Index Ventures

Index makes first green tech investment in Lehigh Technologies

June 19 2008

Lehigh Technologies, Inc., a leading manufacturer of engineered ultra-fine rubber powder, announced today that it has closed a $34.5 million financing. Index Ventures and Kleiner Perkins Caufield & Byers co-led the transaction and participated alongside existing investors, including NGP Energy Technology Partners and Florida Gulfshore Capital. The investment will fund Lehigh's continued growth to respond to increasing demand for its products.  In conjunction with the financing, both Neil Rimer from Index Ventures and Ellen Pao from Kleiner Perkins joined the Lehigh board of directors.

"This is our first pure-play greentech investment," stated Neil Rimer, partner and co-founder of Index Ventures. "We decided to invest in Lehigh because it solves a major environmental problem with a product that offers a compelling value proposition to large users of natural and synthetic rubber. We believe Lehigh's product is cheaper and higher quality than other recycled rubber solutions, and Lehigh is helping its customers, including tire and plastic manufacturers, solve their natural and synthetic rubber supply issues. Lehigh's technology is proven today and its current plant's capacity is 100 million pounds per year. We see this as a truly global opportunity and are impressed by the scalability of Lehigh's operations."   

Ellen Pao, partner at Kleiner Perkins Caufield & Byers, adds, "We look for entrepreneurs and innovations that can both provide significant customer value and address today's most pressing environmental concerns. Every year, more than 300 million tires are scrapped in the U.S. alone.  That's about one tire for every American or over 6 billion pounds of scrap rubber. Instead of burning or burying this material, we can use it to make tires, plastics and a myriad of rubber and specialty chemical applications. We are excited to join the Lehigh team and help them build a world class business."

Lehigh's powder is used in tires, automotive parts, building materials, carpeting, paints, coatings, plastics, consumer products, rubber goods and other industrial applications. Tires containing Lehigh's rubber powder meet or exceed the performance of ordinary tires while improving fuel efficiency and meeting safety standards. The Company estimates that over 30 million tires currently on the road in the U.S. incorporate Lehigh powder.  Globally, Lehigh estimates that the market for recycled rubber powder exceeds four billion pounds annually, and new uses are being developed every day. In addition, using recycled rubber instead of virgin polymers generates significant environmental benefits. If tires contained 10% recycled material, manufacturers would save close to a billion gallons of oil annually and prevent close to two billion pounds of carbon dioxide from being released into the atmosphere each year.

"This investment by two of the world's most renowned venture capital firms is a testament to the potential of Lehigh Technologies, our process and our powders," stated Dennis Gormley, Chairman and Founder of Lehigh. "The recycled rubber market is finally coming of age, and we are proud to be at the forefront of this emerging industry. This additional capital provides the resources we need to expand our production capacity and meet the growing demands of our customer base. And the financial expertise, growth experience and extensive networks of Kleiner Perkins and Index Ventures will be valuable assets to Lehigh as we continue our rapid growth."