After Gobbling $20M More, Harvest Power Still Hungry for Table Scraps
In recent years, the recycling of glass, paper, plastic, and metal has become second nature for most people. That’s thanks in part to cities and recycling companies making the process much easier by instituting things like single-stream recycling.
Harvest Power is among the companies trying to make the recycling of organic waste—think table scraps, oil and grease, lawn clippings, wood, and so on—as commonplace as the recycling of soda cans. Most organic material gets dumped in landfills these days, where it rots and turns into harmful methane gas. Waltham, MA-based Harvest converts organic waste into useful garden soil, mulch, and fertilizer, as well as biogas that can be turned into heat, electricity, and fuel.
But assembling the pieces that enable such a societal shift takes time and effort—from constructing the facilities capable of recycling organic waste, to convincing policymakers to enact changes that incentivize such recycling, to coordinating with waste removal companies, to getting people to change their behavior.
“Harvest is trying to break that deadlock,” says CEO Chris Kasper (pictured above). “We are in the process today of building that infrastructure in North America.”
Harvest has more than 40 facilities. Its business consists of three parts: processing the waste into soils and compost that get sold in bulk to farmers, retailers, and commercial landscapers; packing soils and mulches into smaller bags for sale at stores like Lowe’s and Home Depot; and turning waste into electricity, which is sold to utilities and municipalities.
Harvest has three commercial-scale “anaerobic digestion” facilities—two in Canada, one in Florida—whose processing capacities range from 40,000 to 130,000 tons of waste annually, enough to produce between 1 and 3.2 megawatts of power, Kasper says. More anaerobic digestion plants are in the works, including one in the Cape Cod area, Kasper says.
Three years ago, when Xconomy last checked in with Harvest, the company had about 400 employees and was generating around $100 million in annual sales. Today, it employs 450 people, and the company should hit $150 million in revenue this year, while once again turning a profit, Kasper says. Harvest intends to keep hiring and growing its footprint, although he declined to give specific numbers.
Those expansion efforts got a boost recently with $20 million more in equity funding. Harvest has now raised a total of $350 million in equity, grants, and debt financing since its 2008 inception, Kasper says. (That makes it one of the most heavily funded technology companies in New England.)
Kasper was promoted from CFO to CEO last month, marking Harvest’s second change at the top in as many years. He succeeded Kathleen Ligocki, who Kasper says recently left to take over a California-based company in the auto sector, where she has spent most of her career. She remains on Harvest’s board.
Before Ligocki, Harvest was led by co-founder Paul Sellew, who remains a company advisor.
Kasper has his work cut out to take Harvest to new heights, but he could be the right leader at the right time. His mother instilled a passion for home gardening and composting in him when he was young, he says, a tradition he is carrying on with his children. “I have a real passion for [Harvest’s] business. I personally believe in it,” he says.
On a professional level, he says his expertise is taking mid-sized businesses like Harvest and finding ways to accelerate their progress. “The bottom line is growth for us right now,” he says. “I think that we have figured out the right business model and the right go-to market approach.”
Rob Day, a partner with Boston-based Black Coral Capital, agrees. Day’s firm invests in companies finding innovative ways to sell advanced technologies that produce physical resources, but it is not a Harvest backer.
Anaerobic digestion technology “is not new,” Day says. “But what [Harvest] did is they set about trying to build a business that was really good at developing those projects. It allowed them to go out there and scale pretty quickly.”
One of the keys for Harvest, Kasper says, has been working directly with leaders of communities where it wants to establish operations. In some cases, that means negotiating with local governments to receive financial incentives to help fund construction of the company’s recycling facilities, he says. It also means working with officials to craft policy that encourages organics recycling.
The Vancouver area, for example, implemented a food scraps ban this year that fines residents and businesses if garbage loads contain too much organic waste. Citizens are now asked to bag such waste separately, and those bags will get picked up curbside for recycling purposes. That should be a boon for Harvest’s facility there, which was built three years ago.
The experience in Vancouver shows how organics recycling initiatives take years and face a “chicken and egg” conundrum, Kasper says. It doesn’t make sense to force people to divert organic waste from landfills if the infrastructure isn’t in place to handle recycling. But it can be risky to build the infrastructure without rules pushing citizens to recycle organic waste.
Harvest has spent a lot of time working with policymakers to “find a path forward where they can continue to put in place incentives that both attract the investment we’re looking to make to build the infrastructure, and also drive behavior in the communities in a more socially responsible manner,” Kasper says.
Some places are more progressive than others. In the U.S., Massachusetts and California are among the states that over the past four years have banned businesses from sending their organic waste to landfills.
At this point, we’re still years away from ubiquitous organic waste recycling, Day says. “But that doesn’t mean that [Harvest] can’t be profitable along the way to that vision,” he says.