Investing in Leko Labs to build with wood (and robots)
Leko Labs raises $21m led by 2150 to bring their robotic manufacturing approach to sustainable building with wood.
At 2150 we are constantly searching for solutions to the world’s biggest sustainability problems. Two of the biggest are our global addiction to building our world with concrete (8% of global CO2 emissions) and steel (7%). Both together are bigger than the US share of global CO2 emissions.
We started tackling cement and concrete through our investment into CarbonCure in 2020. Since then we have been trying to tackle the challenge of steel and steel reinforced concrete. While funding a green steel factory was not in our scope, we continued to explore other technologies. We eventually developed a thesis that we could solve the problem by going back to nature to build using wood instead.
Wood might make one think of a quaint Swiss chalet, but we have been building taller and taller buildings around the world using wood. The world’s tallest is the 85 meter high Mjösa Tower in Norway, and Australian tech company Atlassian’s upcoming HQ will be 40 storeys high.
The ability to build so tall with wood is enabled by Cross Laminated Timber (CLT) which was first invented by a Frenchman, Pierre Gautier, in 1947 and rediscovered by Germany and Austria in the 1990s. The technology switches the direction of the wood grain and uses massive factories with high pressure rollers to develop incredibly strong beams, walls and floors. And unlike popular perception, CLT is extremely fire resistant and “unlike steel remains structurally stable when subjected to high temperatures.”
We have been big fans of CLT for some time and our partner Mikkel has built some gorgeous buildings in the Nordics out of wood. The challenge was that the vast majority of CLT factories are in Austria and Germany and they are very CAPEX heavy. We were searching for an evolution of CLT which would incorporate its sustainability benefits but be much more capital efficient and scalable globally.
And that is when we came across Leko Labs out of Luxembourg. François the founder was an architect with a passion for sustainability and design who started tinkering with new ways to use wood for construction. He drew inspiration from the wings of a plane which need to be both light and strong and where a lattice structure is used to provide it with greater strength than beams of metal alone.
He applied this to a now patented system that can only be described as CLT 3.0 which creates a lattice structure of cross-laminated wood which uses less wood and has better insulation than traditional CLT while avoiding the sustainability impact of the same structure with concrete and steel.
What was particularly exciting about François’ vision was the application of standard automotive manufacturing robotics to the building of wooden structures, accelerating their manufacture. This has a massive impact for builders as it brings wood in line or lower cost than concrete and steel and allows for significantly faster assembly time on-site.
We loved François’ vision and passion for sustainable buildings… and then we met Remo who was a personal investor in the business and has now become the CEO of Leko. Remo had previously joined Lillium, the famed VTOL company, as Chief Commercial Officer and then COO. He helped to scale the organisation, negotiated massive funding rounds and brokered critical commercial regulatory partnerships. Having retired from Lillium and thinking what to do next, he went deep on the potential for Leko while diligencing his personal investment, and decided to partner with François to scale Leko to its potential. He is the perfect match for François’ vision while bringing the experience of fundraising, team building and commercial acumen.
With this stellar leadership team in place we set about validating the demand for the product. Everyone we spoke to in the built world ecosystem wanted to meet them. Along with Remo and François, we probably doubled their 2023 pipeline just during DD.
This feedback helped drive our conviction to lead Leko’s $21m Series A alongside some amazing co-investors. Microsoft’s Climate Innovation Fund and Tencent are joining the round. Some might wonder why technology companies would invest in a company that builds with wood in Luxembourg. For context, Microsoft is building 150 data centers a year and is actively investing and trialing technologies that make their data centers and the rest of their building stock more sustainable. Tencent has been less public about their sustainability focus, but it must be noted they plan to build a two million square meter city for which “sustainability is a primary driver of the design.”
We are also joined by AMAVI and Rise Prop Tech, who bring a diversified network of real estate LPs. In conjunction with 2150, Leko’s investor base currently owns and manages 500 million square feet of real estate, which equates to the the size of Manhattan. Finally the round also includes Extantia Capital with their deeply scientific focus on sustainability metrics.
We are proudly welcoming Leko to the growing 2150 family and excited to accelerate a transition for the world to #BuildWithWood.
2150 is a venture capital firm investing in technology companies that seek to sustainably reimagine and reshape the urban environment. 2150’s investment thesis focuses on major unsolved problems across what it calls the ‘Urban Stack’, which comprises every element of the built environment, from the way our cities are designed, constructed and powered, to the way people live, work and are cared for. Find out more at www.2150.vc