Flush with cash: Washington startup lands up to $500M to deploy facilities treating sewage, dairy waste

Wastewater treatment startup Sedron Technologies — a Washington company that once served Bill Gates a glass of water purified from sewage — announced it’s being acquired by Ara Partners. The global equity firm is investing up to $500 million in Sedron to facilitate the deployment of its sewage and manure cleaning technologies, which gives it a controlling stake in the business.

“The Ara investment is largely designed to provide us with the equity on our own balance sheet to scale up production of additional projects and plants across the country,” said Geoff Trukenbrod, interim CEO of Sedron.

The startup is deploying facilities that efficiently and sustainably treat sewage biosolids and dairy waste. Sedron’s business model is to finance, design, build, own, operate and maintain the sites, which cost about $100 million to $200 million to build.

The company generates revenue from the municipalities and farms that use their services as well as from the sale of organic fertilizer and clean energy produced at the sites.

“Imagine having a bakery, and you get paid to get flour, and you get paid for your cookies,” said Stanley Janicki, Sedron’s chief commercial officer. “It’s a phenomenal business model, not that biosolids are cookies.”

Sedron launched in 2014 as a spinoff from Janicki Industries, a longtime aerospace engineering and manufacturing company. Both are based in Sedro Woolley, a city north of Seattle in a largely agricultural stretch of Western Washington.

In 2011, Janicki received funding from what is now the Gates Foundation to develop a wastewater purification system, leading to Sedron’s launch and a video that went viral showing Bill Gates drinking a glass of water produced from sewage. The foundation supported the technology as a means for treating waste in developing countries where untreated sewage could otherwise spread pathogens.

The company is breaking ground this month on a regional waste treatment facility that will serve multiple municipalities that are home to 2 million people in South Florida. Operations are expected to begin in 2028.

Sedron’s system takes municipal biosolids — the residual product from a wastewater treatment plant — and dries the material in an energy efficient thermal dryer. The biosolids are about 85% water, which is largely evaporated and disposed of, and remaining material is fed into a biomass boiler to produce clean electricity. The energy that’s generated helps run the dryer and the excess electricity is sold. Another benefit of the system is the process destroys PFAS “forever chemicals” contaminating wastewater.

The startup’s second line of business is managing manure from livestock operations — which is one of the biggest costs for a dairy farmer. Sedron takes the waste, removes the water for use in irrigation, and produces two high-value organic fertilizers: a solid material and a concentrated liquid nitrogen fertilizer. The fertilizers are sold nationwide for use on crops such as apples, berries and spinach.

Sedron’s treatment process is more affordable and replaces the use of manure lagoons to store the waste until it can be applied to fields as a liquid. The lagoons produce planet-warming methane and pose environmental threats if they leak nutrients that can stoke algal blooms in nearby waterways or contaminate drinking water.

The company has deployed its manure technology at two dairy farms in Indiana, including a 20,000 cow dairy, and expects to start operations at a Wisconsin farm this summer.

“Our focus is on positioning Sedron as the leader in circular waste management — converting waste into carbon negative commodities faster, more cost effectively, and with greater energy efficiency than any other solution available,” said Cory Steffek, a partner at Ara Partners, in a statement.

Sedron previously raised approximately $100 million in corporate debt and equity and about $200 million in project financing, some of which was institutional. All of the legacy shareholders rolled their equity forward, Janicki said.

The 275 employee company has offices in Washington state and Chicago, and operational facilities in Indiana, Wisconsin and Florida.

The startup is focused on U.S. deployments of its facilities, aiming to launch at least two new sites each year for the next five years, then potentially scaling up from there. Janicki said they’d still like to operate in developing countries to address that initial use case.

Sedron’s leadership emphasized the importance of delivering a service that resonates with investors and business partners, doesn’t require government support to succeed and also benefits the planet.

“As the world today is retreating somewhat from climate efforts,” Janicki said, “it’s exciting to be in a business that is positioned for exceptional growth and solving environmental problems while creating valuable products.”