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For the last two years, climate tech was on a tear. To be fair, so were a lot of other sectors. But when a slowdown hit tech investing in the middle of last year, climate tech startups bucked the trend and kept racking up the deals.
Now the party might be over, if preliminary data from a new report holds up.
Climate tech deal-making in the first quarter registered $5.7 billion across 279 deals, according to a new PitchBook report. The amount raised was down 36% year over year with 35% fewer deals. That’s certainly suggestive of a correction.
Investors have been keeping a closer eye on their pocketbooks as fears of a recession continue to rumble through the markets. And yet key economic indicators show a striking resilience in the U.S. economy, with strong hiring keeping unemployment low while consumer sentiment remains high. That hasn’t stopped economists and big names on Wall Street from continuing to predict a recession in the coming months. (Certainly not the first time they’ve done that.)
Still, all that noise tends to give investors the jitters. Since no one wants to be left holding the bag, investor sentiment has a way of becoming a self-fulfilling prophecy. If you’re a startup squeezed for cash, you’ve undoubtedly heard from your investors, and it may feel like a recession is already here.
Yet climate tech’s resilience has led some to call it the ultimate “recession proof” investment. Is that still true?
Maybe.
Let’s break it down. For one, these are preliminary figures looking at data through March 31. It’s hard to say how many deals closed in the last few days of the quarter that weren’t picked up by this report. It might be billions!
Climate tech tapped the brakes in Q1. Will the slowdown continue? by Tim De Chant originally published on TechCrunch
A warming world is going to need a lot of cold drinks. Problem is, today’s refrigeration tech is anything but climate friendly.
The way we cool our food and drinks has barely changed in a century and the technology is still reliant on environmentally harmful refrigerants. Now, a German startup thinks it can freeze those refrigerants out of the market using little more than magnets and water while consuming up to 40% less energy.
Magnotherm has been refining its technology, known as magnetocaloric refrigeration, since it was spun out of TU Darmstadt in 2019. Though it’s only a seed-stage company, the startup has already shipped five display coolers to beverage giant Coca-Cola, TechCrunch+ has learned, and it’s on track to build another 55 that will be rented out for events.
But beverage coolers are just the tech demo: “We are really building a bigger box for supermarket cooling cabinets,” co-CEO Timur Sirman said. “This is where we can actually reduce energy costs and maintenance costs significantly.” The global market for commercial refrigeration is worth $37 billion, according to Grand View Research.
To capitalize on the opportunity, Magnotherm is announcing a seed round today. In an exclusive with TechCrunch+, Sirman said the company was shooting for €5 million, “and now, we’re actually oversubscribed.” Investor interest was so great that they’re closing the round with €6.3 million.
Extantia Capital led the round, with Hessen Kapital, Lauda Dr. R. WOBSER Beteiligungs-GmbH and Revent joining. Four investors from the Better Ventures Angel Club also participated.
The technology Magnotherm hopes to dethrone is broadly used and deeply entrenched. It’s not as efficient as it could be, but more troubling are the substances it uses to keep things cool. The refrigerator sitting in your kitchen gets its chill from the physical properties of its refrigerants, the gases that loop through the cooling system.
None of these refrigerants come without tradeoffs. First generation refrigerants — freon and its ilk — chewed a hole in the ozone layer. Newer ones are more ozone-friendly, but they are powerful greenhouse gases, warming the Earth hundreds to thousands of times more than an equivalent amount of carbon dioxide.
Countries are working to phase out their use, but finding replacements hasn’t been easy. One frontrunner, propane, is flammable, and regulators have hesitated to greenlight its use in larger refrigerators in case of leaks. Carbon dioxide is another contender, but it only works as a refrigerant under very high pressures, which makes the whole system more expensive.
Magnets and water net Magnotherm $6.9M seed round to kill hazardous refrigerants by Tim De Chant originally published on TechCrunch
Pity Donald Trump. He spent four years in office tearing up trade agreements and ranting about rewriting old ones, all to little avail. Now, a key U.S. climate law is doing more to change the dynamics of international trade than any blustering and bullying ever did.
The Inflation Reduction Act has been hailed as a win for domestic producers of minerals that are critical to electric vehicles and other hallmarks of the decarbonized economy. The most impactful so far have been the provisions that require a minimum amount of domestic sourcing and processing to be eligible for the $7,500 EV tax credit. That language alone has spurred tens of billions of dollars of investment in the U.S. battery supply chain.
But there’s no way the U.S. can produce all that’s needed — the country simply doesn’t have enough reserves, while China has a lock on many parts of the market. So the law also includes a handy loophole qualifying minerals from countries with which the U.S. has a free trade agreement. The law already qualified “North American” suppliers, and the free trade language opens the door further.
Late on Monday, the door opened a little wider as the U.S. and Japan announced a trade deal encompassing cobalt, graphite, lithium, manganese and nickel, all minerals that are key components of EV batteries. The agreement opens up both markets to new supplies of the minerals, allowing battery manufacturers and automakers to benefit from the IRA’s minerals requirement.
For now, Japan is the only country to successfully negotiate a new agreement in the wake of the IRA, but it probably won’t be the only one. The EU, which has made no secret about its displeasure with the new law, is also in talks with the U.S.
In the seven months or so since the IRA was passed, the global landscape for critical minerals and battery manufacturing has changed rapidly, and a potentially steady stream of new free trade agreements promises to keep things fluid. For founders and investors alike, that injects a fresh dose of uncertainty.
Why startups should care about geopolitical repercussions of US climate law by Tim De Chant originally published on TechCrunch
One fusion startup is betting that a 70-year-old idea can help it leapfrog the competition, so much so that it’s planning to skip the experimental phase and hook its prototype reactor up to the grid.
The decades-old concept, known as a stellarator, is deceptively simple: design a fusion reactor around the quirks of plasma, the superheated particles that fuse and generate power, rather than force the plasma into an artificial box. Easier said than done, of course. Plasma can be fickle, and designing “box” around the fourth state of matter is fiendishly complex.
That’s probably why stellarators spent years in the fusion-equivalent of the desert while the simpler doughnut-shaped tokamak ate everyone’s lunch, and nearly all of their research funding.
But not all of it. Type One Energy is the brainchild of a handful of physicists steeped in the stellarator world. One built the HSX stellarator at the University of Wisconsin-Madison, two more performed experiments on it, and a fourth worked on the Wendelstein 7-X reactor, the world’s largest stellarator.
Together, they founded Type One in 2019 and nudged forward their approach to fusion at a steady pace. The company wasn’t in stealth — TechCrunch+ identified it as a promising fusion startup last year — but it was operating on a slim budget.
Fusion startup Type One Energy gets $29M seed round to fast-track its reactor designs by Tim De Chant originally published on TechCrunch
Ever since they were discovered over 100 years ago, superconductors have seemed a bit magical.
You might have seen one on YouTube, levitating above a pool of liquid nitrogen, shrouded in vapor as the super-chilled seventh element boils off. Or maybe you’ve been inside a much larger one that was cooled by liquid helium, generating tremendous magnetic and radio waves that allowed doctors to peer inside your body as part of an MRI.
Even with their delicate temperature requirements, superconductors have become key players in science, medicine and technology. So you can imagine the excitement when earlier this month, a team of scientists led by Ranga Dias, a professor at the University of Rochester in New York, claimed in a paper that they’d created a room-temperature superconductor, one that exhibits the same magical properties at 69.8 degrees Fahrenheit, to be exact.
If the claims are true, and if scientists are able to refine the product further, it could become a truly transformative technology. Fusion reactors, which rely on superconducting magnets to confine the blazing hot plasma, would grow smaller and cheaper. The electrical grid would stand to be transformed, as lossless superconductors would make transcontinental power lines a reality. Maglev trains might stop being the butt of jokes and become a real alternative to air travel.
In order to capitalize on their research, Dias and Ashkan Salamat, co-author on the paper, founded a company called Unearthly Materials.
I recently stumbled upon a YouTube recording of a virtual talk Dias gave to a Sri Lankan scientific society and university in which he claimed to have raised a $1 million seed round and a $20 million Series A for Unearthly Materials.
In his presentation, Dias claimed to have prominent investors, too. The $1 million seed round featured Union Square Ventures’ Albert Wenger, Spotify’s Daniel Ek, Dolby chairman Peter Gotcher and Wise co-founder Taavet Hinrikus. The Series A included Breakthrough Energy Ventures and Open AI’s Sam Altman; Ek and Hinrikus followed up.
Though its website is spare, and LinkedIn lists just six employees, Unearthly Materials is not exactly a secret. But at the same time, the company isn’t tracked on PitchBook and doesn’t appear on Crunchbase. It’s unusual for a widely publicized startup to raise $20 million without writing a blog post or issuing a press release.
Unearthly Materials claimed to have big-name investors, but they weren’t all on board by Tim De Chant originally published on TechCrunch
For all the focus on carbon pollution produced by shipping and aviation, some of the most challenging to abate will probably be residential buildings. In the U.S., housing units stand an average of 130 years before they’re torn down, according to a recent study.
Homes and apartment buildings built 100 years ago, or even 30 years ago, are woefully underprepared for the energy transition. More often than not, their major mechanical systems rely on fossil fuels, their electrical systems are undersized, and their walls and windows are leaky and poorly insulated.
All that can make for housing that’s less comfortable and less efficient than it needs to be.
Nearly a decade ago, Donnel Baird realized that in many cases, paying for retrofits like this can be cost-prohibitive, requiring a lump sum payment upfront. Even though the benefits might accrue over the years, it was a hurdle many owners couldn’t or didn’t want to cross.
So he founded BlocPower, which has been chipping away at the problem for nearly a decade, developing a roster of projects to prove its retrofit-as-a-service business model that’s focused on low-income communities. This week, it announced that it had raised nearly $25 million in equity and $130 million in debt financing.
The Series B round was led by VoLo Earth Ventures and joined by Microsoft Climate Innovation Fund, Credit Suisse, Builders Vision, New York State Ventures, Unreasonable Collective, Kimbal and Christiana Musk, Gaingels, Van Jones, Kapor Capital, My Climate Journey, Tale Venture Partners and NBA star Russell Westbrook. Debt financing was led by Goldman Sachs.
BlocPower hits its stride, landing $25M Series B to expand its residential energy retrofit platform by Tim De Chant originally published on TechCrunch
Climate change is a problem important and pressing enough that investors have begun to grasp the opportunities that arise when trying to solve it. Now, they’ve started to cast their nets wider for other, adjacent opportunities.
Tech that serves to conserve the oceans while using it to replace older, more harmful means of generating energy and food seems to be one such opportunity. In fact, when we asked 10 investors in the sector to share their thoughts on the space, we quickly learned that ocean conservation tech startups are seeing more and more interest from generalist investors now that climate change is hot and people are seeking more ways to mitigate its effects.
“Climate change used to be more focused on terrestrial operations. It is now ‘warming’ up to ocean conservation,” Daniela Fernandez, managing partner of Seabird Ventures, told TechCrunch.
The world’s oceans and its climate have always been tightly coupled. Winds generate ocean currents, which in turn influence weather patterns both over the open water and deep into the continents.
“Our planet is 70% ocean, so the urgency of facing and solving climate change can only be properly addressed if we include the ocean in the equation,” said Rita Sousa, partner at Faber Ventures.
The open ocean also contains tremendous amounts of energy. Previously, accessing it meant drilling into the ocean floor to tap hard-to-reach deposits of oil and gas. But today, it increasingly means tapping the enormous energy represented by the ocean’s winds and waves. Just offshore wind alone has the potential to meet global electricity demand by 2040, according to the IEA, which is well in excess of all offshore oil and gas production today.
Stephan Feilhauer, managing director of clean energy at S2G Ventures stressed the viability of technologies like offshore wind as commercial alternatives to fossil fuels: “Offshore wind has established supply chains across the globe. It is possible today to manufacture, install and operate gigawatts of offshore wind energy using technology and equipment that is well established and has years of operational data to help us understand its performance. Offshore wind is the only ocean-based renewable technology that meets these criteria today.”
The oceans are constantly exchanging gases with the atmosphere, too; most importantly withdrawing and storing about 30% of all carbon dioxide pollution. The ocean’s capacity as a carbon sink has created problems for myriad marine life, which have depended on historically stable acidity levels that are now creeping higher. However, this very capacity also creates opportunities to put key nutrient cycles to work and capture humanity’s excess emissions.
“A healthy ocean will continue to provide crucial opportunities for carbon sequestration,” said Peter Bryant, program director (oceans) at Builders Initiative. “There are a number of opportunities for increasing the ocean’s ability to store carbon. We have biological approaches that include ecosystem restoration, seaweed cultivation and iron fertilization; chemical solutions where you use minerals to lock dissolved carbon dioxide into bicarbonates; and electromagnetic approaches that store carbon by running electric currents through seawater.”
Founders and investors have a growing appreciation for the ocean’s potential as a resource for renewable energy and its capacity to buffer and even solve some of the climate problem. “We’re confident in the ocean’s resilience here. It’s simply one of the best resources we have in the fight against climate, and that means opportunity,” said Reece Pacheco, partner at Propeller. “We won’t achieve our climate goals without the ocean. Full stop.”
Christian Lim, managing director at SWEN Capital Partners, agreed: “It took too much time, but finally the ocean is being recognized as a critical piece of our fight against climate change.”
We spoke with:
Climate change is the elephant in the room. Has the issue’s rising profile sucked the air out of the room or is it bringing attention to ocean conservation that otherwise wouldn’t be there? How have things changed in the past five years?
Climate change has been a topic for decades. It used to be a “nice to have” about a decade ago: “If you have the extra funds to perform climate risk assessment, then we will dedicate it to climate change.”
Now, it’s more of a “must have.” If we don’t address climate change, we’ll see more extreme weather events. Over the past five years, we’ve seen more focus on ocean conservation, but there is still a $149 billion annual ocean funding gap. Climate change used to be more focused on terrestrial operations. It is now “warming” up to ocean conservation.
We are just now beginning to see a distinct shift in tone. The thinking used to be that “the ocean is a victim of climate change,” but now the thought is more “the ocean can become a climate hero” and plays a huge role in reducing our carbon footprint. Yet, this shift is still very much in its infancy. In particular, the philanthropic community is just starting to recognize that there is an urgent need to support efforts to develop ocean-based climate solutions.
Until now, most climate funders focused on terrestrial or atmospheric issues, and ocean funders focused on important, but only tangentially climate-related ocean issues such as ending unsustainable fishing practices and establishing marine protected areas. The ocean is already the biggest carbon sink on the planet, and we need to better understand both what absorption of all that carbon is doing to ocean ecosystems, and how much more it can potentially contribute without disrupting its other critical ecosystem functions.
It’s also been encouraging to see governments taking action to truly prioritize and create financial incentives for investing in climate/ocean innovations, such as the bipartisan Infrastructure Law passed in the U.S. in 2022. There is also an upswell of talent realizing that working a “typical” job is no longer an option if we won’t have a livable planet in the next seven years. We are seeing society reset its priorities and climate is one of the highest ones at the moment.
Climate change has been called “recession-proof” because governments and investors have come to recognize the scope, scale and urgency of the issue. Do you think that’s true of ocean conservation tech as well?
Yes. Climate change and ocean restoration are inherently linked. The ocean is humanity’s biggest protection against climate change, as it produces more than half the air we breathe and absorbs 93% of excess heat from global warming.
Ocean tech and climate change companies and investors all have the same goal. The urgency of the climate crisis has kept passionate funders and entrepreneurs engaged in the development of solutions regardless of the state of the economy.
Climate change has affected the oceans greatly, causing everything from rising water temperatures to more acidification. How are you approaching the question of climate change in your investments?
Seabird Ventures is internally tracking impact and reporting on social and/or environmental factors in our investments. We have externally reported on the following key ocean impact areas:
To fix the climate, these 10 investors are betting the house on the ocean by Tim De Chant originally published on TechCrunch
Every year, about 35% of the food supply in the U.S. is wasted. About half of that’s because of picky eaters or outsize restaurant portions, but the rest happens further upstream, according to the U.S. Environmental Protection Agency, with about 6% to 13% occurring at grocery stores.
For grocery stores, which operate on very thin margins, that loss is significant. The environmental toll is big, too: Grocery store and other retail food losses in the U.S. alone represent 10 million to 20 million metric tons of carbon pollution annually. That’s about as much as some entire countries, like Kenya or Guatemala.
A large part of food waste’s carbon problem happens at the landfill. There, microbes break the food down anaerobically, meaning without oxygen. That process releases methane, a greenhouse gas that’s 84 times more potent than carbon dioxide over 20 years. Landfills can capture the methane and burn it, using it to produce power, for example.
Burning the methane transforms it into carbon dioxide and some other pollutants. While the pollution burden isn’t ideal, from a climate perspective, it’s probably better than the alternative. Only about a fifth of all U.S. landfills capture the gas; the rest just let it seep into the atmosphere.
Part of the problem with landfill gas is that it can be hard to capture. If you’ve ever seen a landfill, you probably understand why. They’re not exactly precision machines.
Intercepting food waste before it hits the landfill changes the equation, though. That’s where Divert hopes to step in.
The company, which was founded in 2007, works with grocery store chains like Ahold Delhaize, Albertsons, Kroger, Safeway and Target to tackle the problem. It starts by analyzing a store’s waste stream and suggesting ways to minimize waste in the first place.
Divert bags $100M growth equity, $1B financing to tackle grocery store food waste by Tim De Chant originally published on TechCrunch
The current battery boom might feel familiar to those who lived through the clean tech bubble that burst a decade ago, with an awful lot of money being invested in what are still nascent markets.
But certainly they’re bigger this time around: The number of electric vehicles on the road has more than doubled in the last seven years, for example, and demand doesn’t seem to be slowing. Market share for EVs has been growing even as the overall automotive market has softened in recent years.
It’s been enough to convince automakers and battery companies to commit nearly $300 billion to building a raft of gigafactories around the world, including more than $38 billion here in the U.S. alone. That confidence has cascaded through the market, driving waves of investment that have resulted in over $42 billion in venture and private equity capital committed to battery research, development, commercialization and manufacturing.
For battery startups like Michigan-based Our Next Energy, betting it all on the automotive market, which is notoriously fickle, can be a risky proposition. Demand for cars and trucks often craters when the economy tumbles. EV sales have been historically tied to an even more volatile indicator: gas prices. As COVID showed, just a few ripples in the automotive supply chain can send shockwaves through the market. The automotive market has a lot of volume, sure, but that doesn’t make up for the fact that margins are typically thin.
As investments go, the automotive sector doesn’t seem like a great place to make massive, long-term bets like the kind required for gigafactories.
And yet the money keeps flowing, and companies like ONE and its investors are increasingly confident that this round of climate tech investments will turn out very differently from the last. What’s behind that bravado?
Why so many gigafactories? It’s not just EVs driving demand by Tim De Chant originally published on TechCrunch
After a decade of keeping its North American charging network closed to outsiders, Tesla appears poised to allow other electric vehicles to use its Superchargers.
The White House announced on Wednesday that the company would open 7,500 chargers — including 3,500 250 kW stalls along highways — to any EV with the combined charging system (CCS), the standard broadly used in the U.S. (The company has vowed to do something similar before, so maybe don’t hold your breath just yet, though this new Biden administration fact sheet has some hard numbers, which were notably absent last year.) The first bricks in the EV charger wall should rattle loose by the end of 2024.
If Tesla follows through — again, a big “if” given the company’s preference for splashy announcements and optimistic timelines — it could usher in a sea change in EV charging infrastructure in the U.S.
Today, Electrify America, the closest competitor, has about 3,500 fast chargers. If Tesla were to make the change overnight, it would double the number of fast-charging stalls.
Tesla’s main motivator, of course, is getting a piece of the $7.5 billion EV charging pie that’s part of the Bipartisan Infrastructure Law. While opening a portion of the Supercharger network will help the automaker’s bottom line courtesy of the government, the move will also have some knock-on effects that are likely to upend EV charging in the U.S. Here are a few ways those could unfurl.
The cynical take is that Tesla is simply going to use federal money to put even more distance between itself and its competitors. It’s possible, even likely, that the company will use the new funding to add new stalls to its already enviable network.
Tesla opening its Superchargers to all EVs might be a masterstroke — or a terrible mistake by Tim De Chant originally published on TechCrunch
Nobody starts a hardware company with the express goal of destroying as much of the planet as they possibly can. Walking around the startup hall at CES, however, I noticed that — with a few notable exceptions — there was painfully little attention given to material choice, repairability, ease of disassembly and considerations around the end of usable life.
It’s embarrassing, really — but as someone who used to run a hardware startup, I know it can be hard to prioritize when you have limited time and resources. However, if you can’t make planet-friendly choices as the founder of a startup, when the buck literally stops with you, when can you?
In an effort to figure out how you can create greener hardware, we spoke with Lauryn Menard, a professor at the California College of the Arts, where she teaches the future of biodesign. She’s also an adviser to Women in Design SF and the co-founder and creative director at PROWL Studio, an Oakland, California-based design and material futures consultancy focusing on sustainable solutions.
“As a startup, you have choices. The thing is, it’s such a capitalistic society we live in, and a lot of decisions are made based on time and money,” Menard explained. The startups want to think about sustainability, but they are moving at breakneck speed and trying to get a product to market as soon as possible. “The startups need to hit their target price point and all that good stuff.”
“You don’t have to adopt a new bioplastic, you can instead choose something that already exists: Not everything has to be made from a new freaking material!” Lauryn Menard
But there are some big things moving out there in the market. Consumer demands are shifting, and climate pledges, circularity strategies and environmental questions are all bubbling to the surface. It’s hard to say whether enough customers are making purchasing decisions based on a company’s green credentials to move the needle meaningfully, but product development cycles can take years, and who knows what the landscape looks like by the time your product makes it to market? To some companies, it might make sense to take the risk, but other founders are starting to think differently about how products are made.
“If a startup is being run by solely engineers, that can be problematic: Engineers tend to be worried [about] making sure they’re getting to the finish line. They put all of their energy into making something function and are probably leaning toward materials, ways of making and manufacturing processes that they’re already familiar with,” Menard explained. “What we’ve seen [be] really helpful is working with a design studio that specializes in more sustainable ways of thinking and healthier materials. Or partnering with someone like a materials library, so they’ve already started thinking about the functionality of the materials by the time they are making a prototype. Just in the same way that it takes a really long time to get an MVP product that works and looks the way you want, it sometimes takes a long time to put a new material into an existing manufacturing process.”
One of the big challenges we have with creating more sustainable products is that we are often replacing plastics with something else. The problem is that plastics are deeply embedded in workflows already. Product designers love how predictable, easy to design and repeatable plastic is.
There also isn’t an obvious one-for-one replacement for plastic; depending on the use case and material properties you need, you may have to replace it with wool, paper, wood, plant pulp, carbon fiber, seaweed, hemp, mycelium, lab-grown leather or any number of other materials that are available.
Here’s what founders and product designers can do to think about sustainability and product development in a more conscious way.
Startups, here’s how you can make hardware without ruining the planet by Haje Jan Kamps originally published on TechCrunch
Buy an electric car. Invest in a heat pump. Install an induction stove. They’re all measures that people can take to reduce their daily carbon emissions, and they’re all pretty significant cash outlays.
Over the next three decades, as the world lurches toward net zero emissions, expenditures like these will be unavoidable. For many people, they’ll happen when its time to swap out a car or when the old stove dies. Others will want to move more quickly. But no matter what, the experience can give a person sticker shock.
In the long run, though, many of those expenses can save people money. EVs are cheaper to own and operate after several years despite higher upfront costs. Induction stoves and heat pumps may cost more than natural gas equivalents, but they allow people to eliminate the monthly expense of a gas hookup.
Now, fintech startup Future wants to tip the scales further, TechCrunch has exclusively learned. The Techstars Boston alum currently offers a debit card that incentivizes climate-friendly purchasing behavior, and today it’s introducing a way to let people sell their own carbon credits.
Buying an EV? Switching to induction? Installing solar? A different reduction that’s similarly verifiable? FutureCoins will let people track each metric ton of carbon they save and either sell it or retire it (meaning no one can use it to offset their emissions). The coins, which will be tracked on a to-be-determined public blockchain, will sell at an initial price of $90 per metric ton.
“Part of what we want to do is make it crystal clear to consumers that carbon has a price. It’s valuable,” co-founder at CEO Jean-Louis Warnholz told TechCrunch. “Every action that you take — and you don’t see it — but somebody is paying that price. The price is external, and we’re basically bringing it front and center to consumers to inform everyday decisions.”
Warnholz was inspired to start Future when he was thinking about how to reduce his household’s carbon emissions. The easiest and most obvious answer would be to buy offsets, which are most often tree-planting schemes. He quickly soured on the idea, though.
“I realized that I could either figure out how to credibly plant over 7,000 trees and make sure that they thrive, they don’t burn and they don’t get cut down. Or I could just take decisive steps to reduce my carbon footprint and save money at the same time.”
He chose the latter. He bought an EV, installed solar panels and started buying devices, clothing and more secondhand.
Want to buy an EV or heat pump? New coin will help you defray the costs by Tim De Chant originally published on TechCrunch
Toyota’s president, Akio Toyoda, surprised the automotive world this week by announcing he would resign his position and hand the reins over to Koji Sato, who currently helms the company’s Lexus and Gazoo Racing divisions.
But Toyoda isn’t going far. The 66-year-old isn’t retiring outright, but instead retiring to the boardroom, where he’ll take over the role of chair.
Insiders aren’t expecting Toyoda to be hands-off, either. One executive said that Toyoda was about to embark on a period of “cloister rule,” a period in Japan’s history where the emperor retired to a monastery without actually ceding power.
If that’s the case, then the shakeup in Toyota City might not be much of a shakeup at all.
Toyota’s surprise executive shakeup may disappoint investors by Tim De Chant originally published on TechCrunch
Here comes the hockey stick.
After years of bumbling along, investment in the energy transition appears to be taking off. Businesses, financial institutions, governments and end users around the world sunk $1.11 trillion into low-carbon technologies, according to a new report from BloombergNEF. It was just over 30% more than 2021 and the second year in a row in which the growth rate exceeded that figure.
Perhaps more notable is the fact that for the first time ever, money put into the energy transition matched funds spent on fossil fuel investments. If you count the $274 billion spent on improving the electrical grid, then energy transition investments shot well past the fossil fuel fossils, hitting $1.38 trillion.
Over the last two decades, most low-carbon investments were targeted at renewables, including wind, solar and biofuels. They hit another record last year with $495 billion invested, up 17% from 2021. But in recent years, money has also been flowing into more diversified sectors, including energy storage, space heating, sustainable materials and electrified transport.
Last year was no exception. Investments into electrified transport — think EVs and charging networks — grew a whopping 54% in 2022 to $466 billion. Hydrogen, which is often uttered in the same breath as battery-electric vehicles, contributed $1.1 billion toward the trillion-dollar total. While that figure may seem small, it’s triple the amount the sector received in 2021. Overall, investment was balanced between supply (energy production and storage) and demand (energy users like transportation, heat and sustainable materials).
Most of the money has come from China. The country accounted for about half the total, $546 billion. The U.S. was second with $141 billion, and Germany was third with $55 billion. If the entire EU is lumped together, the bloc would have taken second place with $180 billion.
In particular, China dominates in areas like manufacturing capacity and supply chain development. Last year it spent heavily on electrified transportation and renewables like solar and wind. Given that combination, it’s possible that we’ll see Chinese solar panels flood the market once more, though this time they’ll be accompanied by cheap batteries. Inexpensive solar paired with cheap batteries is what’ll be needed to kick significant amounts of fossil energy from the grid.
If there was a dim spot, it was global equity and private investment in climate tech. Those numbers were down 29% to $119 billion. That should come as no surprise; 2021 was a crazy year for venture capital and private equity.
Energy transition investments hit $1.1 trillion — with a T — last year by Tim De Chant originally published on TechCrunch
Chances are you used a toilet at some point today, and you didn’t think much of it.
But if you used a port-a-potty, you probably did think about it. Maybe a lot. And it probably wasn’t pleasant.
“No one likes the port-a-potty,” said Brophy Tyree, co-founder and CEO of Wasted. “It’s embedded into a really antiquated operations and servicing industry and so there’s a chance to make all of that better.”
But Tyree, along with co-founders Thor Retzlaff and Taylor Zehren, wants to do more than just redesign the smelly plastic boxes. The company’s first order of business is to turn the waste from port-a-potties into fertilizers for farmers.
“Farmers have been applying manure and other forms of animal waste to farms for millennia,” Tyree said. “When you talk to a farmer, they completely understand the value proposition right away. You don’t need to educate them on the fact that what’s coming through our body is valuable and has nutrients, because that’s just the water that they swim in.”
Human waste contains plenty of nutrients, but urine appears to be the real gold mine. Urine contains a lot of nitrogen, phosphorus and potassium, and wastewater in cities contains enough of the nutrients to offset around 13% of global fertilizer demand, according to one study.
Today, human waste is used as a fertilizer in some places. King County in Washington sells a biosolids soil amendment to farmers and foresters, for instance, and Milwaukee sells Milorganite to farmers and homeowners. They’re excellent examples of the reuse of human waste, but those products emerge at the end of a traditional sewage treatment process, which is energy intensive and vulnerable to severe storms and flooding.
Wasted wants to eventually serve as a backup for traditional sewage systems or even a replacement, particularly in regions where sanitation systems are underdeveloped. But it’s starting with port-a-potties for a few reasons.
We flush valuable nutrients down the toilet. Wasted wants to save them by Tim De Chant originally published on TechCrunch
Like nearly every other sector, deep tech faced significant headwinds in 2022. As interest rates skyrocketed, deep tech deals, which inherently take more capital than other kinds of software businesses, became less attractive to many VCs and their LPs than lower-risk investments.
For instance, even though quantum computing suddenly became popular in the public markets as D-Wave, Rigetti and IonQ listed in the last year, private investment declined significantly — the sector received just over $600 million in venture capital in 2022, down from $800 million in 2021, according to Crunchbase.
Seasoned investors and operators in different segments of deep tech have been adapting to these changes in real time as the cheap money days dwindle in the rearview. For instance, in this environment, space tech startups would never have been able to raise the kind of money they did in 2021 to be able to deploy the technologies they’re working on today. As Delian Asparouhov, a principal at Founders Fund and the founder of Varda Space Industries, shared last month, it would be impossible to raise the $42 million his startup did in 2021 for its space factory “idea” in today’s market climate.
While some investors will continue to sit on the sidelines as we kick off 2023, it’s important to note that many funds are still sitting on amounts of dry powder like they’ve never had before. That doesn’t mean they or their LPs will be in a rush to deploy that capital, but money will be available to startups that can demonstrate current demand and are realistic about their valuations. As it becomes increasingly difficult to realize big exits in the years ahead, the technologies within deep tech that are transforming entire industries offer some of the only paths to “10x exits.”
These are positive signs for deep tech founders preparing to raise money this year. Another positive note is that some of the logic driving VCs to stay away from deep tech startups in down markets may be unfounded. Our team recently analyzed recent deep tech unicorns to understand how much money it took for them to get to the $1 billion mark. The results reinforced what we knew from experience: Deep tech startups’ capital and time requirements are on par with companies in other sectors. In fact, the median deep tech startup took $115 million and 5.2 years to become a unicorn.
While the space economy will continue to provide numerous opportunities to invest in atoms, there will also be an opportunity to invest in the bits moving atoms across our skies.
With that as a backdrop, let’s look at a few areas where deep tech will find interest from investors in 2023.
While Delian noted correctly that funding for long-term “moon shots” will be tough to find in the current market, I still believe investors will look for startups that are closer to commercialization in the sector. To date, 99% of the total investment in the space tech market has gone to the satellite and launch industries. Now is the time to focus on moving objects around in space rather than just getting them there.
For instance, investors are increasingly interested in solutions that tackle astrodynamics or propulsion to guide the motion of satellites and other spacecraft — for example, AI startups working on ways to simulate scenarios and generate maneuver plans for operators so they can avoid space collisions. Investors are also interested in future machine learning and neural networks use cases for astrodynamics, such as orbit predictions and spacecraft flight modeling.
Space missions also call for hardened software and hardware. As we look toward edge solutions for space-bound vehicles and objects, startups that can create radiation-safe applications will be in demand. So while the space economy will continue to provide numerous opportunities to invest in atoms, there will also be an opportunity to invest in the bits moving atoms across our skies.
Software alone will never solve the multitude of issues contributing to our climate crisis. Hardware solutions and engineering-led innovations in deep tech are needed to solve our most significant climate challenges.
A VC’s perspective on deep tech fundraising in Q1 2023 by Ram Iyer originally published on TechCrunch
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