🌎 Breakthrough catalyzes climate deployment #72

Bill Gates’ climate empire spans VC, media, impact ratings, and now project finance

Happy Monday! 

In this week’s issue, we cover the alignment, deployment, and standard setting of Breakthrough Energy’s myriad approaches to “getting to zero.” In an impressive half decade, they’ve become the most active climate venture investor while rallying corporates, media, and research towards their ambitions. 

Three $100m+ deals this week include lithium extraction, solar cars, and a marketplace for ESG commodities. We also share news on Biden’s new annual $11.4b climate aid package to developing nations, SEC’s new climate-related notice letters, and Shell spinning off the first of their large oil assets to Conoco. Plus some stellar climate VC jobs!

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Reacting to Breakthrough’s Catalyst

Bill Gates founded Breakthrough Energy in 2015. Half a decade later, the Breakthrough umbrella organization houses several initiatives accelerating a sustainable future.

📈 The flagship VC fund. The $1b+ Breakthrough Energy Ventures fund is the most active climate venture investor of the past 18 months, according to our deals data

📰 A news outlet. Cipher, led by the talented Amy Harder, is a dedicated journalism platform for climate crisis coverage

🔬 A fellowship program. The Fellows program supports innovators and business people in commercializing critical climate technologies with the potential for 500m tons / year CO2e reduction by 2050

⚖️ An impact rating system. The Emerging Climate Technology Framework, developed with CDP, quantifies the climate value of tech investments

And now… 

🚀 A deployment-focused fund. Breakthrough Energy Catalyst is a public-private blended finance facility focused on accelerating deployment of commercial climate technologies in direct air capture, green hydrogen, long duration energy storage, and sustainable aviation fuel. Catalyst deploys financing for projects, not companies, and doesn’t compete with venture capital on the cap table [we chatted about project finance with Generate Capital]. The program is designed to reduce the “Green Premium” – the difference between the price of a carbon-emitting technology and its clean alternative - with a focus on speed. 

Microsoft donated $100m alongside six anchor corporations – American Airlines, ArcelorMittal, Bank of America, The BlackRock Foundation, Boston Consulting Group, and General Motors. The European Commission has also partnered with Catalyst to mobilize $1B over the next five years to build large-scale, commercial demonstration projects. The request for information (RFI) is seeking proven technologies at lab scale (TRL 5) and is open for submissions until Oct 20th, after which the RFP will open.

Our “reactions” (🧪💥😉)

  • To state the obvious, BE is possibly the most influential single actor in private climate capital. Similarly, Microsoft wields a heavy hammer across “customer, investor, donor.”

  • BE’s influence comes from the power of convening. Besides the impressive corporate representation from across key emissions sectors, partnering with the EU Commissioner demonstrates real pull. Even more impressive, it’s more than a coalition, there’s actual capital beyond their signatures.

  • Much of the action that we track in CTVC is (relatively) small dollars into company-level investment into climate innovation. Catalyst signals that there’s rising enthusiasm from philanthropists, governments, and companies (not LPs - yet) for mega capital commitments into project-level deployment.

  • Companies are now willing to be early customers for first of a kind projects, so long as standards are set and funds are backstopped. 

  • Breakthrough sets the terms for which climate technologies to accelerate, with their rallying cry across green H2, DAC, SAFs, and long-duration storage - though, we need everything.

  • Frontiers in climate tech don’t stay as edge cases for long. Big funds with large AUM should take note of the direction that BE pointed the flag in, and prepare to follow on in subsequent (de-risked) financing.


Deals of the Week (9/20-9/26)

🔋 Lilac Solutions, a lithium extraction technology company, raised $150m in Series B funding from Lowercarbon Capital, T. Rowe Price Associates, Mercuria Energy Trading, Valor Equity Partners, Breakthrough Energy Ventures, and The Engine.

🚗 Lightyear, a Netherlands-based startup developing electric solar cars, raised $110m in funding from Cooperation DELA and Joop van Caldenborgh. 

💵 Xpansiv, a global marketplace for ESG commodities, raised $100m in pre-IPO funding from Clean Energy Finance, Commonwealth Bank of Australia, Hartree Partners, and Wilson Asset Management. 

🥩 Eat Just’s GOOD Meat division, a San Francisco, CA-based maker of cultured meats, raised an additional $97m in funding from UBS O’Connor, Graphene Ventures K3 Ventures, Resilience Reserve, and others. 

Zola Electric, a Netherlands-based solar energy installer focused on sub-Saharan Africa, raised $90m in funding from TotalEnergies Ventures, DBL Partners, Helios Investment Partners, Vulcan Capital, and Electron Capital Partners. 

Battery Resourcers, a Worcester, MA-based startup developing a closed loop approach to lithium-ion battery materials, raised $70m in funding from Hitachi Ventures, Orbia Ventures, Jaguar Land Rover, Doral Energy, At One Ventures, and TDK Ventures. 

🥛 Ripple Foods, a Berkeley, CA-based plant-based dairy alternative, raised $60m in Series E funding from Rage Capital, Ajax Strategies, S2G Ventures, OurCrowd, GV, Prelude Ventures, Euclidian, Fall Line Capital, and Tao Capital Partners.

🚜 Iron Ox, a San Carlos, CA-based automated farming startup, raised $53m in Series C funding from Breakthrough Energy Ventures, Crosslink Capital, R7 Partners, Pathbreaker Ventures, I/O Ventures, Amplify Partners, ENIAC, Tuesday Ventures, At One Ventures, and Y Combinator. 

🚚 Volta Trucks, a Sweden-based electric delivery truck producer, raised $44m in Series B funding from Luxor Capital Group, Byggmästare Anders J Ahlström Holding, Proterra, and Agility.

🌱 Blue White Robotics, a Israel-based agriculture robotics company, raised $37m in Series B funding from Insight Partners, Entrée Capital, Clal Insurance, Peregrine VC, and Regah Ventures.

☀️ Omnidian, a Seattle, WA-based provider of solar performance guarantees, raised $33m in Series B funding from Activate Capital, Liberty Mutual, Copec, City Light Capital, IA Capital, Evergy Ventures, Avista Development, Congruent Ventures, Centrica, National Grid Partners, Energy Foundry, and Blue Bear Capital. 

🍓 Advanced Farm Technologies, a Davis, CA-based maker of strawberry-picking robots, raised $25m in Series B funding from Catapult Ventures, Kubota, Yamaha Motors, and Impact Ventures. 

⚡ Hydrogenious, a Germany-based hydrogen storage startup, raised $17.6m in funding from JERA Americas, Temasek, Chevron Technology Ventures, and Pavilion Capital. 

⚡ Focused Energy, a Germany and Texas-based laser fusion startup focused on alternative energy, raised $15m in Seed funding from Prime Movers Lab, Alex Rodriguez, and others.

🌱 EarthOptics, an Arlington, VA-based soil sensing startup, raised $10.3m in Series A funding from Leaps by Bayer, S2G Ventures, FHB Ventures, VTC Ventures, and Route 66 Ventures.

👖 Unspun, a San Francisco, CA-based robotic manufacturing startup eliminating waste in jeans production, raised $7.5m in Seed funding from Josh Buckley, Fifty Years, Rarebreed, Apex Black, AVG, 8 Sleep, SOSV, and Superhuman.

🍣 Sophie’s Kitchen, a Sebastopol, CA-based maker of plant-based seafood, raised $5.6m in funding from Billy Goat Brands. 

♻️ Recycleye, a UK-based maker of recycling robots, raised $4.7m in Seed funding from Promus Ventures, Playfair Capital, Creator Fund, and MMC. 

🌱 Agtonomy, a San Francisco, CA-based hybrid autonomous agtech company, raised $4m in Seed funding from Grit Ventures, GV, and Village Global.

💨 Climatiq, a Germany-based carbon footprint startup, raised $2m in pre-Seed funding from Cherry Ventures and angel investors.

⚡ Electric Hydrogen, a Boston, MA-based startup developer of a green hydrogen electrolyzer, raised an undisclosed amount of funding from Energy Impact Partners. 

Exits & New Funds:

Fifth Wall announced its Climate Tech Fund raised over $140m from major real estate players. 

Blue Bear Capital raised $150m for its second fund focused on AI-powered solutions for energy, infrastructure and climate. 


In the News

Leading up to the COP26, Xi Jinping announced that China, the largest funder of coal projects, will stop constructing coal power plants abroad and tighten its leash on industrial manufacturing emissions. 

Meanwhile, President Biden said he would increase climate aid for developing nations to $11.4b a year by 2024 in a move to quell mounting anger at richer nations who previously committed $100 billion a year to help developing countries address climate change.

Following through on its proposal in May, the EPA issued the final rule on reducing HFCs by 85% within 15 years, roughly equivalent to 4.6B metric tons of CO2 by 2050 and more than 10x what the state of California produced last year. 

The Biden Administration launched new labor standards at OSHA aimed at shielding those exposed to extreme heat - the main climate-related cause of death in the US. To find innovative solutions, the Department of Homeland Security announced its first national contest focused on climate resilience with a total of $195,000 in cash prizes.

European gas prices soared to all time highs - 5x compared to a year ago - driven by tight supply and increased demand from post-pandemic recovery and cold temperatures. Critics blamed the EU’s increasingly ambitious climate goals for exposing vulnerable energy markets, with the IEA quick to issue a defense

England is the first country to require newly-built homes to include an electric vehicle charger, which are designed to be flexible and integrate with the grid to schedule charges during off-peak hours.

Amazon added 86 new signatories to its “Climate Pledge”, making up 200+ brands, including Proctor & Gamble, Microsoft, and Coca-Cola, signing on to net-zero commitments with the combined potential to cut emissions by 2B metric tons of CO2 by 2040. 

In more corporate net zero news, Salesforce announced that it’s achieved “net zero” across its entire value chain, while compensating for remaining emissions through carbon credits. Salesforce is also leveraging its new Slack purchase to develop sustainability tools for collaborating with suppliers. 

The SEC is notifying who’s on the naughty list ahead of the holidays, sending letters to dozens of public companies in industries like agriculture, oil and gas, banking, real estate and trucking to request climate-related disclosures.

In another game of hot potato, Shell sold its Permian Basin assets for $9.5bn to ConocoPhillips, returning three quarters of the proceeds back to shareholders through buybacks instead of investing for the energy transition. 


Pop-up

Bloomberg beautifully visualizes the material shifts in the complex commodity supply chains of the crucial metals needed for the energy transition to solar panels, wind turbines, lithium-ion batteries, and EV chargers.

A new Norwegian design for offshore wind to power 80k homes looks appropriately Scandinavian minimalist chic. 

Survey respondents say it’s different to drive an EV, than to own one. A Berkeley economist finds that 89% of EV-owning households also have at least one fossil-fueled model - and 66% of those households drive their ICE more than their EV.

The Mr. Burns test for climate technologies is evolving - are you a Survivor?

PitchBook’s 2021 Sustainable Investment Survey finds that VCs are less likely to utilize an ESG risk framework than non-VC investors. Also, everyone’s worried about impact measurement. 

Climate scientists discuss the shortcomings and opportunities of AI in climate science research. 

Urban-X announced its 10th cohort of urban technology startups, including: Climatebase, LimeLoop, Partsimony, Phuc Labs, and Plentify.

You can’t manage what you don’t measure. Africa has one-eighth the minimum density of weather stations, leaving the continent mostly off the map for modeling climate risk and in the dark for early-warning systems.

Eight of the late night talk show hosts spotlight their hot takes on climate change as part of Climate Week.

Our kids are definitely not alright. In a large survey of 10,000 young people across 10 countries, nearly half of all children report that climate anxiety impacts their daily lives.


Opportunities & Events:

💡 VC Include Climate Justice Initiative: All diverse-led climate funds committed to climate solutions affecting climate-impacted Black & Brown communities should apply through Oct 25th.

🗓️ Future Impact: The Solar Century: Join SJF Ventures on Sept 30th for a conversation on solar energy’s transition to the primary source of global energy this century. Panelists include experts from PosiGen, Community Energy, Terabase Energy, and Nextracker.

🗓️ SOSV Climate Tech Summit: Join on Oct 21st and 22nd for a convention of the climate tech startup ecosystem of founders, investors, technologists, corporates, policymakers and media to discuss the extreme challenges ahead.


Jobs

Senior Analyst @Earthshot Ventures

Research Analyst @DCVC

Associate, Private Credit Funds @Closed Loop Partners

Finance Associate @TeraWatt Infrastructure

Venture Science Associate @Build a Climate Startup

Product Manager, Energy & Sustainability @C3.ai

Product Manager, Charging Systems @Volta Charging

Hydrogen Storage Engineer @Verne

Head of Hydrogen Storage @Verne

VP of Business Development @Modern Electron

US & LatAm Head of Commercial and Operations @Biome Makers

More climate jobs, please!


Feel free to 📩 send us new ideas, recent fundings, or general curiosities. Have a great week ahead!