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Origin Materials Co-CEO on going public via $1.8B SPAC

Origin Materials, the world’s leading carbon negative materials company, is set to be acquired by Artius Acquisition. John Bissell, Origin Materials Co-CEO & Co-Founder joins Yahoo Finance Live to discuss why the company is going public via SPAC.

Video Transcript

ZACK GUZMAN: I want to put that discussion into practice here because, no doubt, there are a lot of companies who are going public via SPACs. The latest one here on our show is carbon negative products maker, Origin Materials, going through going public through a SPAC with Artius Acquisition to value that combined entity at nearly $2 billion. Origin makes carbon negative feed materials out of wood residue on their goal to replace fossil-based materials in a wide range of goods. Joining us right now is the CEO, co-CEO and co-founder of Origin Materials. John Bissell joins us right now.

John, thanks for taking the time. A lot to get into, not just the idea of going public via a SPAC, but also what your company does, which is pretty interesting in trying to capture carbon and go in that direction. I guess we'll start with what you do just because, to me, it stands out rather than some of these boring companies going through SPAC. We'll start there. Talk to me about what Origin's trying to accomplish.

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JOHN BISSELL: Yeah, sure, so we really see ourselves as a mission-focused company that has developed technology to enable the world to transition to sustainable materials. And what we do is, as you described, we take-- we take lignocellulose from wood inputs, we convert those into the building blocks that can be used to make all sorts of different materials and chemicals. We're using non-food sources, hence the wood, and that gives us a low carbon footprint. It gives us a strong cost advantage, which is important in all businesses, but particularly in materials and chemicals. And the products that we're starting with is really-- we're starting with PET, right.

So PET is an interesting material because it's a high-quality product. It's used in all sorts of goods, packaging, textiles, right, apparel. And so and what's interesting about PET is it already has one of the best end of life answers when it comes to materials.

It's recycled. It's one of the most highly recycled materials that we use as a species. And so being able to take such a high-quality material that can be recycled so effectively and making it carbon negative really felt like a win-win.

ZACK GUZMAN: So building off our discussion on SPACs, I mean, you're talking about that PET plastic, which I think you started developing there with your partnership with Nestle, right, I mean, talking about a plastic water bottle that was a little bit better for the environment. But this round, or this kind of deal to go public via SPAC also came with a private investment of $200 million from a partner of companies, a smattering of companies, including Nestle and PepsiCo. So talk to me about the decision to go public via a SPAC. What made you want to do this now? Since it sounds like you had those partnerships in place that could have had you guys growing for a bit more on the private side.

JOHN BISSELL: Yeah, I mean, I think from our perspective there are a couple of different advantages to SPACs, right. And this is comparing it to either a typical IPO or raising-- raising capital in the private markets. With a SPAC, you get-- first of all, you know, there's the typical things-- access to high certainty of close, relative speed. You know, the public markets have lower cost capital, generally speaking, than the private market. So that's attractive for a capital intensive business like ours, right.

We need to actually put a bunch of steel in the ground in order to produce the products that we sell to our customers. And so those are all attractive things. But I think the other really interesting part of the-- and, perhaps, adding on the conversation you were just having-- the other interesting aspect that we experienced was our process put us in front of a lot of really, really sophisticated investors. And that was important for us, right. You know, our business, which is a technology heavy manufacturing business, you really want to have very sophisticated investors investing in each round.

And you saw that a little bit with the pipe, right. You saw some of the most sophisticated investors on the planet, really, were investing in the pipe. And so this SPAC gave us the ability to talk to a wide variety of those kinds of sophisticated investors, instead of just being driven by just a single conversation or something along those lines.

AKIKO FUJITA: And, John, it really does feel like there are so many companies who are scrambling to get ahead of regulation as they see talk, hear of talks of a carbon tax, further disclosure rules. I'm wondering how that has led to an uptick in activity for your company. How significant has that been?

JOHN BISSELL: Yeah, it's been an incredible sort of run up of urgency over the last, I'd say, sort of 12 to 18 months, give or take. And what we've seen is just overwhelming amounts of demand, frankly speaking. That was actually a significant driver. You know, there's a bit of a question of earlier, it was, well, why SPAC for fundraising. But it's also, why now?

Why raise additional capital right now? And for us, it is our customers-- and I'm speaking broadly, right-- have really gone from this is an important strategic initiative to this is a problem that really needs to be solved very, very quickly, right, from their perspective. And so that was part of what was driving the urgency to go get significant additional capital in order to put more steel in the ground to produce more of these carbon negative products for our customers.

AKIKO FUJITA: When you talk about the innovation in this space, there has been so much money poured into technology for carbon capture. And when you look at the overall number in terms of how much carbon needs to be removed, I mean, it does seem pretty daunting. I'm looking at the UN numbers, 100 billion to 1 trillion tons of carbon dioxide that needs to be removed. What do you say to those critics who say that carbon capture is not the long-term answer here? That's really just sort of the quick fix that people are going for because they don't want to be taxed on the other end on their carbon footprint.

JOHN BISSELL: Yeah, I mean, I think we're focused on the scale of the problem, right, and how do you match the right kinds of technological, and manufacturing, and sort of business tools to the scale of that problem. And for us, that's a massive opportunity, right. We're going after, as you say, not only is it a huge carbon problem that has to be solved, but we're talking about materials, which are some of the most consumed materials by humankind, and trying to pair the two of those. How do we take this huge problem and this huge quantity of materials that we use and back them up to each other and sort of solve the problem with the volume of materials, right? And so I think you're right that there's a massive scale of problem.

It's not clear to me that in any way, shape, or form that we should only be trying to pick sort of the single winner in this category. So which is I think maybe one way of framing the question you just asked is, should we only try one kind of solution? I think the answer is, this is such a large problem, we need to be doing everything that we can possibly figure out how to do. And from a business perspective, there is more than enough room for lots and lots of companies to be extraordinarily successful and, essentially, the next generation's major industrial companies, right, in the process of solving this climate problem.

AKIKO FUJITA: Yeah, and to your point, we've seen so much BC money flow into this space. Appreciate you joining us today, John Bissell, Origins Materials co-CEO and co-founder.