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Modern Day Alchemy: Decoupling the material supply chain

Deep Tech

Modern Day Alchemy: Decoupling the material supply chain

Words Jack Kennedy

December 5th 2024 / 8 min read

Over the course of the 20th century, our extraordinary technological progress depended on a surprisingly short list of critical materials. Without copper, there’s no electrification or electronics; without silicon, no computing; without iron, no transport nor machines. These raw materials have fuelled virtually every cornerstone of modern life.

Yet our reliance on these uncovers a somewhat uncomfortable truth: the trajectory of our progress over the next century is directly tied to the continued availability of these materials. And with that dependency comes a host of issues, from supply chain volatility to environmental degradation. 

So what if we could decouple materials from this fragile supply chain? It’s not as far-fetched as it sounds. 

Lab-grown diamonds are an example of this today. By moving the bottleneck from geology—how many diamonds can be mined—to the amount of energy and basic feedstocks are needed instead, we’ve transformed diamonds into a far more predictable, scalable, and affordable commodity.

This shift could have profound implications on the market. What if copper could be replaced? What if there’s a better way to make rubber? What if waste materials could be transformed into something far more valuable? 

Like modern-day alchemists—minus the magic—let’s look at how startups are tackling these challenges today. 

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Opportunities in New Materials 

The search for new materials starts by reimagining the discovery phase. The process is pretty similar to modern drug discovery. In both fields, the path from concept to product begins with prediction, moves through extensive testing and validation, and finishes with a product that can be scaled to industrial levels. 

Both fields also share similar challenges: high costs, long timelines, and the critical need for precision. First, let’s talk about the opportunities in this space. 

AI for new materials 

Efficiency is at the core of mining, and AI-driven materials discovery offers a new way to drive this further. By modelling the properties of minerals and metals, computational tools can predict combinations that outperform traditional resources. This approach could lead to materials with enhanced conductivity, lighter weights, or greater resilience. 

Copper, for example, is expensive to extract and environmentally taxing. But new conductors like graphene, identified through advanced simulations, might meet or even exceed copper’s performance.

There are a number of startups looking at this space in different ways. Backed by $30m in funding and advised by the ‘Godfather of AI’ himself, Cusp AI wants to be the search engine for materials, allowing its customers to find and create new material properties. Material Nexus, meanwhile, has used AI to solve a particularly thorny problem by developing a magnet that’s free from rare earth elements. 

With Google’s Deepmind discovering millions of new materials, and even Meta releasing one of the world’s largest materials datasets for free, the challenge in this space is that AI discovery by itself is no longer enough. 

Startups are responding to this competitive space by integrating vertically—building tools, testing processes, and scaling solutions under one roof.

Integrated discovery 

The clinical trial phase in drug discovery is infamous for its high costs and failure rates. After years of effort and millions of dollars poured into thousands of predictions, many products still fail to deliver on their promise. The same challenges apply to materials science: turning a promising discovery into a validated, scalable product is a lengthy, high-stakes process.

That’s why we’re excited by startups that combine software and hardware to drastically improve on both time and success rates. Altrove AI is focused on new inorganic materials, and uses AI to identify the most promising pathways to a material which is then rapidly tested in its automated lab. Similarly NewFound Materials is focused on ways of producing existing compounds faster and cheaper by synthesising new pathways to get there. 

This approach can take two forms: bottom-up by narrowing down thousands of potential recipes to find the most viable, or top-down by solving for a specific material replacement. Bacta is an example of the latter, working to create a high-quality, carbon-negative rubber. 

While this approach is capital intensive by having to invest in AI and manufacturing infrastructure, it has the advantage of potentially owning a highly valuable market niche.

Transforming waste materials

The mining industry was once described to me as a waste management business that occasionally extracts valuable materials. From tailings and slag to excess rock, the byproducts are vast—but they also hold potential.

It’s something I covered in my article on rethinking wastewater, but there's a huge opportunity to extract minerals and metals from waste sources. Startups like Sunchem are capturing metals like gold from mining waste, while others like Magrathea are looking to capture elements like magnesium from water. 

One of the most interesting opportunities is with carbon itself. Long seen as a liability, CO2 is now being reimagined as a resource. Today, startups are transforming it into everything from building materials to fuels and polymers. Startups like General Galactic are converting CO2 into rocket fuel, while Turnover Labs is converting CO2 into essential chemicals for industrial processes.

At its heart, the materials sector remains a commodity business, and with that comes susceptibility to booms and busts. By decoupling materials from finite resources, the next wave of startups has an opportunity to drive new growth without sacrificing on stability. 

So, whether you’re replacing a critical material or finding new ways to make them, we'd love to hear from you. Reach out to Jack (jack.kennedy@foundersfactory.co) or apply directly here. 

Apply here

About Jack

Jack Kennedy is an Investor at Founders Factory, focused on climate and deep tech. He leads investments for our Mining Tech program with Rio Tinto. He brings prior experience both founding and investing in climate tech.

Words by
Jack Kennedy
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