An eastern Pennsylvanian industrial air pollution control firm is the newest portfolio addition for Century City-based venture capital firm Angeleno Group.

NESTEC, founded in 2005 and headquartered in Pen Argyl, joins about a dozen other clean energy and climate solutions firms under Angeleno Group’s umbrella. Operating across 35 U.S. states and in Canada, the company creates and services the emissions control systems industrial facilities are generally required to install to curb harmful air pollution.

Building on the company’s existing relationships in the advanced manufacturing, automotive and energy sectors, Angeleno Group’s investment will support NESTEC’s expansion into end-markets like renewable fuels, packaging, municipal waste and semiconductors. 

It’ll also help NESTEC push westward into the U.S. and reach Europe, and build its growing aftermarket business, which drives recurring revenue by servicing aging equipment. The company had previously been bootstrapped and supported by profits with no outside investments.

Danny Jaffe, an Angeleno Group partner involved in the deal, said the sustainability-centered venture capital firm was drawn to NESTEC as a leading provider of APC systems to the biofuels and bio-based building materials industries – two significant end-markets with stand-out growth rates. 

“This is a very large market, (worth) tens of billions of dollars, growing more rapidly than the general building products industries,” Jaffe said.

Biofuels are a form of renewable energy derived from organic materials like plants, waste and algae. The sector is expected to grow at a compounded annual growth rate of 11.3% through 2030, a Grand View Research report showed. That’s faster than competitor energy sources like hydrogen generation, which is expected to grow at 8.6% through 2033. As the industry scales, new facilities will require the systems NESTEC develops and deploys.

A resurgence in domestic manufacturing and accelerated onshoring is also boosting demand for industrial APC equipment, said Angeleno Group partner Anil Tammineedi.

“The emphasis and growth in onshoring of manufacturing in the U.S. is a huge growth area,” Tammineedi said. “It’s a trillion-dollar-plus investment that is going into the manufacturing sectors in the U.S., and it spans diverse end-markets.”

Beyond the bio-based economy, much of that capital is directed at semiconductor manufacturing through the CHIPS and Science Act of 2022. Semiconductors are critical to the advanced chips used in the artificial intelligence infrastructure that’s sprouting up across the country at record speed. 

Angeleno Group will help NESTEC ramp up its partnerships with semiconductor manufacturers and explore future deployment downstream, Tammineedi said.

“There is an opportunity to expand our product portfolio to directly go after data centers as well,” he said. “There’s a lot of new product development going on in the company, so that may be in the future.”

Reducing clients’ environmental footprints and operating costs remains a central focus as the company widens its reach, NESTEC founder and Chief Executive Jim Nester said in a news release. 

“We see a significant opportunity to bring that same standard of excellence to a much broader set of industries,” Nester said.

Angeleno Group expects NESTEC, which has installed more than 150 systems so far, to generate eight figures in annual revenue, Jaffe said. Given venture capital’s renewed interest in investing in companies in the APC space and ongoing attempts to estimate their true value, the firm kept financial details of the deal private.