From Social Media to Steel Production: The Journey of Dispo’s Co-Founder

Daniel Liss, co-founder of the social networking platform Dispo and the dating app Teaser AI, believes he has identified the next major opportunity: steel production.

This surprising path began with a series of opinion pieces he wrote for TechCrunch, focusing on anti-trust enforcement in social media.

According to Liss, these articles captured the attention of influential figures in Washington D.C., leading to his invitation as a judge for a war game capstone exercise in spring 2023, organized by the National War College. The scenario revolved around the U.S. and China vying for control over Taiwan and the South China Sea.

Liss’s main takeaway from the exercise? “Our vital supply chain for the arsenal of democracy — the very ships my grandfather served on — is lacking ship-building capacity. And even if we had it, we wouldn’t have the steel to construct them,” he remarked.

At that point, Liss became “incredibly intrigued — even obsessed” with the steel supply chain, which led to the founding of Nemo Industries.

Nemo Industries, Liss’s latest venture, proposes a solution that appears to lie at the crossroads of two uniquely American interests: steel production and AI technology. While the company has kept a low profile until now, Liss provided some insights to TechCrunch.

The first and most evident aspect: Nemo aims to utilize AI to boost pig iron production, modernizing a sector Liss describes as outdated. “These plants are managed, at best, with Excel spreadsheets, and at worst, with clipboard technology,” he pointed out. Although the operators possess “immense expertise,” he observed, it does not scale effectively.

Yet, Liss doesn’t see Nemo as merely another industrial software solution. Rather, the company plans to build its own furnaces, inspired by Liss’s belief that companies leveraging AI from the beginning can achieve a “20% to 30% margin advantage” over competitors.

In the steelmaking sector, such conviction comes with a significant financial commitment. In March, Hyundai Motor Group announced plans to construct a $6 billion steel plant in Louisiana to support its U.S. operations. Nemo’s facility may not reach that spending level, as its focus will be on pig iron, a crucial intermediate product for steelmakers.

Nemo intends to power its furnaces with natural gas, which emits less CO2 than the coal commonly used in the iron and steel industries. Liss mentioned that the company is considering carbon capture for its furnaces; tax incentives established under the Inflation Reduction Act are largely favorable, making this initiative viable for Nemo, he added.

Liss’s partner at Nemo is Michael DuBose, an investor who previously worked at Cheniere Energy, a natural gas firm. “He’s built billions in LNG infrastructure,” Liss noted.

To thrive, the startup will need that level of scale. According to PitchBook, Nemo has already secured $28.2 million and is currently in talks with existing investors to raise a $100 million Series A round. Additionally, the company has received offers exceeding $1 billion in incentives from two southern states, conditional on establishing three plants within 15 years, as per a source familiar with the discussions.

It’s a daunting challenge for anyone to take on, but Liss believes such ambition is crucial for the steel sector to deliver the returns that venture capitalists desire. He emphasized that traditional industries like steel have historically yielded substantial profits for investors.

“If you analyze our nation’s history, many of the most extraordinary companies that generated outsized returns for their early investors have emerged from these sectors,” Liss remarked. “Ultimately, what were the Rockefellers, Carnegies, Mellons, and Fricks investing in? The financial stakes in these fields are significant.”