cares about it? And then he worked with my second Co-Founder, Mario, on developing a business case, making sure there is, you know, enough feedstock, all of that. And then I came in and started really like talking to stakeholders in the industry so across the construction value chain to add more detail. And then I mean, obviously as you know, direction is changing.
Steff Gerhart
So what we planned in the very beginning has evolved quite a bit to what we are doing now. And this is like to a large part obviously driven by customer feedback.
Brett
Amazing. How did you get that first customer? Take us behind the scenes on that first paying customer. How did you pull that off?
Steff Gerhart
We talk truly to a large number and our direct customers are concrete producers. And obviously they are not known to be super innovative or always looking for new materials. It’s an industry where you really need to have materials that are well known, that are proven, that are completely de risk. So we right away focus basically on subsections of that market. We look for customers who are already marketing their material as environmentally, you know, less harmful, sustainable. So we knew they would put an emphasis on the sustainability aspect. And we checked that they had either partnered with startups before or they have done some innovative approach within their own operations. And these were the people we then reached out to more really went into conversations with.
Steff Gerhart
And yeah, the first customer was coming from very close to where we operate, which was helpful because FaceTime in this industry is very important to build up trust, you know, that we are not just some crazy startup doing something weird. We really needed to be there and to convince them that this is something solid. And went into their lab, we tested with their material and with their own head of laboratory also. Making sure they can build up that trust, they can get the security that there’s something legit was really important. And all of that sprinkled with some excitement and enthusiasm to support a young startup and led to our first customer.
Brett
What about the marketing strategy? How did the marketing strategy begin and then how have you seen it evolve into what it became today?
Steff Gerhart
So I would say we didn’t do much of marketing, to be honest, because it took us a while to have a functioning product. Right. So it was always a big question for us, when should we really go out and become very vocal about what we are doing? Because we knew it would take some time and there’s the risk then that you go out. Everyone is like interesting and looking and wanting to talk, but you’re not ready. And until you get ready, you are kind of yesterday’s news. So we actually really tried to work just with a handful of customers to make sure we are market ready and we are ramping up our marketing efforts, really just I would say in the last few months. So this is kind of two years from founding.
Steff Gerhart
Before that, it was really a one one approach with selected customers that we had proactively reached out to.
Brett
What markets are you serving today? Is this, you know, just in Germany? Is it all over Europe? What does that look like?
Steff Gerhart
So we are mostly in Germany, but we have customers in the Netherlands and we are talking to a bunch of custom prospects across Europe. So Italy, uk, France, Denmark, Spain. So it’s like we do get requests also from the us, from Canada, from South America, and then also a lot from Asia. But since we rely on a supply chain that right now we are focusing here on the kind of European part, that would be quite some effort to build up a new supply chain in that other market. So this is why we are really concentrating our efforts regionally. And if we decide to go into the new region, then you know, we would do preparation and with full force.
Brett
What are you doing to, you know, get out into the market and build trust? Is there anything specific that you’ve done that you’ve really seen work? I know startups always struggle with that and given your market, I have to imagine that trust is very important. How do you go about building trust?
Steff Gerhart
Yeah, no, it is. And the market actually is. I mean, yes, it’s big, but everyone talks of the concrete mafia and the cement mafia is maybe a little bit mean, but it’s also a very descriptive in everyone knows everyone and people talk a lot amongst each other. So really like the reputation that you have is important and you don’t want to like screw it up. So for us we really always try to find a good balance in transparency since we are working with a very risk averse market and typically we are then like we talk to someone in the leadership. The CEO, he or she is very excited about sustainability, leads us to the head of laboratory. And those guys are obviously technically extremely skilled, extremely experienced and very much focused on all the risks and what can go wrong.
Steff Gerhart
So we kind of need to balance these conversations by obviously being open in what our product can and cannot do. Any risks or any unknowns because of course there are unknowns with such a new product without like scaring them away or being like not getting them excited. And I think this finding this balance is really hard and we surely did not always quite hit it. But obviously you develop experience and this was always important to us to really hit that and also internally train ourselves into getting better. There then also a big part is we need to educate everyone because a lot of people are not very knowledgeable about sustainability, about carbon removal. So this part in what exactly does our product do? How do we compensate the emission? What does that mean?
Steff Gerhart
This is a whole new topic that they have never been in touch with before. So what we did there is we really spent time and also money in creating good infographics, for example, or you know, the short videos that explain stuff. Very simple is what we want to do next. We invest a lot in thought leadership in terms of, you know, communication on LinkedIn, writing blog posts that really go into the depth of certain matters. And we are out a lot in the industry on conferences and panels and, you know, these types of things to really raise a lot of awareness and demonstrate that thought leadership.
Brett
As I mentioned there in the intro, 6 million or over 6 million raised to date across venture funding and grants. What have you learned about fundraising throughout this journey?
Steff Gerhart
Fundraising obviously is super important once you decide to go the VC route, right? Maybe there something I would encourage everyone to do is to think about if you want to go the VC route, because I’m meeting more and more founders who actually decide to bootstrap for a while. And so for us this never was really an option. But if you can do that, I think this is worthwhile, at least exploring that option because obviously with having investors and shareholders, there comes a bunch of work that is just on top. Like if you compare a startup that is bootstrap versus one that is doing the exact same thing but has investors, you have like at least two, three employees just managing the investors. And that sounds a lot, but it’s like really the case.
Steff Gerhart
Like you have like investor relations, they have questions, you need to manage them, you need to prepare reporting, you need to do just a lot of admin stuff to kind of manage that relationship, keep track, do the KPIs. Overall, I think this is something the other startup should do as well, that is bootstrapping a lot of that, like, you know, just sound business operations and KPIs and so on. But it’s easy to kind of ramp it down, right, and really focus on the activities. So I think this is something just to keep in mind. And the other thing for sure is that if you rise in deep tech, in climate tech, it’s when you’re not like working on a digital product, but you need hardware. In our case, we needed a laboratory.
Steff Gerhart
This is a whole different story in terms of how quickly, you know, the hockey stick goes up and how much money you need early on. So a lot of investors, even though they say they want to invest in climate tech, shy away from that and in the end decide, you know, for that next digital tracking tool or whatever. So I think it’s just important to clearly establish very early on in fundraising what you’re doing and if they are like interested in that because then you can save a lot of time, probably 60, 70% of the investors go away and then you can really focus on the bunch that is willing to go that journey with you. And having the right investors is just so incredibly important for your success.
Brett
Yeah, makes perfect sense. Now final question for you before we wrap let’s zoom out three to five years into the future. What’s the big picture of vision look like?
Steff Gerhart
So for us, we really need scale, right? Because in the end, we are in this for the climate. We want to unlock the built environment as a carbon sink for this biochar industry. And that means we need to demonstrate that we are able to handle the complexity that comes along with its material and able to kind of process it in a way that it can consistently be introduced into the construction value chain. So this is more of a focus for the product team. So not so much the focus of, you know, our conversation today in terms of go to market, I would say it is to expand. So right now we are in one particular market in, let’s say Central Europe.
Steff Gerhart
So we are looking for expansion regionally, you know, Europe and then also going towards North America, Middle east, but also market segment wise. For us, it will be important to become more cost competitive to bring down the green premium and then move from the premium market into the mass market.
Brett
Amazing. I love the vision. I really love this conversation. We’re going to wrap here. Before we do, if there’s any founders that are listening in that want to follow along with your journey, where should we send them?
Steff Gerhart
Definitely check out our website, it’s ecolocked.com, or follow us on LinkedIn. And there’s always also the opportunity to connect with us. So via email or via LinkedIn, we receive those requests and we answer them. So, yeah, always happy to chat.
Brett
Amazing. Well, thank you again. I really appreciate it.
Steff Gerhart
Thank you. Bye.
Brett
This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io Podcast and for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening and we’ll catch you on the next episode.
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