Decarbonizing the construction and building industry is one of the largest sectors of the global economy that can drive up to a 39% reduction in global GHG emissions. At Extantia we’ve been diving deep into the alternative building materials segment to identify the best climate tech companies that can specifically reduce or decarbonize concrete in buildings. Especially given that concrete globally contributes to 8% of the world’s CO2 emissions.
With solutions ranging from “clean” concrete to bamboo-based pre-fab solutions, our takeaway was to identify a technology that did not impose limitations on architects and designers or drive developers to move away from traditional building standards and regulations. At the same time, we did not want the technology to compromise on carbon reduction potential.
One of the most mature solutions is cross-laminated timber (CLT) as a solution that may deliver the results developers are looking for, while delivering superior carbon reduction potential. CLT provides strong fire resistance and can enable support functions for highrises as well. CLT outperforms steel and concrete as the wood has the ability to store carbon, reduce labor costs, reduce building costs due to the need for less foundational support and enable faster build times.
However, current CLT solutions have the drawback of requiring developers to front a high CAPEX. Not to mention current CLT solutions also require specialized factories that can glue and pressurize large wooden sections.
We can’t choose between adhering to established industry rules and pursuing Net Zero innovation. To get incumbents in the construction industry to adopt new tech solutions, we need to achieve progress on both sides at the same time.
Our Investment In LEKO Labs
LEKO Labs has created a new wall and floor building material made completely of wood and wood fiber that can replace up to 75% of the concrete and steel currently required in creating a single structure. The method incorporates engineered wood and a fully circular production process, which is powered by AI optimisation and robotics. This combination not only unlocks a sustainable approach to building, but also greater insulating capabilities with thinner walls, allowing for up to 10% more floor space in a given building.
We invested in LEKO Labs’ Series-A alongside 2150, one of Extantia’s investments from our separate “Allstars Fund of Funds”, Microsoft Climate Initiative Fund, Tencent, AMAVI Capital, Frank Thelen from Freigeist and Rise PropTech Fund. We are especially proud of the opportunity to cooperate on this investment as LEKO Labs’ solution excites us as the best economically viable concrete and steel alternative for new buildings being constructed.
No Compromise Between Climate Impact And Utility
Where LEKO Labs thrives is the fact that they’re already trusted by major developers given their solution unlocks new growth drivers such as a 10% reduction in building costs at twice the construction speed, all while meeting existing building standards and regulations. This paired with the fact that their LEKO Superstructure can drive a 75% reduction in concrete + steel in buildings and an 87% reduction in heating and cooling needs means that there is massive carbon reduction potential for any developer that chooses to build with LEKO Labs.
The Value Of Real Installations
Most technologies in this emerging sector are very early stage and without any proven real installations. LEKO Labs stands out in this regard as they have not only completed pilot projects but have delivered full contracts and projects for 16 buildings to date.
LEKO Labs leveraged the sustainability and commercial benefits of CLT over traditional steel and concrete solutions to further develop the technology through a proprietary wooden lattice structure for frames and walls through their robotics-enabled, low CAPEX manufacturing process that uses 50% less wood. Effectively LEKO Labs has commercialised a CLT 3.0 that has been enabled by their new robotics-based manufacturing process.
With real installations proving the value of their LEKO Superstructure, it made it easy for them to grow their pipeline full of large developers looking to deploy their technology in new construction.
Pairing Technology Expertise With Commercialization Expertise
A common trend we see with climate tech companies we love to back at Extantia is the founding team makeup. The deeply technical founder paired with a business-savvy founder is the ideal dynamic we see in companies that succeed at speeding up their commercialisation cycles a lot quicker through to an exit.
LEKO Labs brings this with their founder and now CTO – Francois – and new CEO – Remo. Having a background in timber engineering and architecture enabled Francois to develop the LEKO Superstructure. Whereas Remo brings a history of building a billion-dollar company previously to the team – enabling him to pave a way to land contracts with major developers.
This dynamic has further helped them identify opportunities in automation and software solutions to drive the adoption of their technology. From using robotics to assemble LEKO Superstructure based buildings to leveraging software to optimize entire structures using LEKO’s material – these two are able to identify and build solutions to drive the business forward.
Carbon Math/The Impact
For investments like this, we measure and project the CO2 emissions savings the company can have throughout its lifecycle.
Current construction accounts for a minimum of 900 kgCO2/m2. The worst-case estimate of LEKO’s construction emissions is 646 kgCO2/m2. Hence there are at least 254 kgCO2 savings for every square meter built by Leko instead of traditional construction.
An estimated 8.5 billion square meter will be built on average by 2050. That translates to 2.2 Gt of annual emissions that can be targeted by the LEKO technology.
LEKO Labs is now working on scaling up its robotics-based manufacturing facilities to continue to make it easier and more affordable for developers to deploy their hardware and software solutions. We hope you’ll share the excitement we have for LEKO Labs.
