# Drycor — Liquid Desiccant HVAC > [!info] Confidential > Source material is confidential. This note keeps **only my own analysis and framework links** — company specifics (commercial terms, partner details, deal mechanics, financials, clients, contacts) live in the original decks, not here. > [!abstract] One-liner > Drycor commercialises **liquid-desiccant HVAC** — a single system that cools, dehumidifies, sterilises, and produces potable water, with a materially lower operating cost than conventional air conditioning. It is distributing technology developed by an upstream provider, and is raising capital. See [[Investment Thesis Structure]] for how I frame an opportunity like this. --- ## What the technology is Conventional HVAC cools air and removes humidity as a side effect (energy-intensive over-cooling, then reheat). Liquid desiccant instead pulls moisture out of air **chemically** with a salt solution, decoupling humidity control from temperature. The claimed edge is **direct manipulation of the liquid desiccant via the refrigerant cycle**. Headline claims: a patent estate, an existing installed base, materially lower OPEX, high pathogen removal (sterilisation, not just filtration), and potable water as a by-product. > [!note] Why this fits my cooling map > Adjacent to but distinct from the data-center cooling stack in [[Cooling and Energy Efficiency Technologies]] and [[DX vs Chilled Water Crossover]]. The wedge is **latent load (humidity)**, where conventional [[Energy Saving|efficiency]] approaches are weakest. Worth checking whether the potable-water + sterilisation angle opens **[[Data Center MoC|data-center]]** and indoor-ag verticals beyond comfort cooling. ## Moat — stress test Run against [[Technical Moat Assessment Framework]] and [[Defensibility Principles MOC]]: - **Claimed moat:** patent estate + exclusive distribution + field data from the installed base. - **Tacit vs. true IP:** how much of the edge is in the patents vs. unwritten know-how held upstream? The [[IP Strategy for Deep Tech Startups]] question. - **Incumbent 60% solution:** Daikin/Trane/Carrier could ship a "good enough" desiccant hybrid. What's durable once the patents are visible? See [[Commercialising deep tech early is uncomfortable though essential]] and [[The Deep Tech Growth Cycle is different]]. > [!warning] Key-person / supply dependency > The IP and manufacturing originate **upstream**, with a single technical founder. The whole thesis rests on the exclusivity holding and the broader-rights / manufacturing-transfer arrangement actually converting. Textbook [[Key-Person Risk in Deep Tech]] — diligence the contracts, vesting, and tech-transfer plan before the moat claims. Also [[Founder Led Not Founder Lost - Why Ownership Matters]]. ## Market - Large HVAC TAM, with a meaningful serviceable slice in latent-load / air-quality applications. - Beachhead: **high-latent-load verticals** where humidity and air quality are mission-critical — ice rinks, healthcare, hospitality, indoor agriculture, pharma, clean rooms, manufacturing, natatoriums, cold storage. - Classic deep-tech go-to-market: **custom, application-specific deployments first**, generalise later — the pattern in [[3 Hard Truths of Deep Tech Commercialization]]. ## The raise Multiple raises are on the table at **different scales and valuations**, with a shift toward a **leasing / HVAC-as-a-service** revenue model. Specifics live in the decks. > [!question] Diligence questions > 1. Why the **valuation gap** between the raises? What changed? > 2. **Which path am I offered**, and does an early tranche convert cleanly into the later round (terms, discount, cap)? > 3. The move to **leasing / as-a-service** materially changes the cash-flow and capital-intensity profile. > 4. The growth ramp rests on the **manufacturing transfer and channel build** — what's the bottom-up bridge? > 5. **ESG framing** (potable water, pathogen removal, OPEX cuts) — verify against [[ESG Due Diligence Frameworks]]. ## My read (provisional) > [!tip] Where I land for now > Genuinely differentiated physics (latent-load decoupling) with a real installed base. The thesis hinges on **two contract questions** — does the exclusivity + broader-rights / manufacturing arrangement convert, and is the moat in the patents or in one person's head ([[Key-Person Risk in Deep Tech]]). Resolve the **valuation gap** before engaging. Treat any early tranche as an option on the later round, not a standalone bet. Score against [[Four Ds of Investing]] and size per [[VC Fund Performance Metrics]]. ## Related notes - Technology & market: [[Cooling and Energy Efficiency Technologies]] · [[DX vs Chilled Water Crossover]] · [[Energy Saving]] · [[Data Center MoC]] · [[Insurance x Climate Risk]] - Deep-tech investing: [[3 Hard Truths of Deep Tech Commercialization]] · [[Commercialising deep tech early is uncomfortable though essential]] · [[The Deep Tech Growth Cycle is different]] · [[Technical Moat Assessment Framework]] · [[Defensibility Principles MOC]] · [[IP Strategy for Deep Tech Startups]] · [[Key-Person Risk in Deep Tech]] - Diligence & structure: [[Investment Thesis Structure]] · [[ESG Due Diligence Frameworks]] · [[Founder Led Not Founder Lost - Why Ownership Matters]] · [[Four Ds of Investing]] · [[VC Fund Performance Metrics]] - System: [[Investing Principles]] · [[Investing System MoC]] · [[010 Venture Building]] · [[060 People MOC]]