In a surprising turn of events, Daniel Liss, who co-founded a popular social networking platform and a dating application, is now venturing into the world of steel production. This shift marks a significant transition from the digital realm to a traditional industry, showcasing Liss’s belief that he has discovered a groundbreaking opportunity in steelmaking.
His journey began with a series of thought-provoking articles he penned about antitrust issues in social media, which garnered attention from influential circles in Washington, D.C. This unexpected recognition led to an invitation to participate as a guest judge in a strategic war game exercise at the National War College in the spring of 2023. The scenario simulated a geopolitical conflict between the U.S. and China over Taiwan and the South China Sea, highlighting the critical importance of supply chains.
From this experience, Liss realized a stark reality: the United States lacks the necessary shipbuilding capacity and, crucially, the steel required for its defense infrastructure. This revelation ignited a deep interest in the steel supply chain, ultimately leading to the inception of his new venture, Nemo Industries.
Nemo Industries: A New Era in Steelmaking
Nemo Industries aims to revolutionize the steel production process by integrating artificial intelligence into its operations. Liss envisions a modernized approach to producing pig iron, a key component in steel manufacturing. He noted that many existing plants still rely on outdated methods, often using basic tools like Excel spreadsheets or even clipboards. While the expertise of the workforce is invaluable, Liss believes that these traditional practices do not scale effectively in today’s fast-paced environment.
Innovative Production Techniques
What sets Nemo apart is its ambition to construct its own furnaces, rather than merely providing software solutions for existing operations. Liss is convinced that companies that incorporate AI from the ground up can achieve a significant competitive edge, potentially realizing profit margins that are 20% to 30% higher than their rivals.
However, entering the steelmaking industry is not without its challenges. For instance, Hyundai Motor Group recently announced plans for a $6 billion steel plant in Louisiana, underscoring the substantial investments required in this sector. Nemo’s focus on pig iron production may allow for a more cost-effective operation, as it targets an intermediate product used in various steel alloys.
Environmental Considerations and Future Plans
Nemo plans to utilize natural gas to power its furnaces, a choice that significantly reduces carbon emissions compared to traditional coal usage. Additionally, Liss is exploring options for capturing carbon emissions from the production process, taking advantage of tax incentives that could enhance the project’s profitability.
Partnering with Liss is Michael DuBose, an experienced investor with a background in natural gas infrastructure. Their combined expertise will be crucial as Nemo seeks to scale its operations. The startup has already secured $28.2 million in funding and is currently negotiating a $100 million Series A round with existing investors. Furthermore, they have received offers exceeding $1 billion in incentives from two southern states, contingent on the establishment of three plants over the next 15 years.
Aiming for Ambitious Goals
While the challenges are significant, Liss emphasizes that such ambition is essential for attracting venture capital investment in the steel industry. Historically, basic industries like steel have yielded substantial returns for investors, and Liss draws parallels to the successes of iconic figures in American industrial history.
As he reflects on the past, Liss notes, “Many of the most successful companies that generated remarkable outcomes for their early investors were rooted in these foundational sectors.” With a vision for the future of steelmaking, Liss is poised to make a lasting impact in an industry ripe for innovation.