Daniel Liss, the visionary entrepreneur behind social network Dispo and dating app Teaser AI, has set his sights on a new frontier: the steel industry. Liss' latest venture, Nemo Industries, aims to modernize steelmaking using artificial intelligence, targeting an industry that he believes is severely outdated.
The inspiration for Nemo Industries stemmed from Liss' involvement in a war game simulation hosted by the National War College in 2023. The exercise, which involved a hypothetical conflict between the U.S. and China over Taiwan and the South China Sea, highlighted the U.S.'s lack of shipbuilding capacity and steel production. This realization sparked Liss' interest in the steel supply chain and led to the birth of Nemo Industries.
Nemo Industries is poised to disrupt the steel industry by leveraging AI to optimize pig iron production. Liss argues that the current state of steel plants is woefully outdated, with many relying on Excel spreadsheets or even clipboard technology. While the people running these plants possess invaluable expertise, it is not scalable.
Liss is not positioning Nemo as just another industrial software company. Instead, the startup plans to build its own furnaces, driven by the belief that companies utilizing AI from the outset will have a 20-30% margin advantage over competitors.
Steelmaking is a capital-intensive industry, as evidenced by Hyundai Motor Group's announcement in March to build a $6 billion steel plant in Louisiana. Nemo's operations will focus on pig iron, an intermediate product used by steelmakers to create various alloys. This approach may reduce the overall cost of the plant.
Nemo Industries plans to power its furnaces using natural gas, which emits less carbon dioxide than coal, the traditional fuel source in the iron and steel industry. Liss mentioned that the company is considering capturing carbon pollution from the furnaces, a move made profitable by tax incentives under the Inflation Reduction Act.
Nemo's partner, Michael DuBose, brings extensive experience in building LNG infrastructure from his time at Cheniere Energy, a natural gas company. This expertise will be crucial for Nemo's success on the scale required for the venture.
The startup has already raised $28.2 million and is currently in talks to secure a $100 million Series A round from existing investors. Additionally, Nemo has received offers for over $1 billion in incentives from two southern states if the company can build three plants within 15 years.
Liss believes that the steel industry, a basic yet critical sector, holds the potential for significant returns for venture capitalists. Historically, basic industries like steel have delivered outsized outcomes for early investors, as evidenced by the success of the Rockefellers, Carnegies, Melons, and Fricks. With Nemo Industries, Liss aims to harness the power of AI to revolutionize steelmaking and create a new era of innovation in this foundational industry.