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Whither Climate Tech? a New Fund, Plus Some Predictions

Claudia Baldwin



This article was adapted from Climate Tech Weekly, a free newsletter focused on climate technologies.

Energy Impact Partners (EIP) is best-known for its investments in technologies meant to accelerate the integration of clean energy into the grid, including cybersecurity. Now the investment firm — backed by a who’s-who of utilities, as well as the venture arms of corporations including Microsoft and construction firm Burns & McDonnell — is targeting early-stage, climate tech startups through a new fund led by energy transition guru and futurist Shayle Kann.

The Deep Decarbonization Frontier Fund has already received commitments of more than $200 million on its way to $350 million, according to a press release issued by EIP last week. “We are looking for audacious entrepreneurs taking big swings at big problems in climate tech,” wrote Kann. “Over the last six years, we have built an ecosystem and process to drive innovation in massive, mature and technically complex industries; nowhere is this skillset needed more than the drive toward deep carbonization.”

For the purposes of this fund, Kann’s thesis for “deep decarbonization” centers on five goals, outlined in an interview with the Climate Tech VC newsletter. (Quoting these verbatim.)

Achieve low-cost, abundant, reliable, ubiquitous zero-carbon electricity
Tackle the biggest industrial emitters
Solve transportation
Build a carbon management industry from near-scratch
Decarbonize Maslow’s basic needs

No pressure, right? This is actually a refined version of the “grand challenges of deep decarbonization” list that Kann, a long-time market analyst who built the Greentech Media Research division, published last fall. Aside from Kann, the fund recently added three new team members: Investment Partner Ashwin Shashindranath (previously with financial services firm Macquarie), Director of Technology Gregory Thiel (formerly with ARPA-E) and Chief Technology Officer Michael E. Webber (former CTO and CSO of Engie).

The Frontier Fund actually made its first investment “more than a year ago” in a battery technology startup in Somerville, Massachusetts, Form Energy, which is working on multi-day energy storage for the electricity grid. Other startups that have already received investments by the fund include: Electric Hydrogen, working on renewable-powered hydrogen production; Nitricity, developing zero-emissions nitrogen fertilizer; Carbon America, a point source carbon capture play; Zap Energy, an “economic” nuclear fusion play; Sublime Systems, a zero-carbon cement manufacturer; and Boston Metal, which processes steel from “electricity, not coal.”

If you’re keeping score, you’ll notice that the fund’s disclosed list doesn’t currently include anything to do with transportation and mobility. In the Climate Tech VC interview, Kann talks up the need to get over some of the biggest barriers to electrification: range; charge time; user experience; and minerals shortages. He’s also thinking about “mode-changing” innovations. Some questions to ponder, he suggests: “Should we ship goods over oceans via smaller hydrofoils? Should we replace coastal trips with electric sea planes? Can we re-engineer cargo logistics to minimize truck miles? Are eVTOLS a realistic climate solution?” (That last acronym is shorthand for electric vertical takeoff and landing. Yeah, I know.)

Consult your Magic 8-Ball

What else are climate tech investors pondering for the year ahead? That was the convening force for a thought-provoking webcast last week hosted by nonprofit climate tech investor Evergreen Climate Innovations, formerly Clean Energy Trust.

The session included Kann, Evergreen Managing Director Paul Seidler, Azolla Ventures General Partner Johanna Wolfson and Urban Us Partner Shilpi Kumar. The host made a big show of advising viewers not to make investment decisions based on the commentary, but a number of themes really resonated with me.

SPACs face a comeuppance. Kann pointed out that of the several dozen startups that used special purpose acquisitions corporations to make an initial public offering, last week there were just six trading above $10 per share (a typical price for many of these offerings). There are still quite a few SPACs hunting for potential transactions — and there will be a second wave as those “licenses to hunt” expire after two years. Generally speaking, by the way, climate tech stocks haven’t fared well during the recent sell-off. An EIP index that tracks about 40 high-profile companies is off 13 percent since the beginning of the year.
Watch this space. Where will all those general funds and private equity funds that jumped into climate tech last year put their money? There needs to be more focus on backing early-stage “hard tech” rather than the capital-light investments that those funds typically favor, suggests Wolfson. Azolla, created by Prime Coalition, is focused on catalytic investments that require patience over the long term. Many of its investments are focused on pioneering new materials, such as Lilac Solutions, Twelve and Mallina.
Expect a wave of excitement linking Web 3.0 and climate tech. Remember all those blockchain energy ventures from a few years back? Get ready for another wave of activity at the intersection between climate tech ventures and emerging expressions of the web focused on creating more decentralized versions of applications where people have more control over their own data. This could be particularly important for the rise of carbon markets, which rely on trusted information to work effectively. It seems a longshot at this moment, but given how important digitalization will be for the internal corporate adoption of carbon accounting and management, something’s gotta give and I’m sure my inbox is about to be flooded with news of crypto and non-fungible tokens (NFTs).
We’re living in a material world. One thread weaving throughout the discussion — mentioned by all of the investors — was about the potential impact of ventures focused on decarbonizing materials and resource extraction, processes that are at the center of every industrial decarbonization challenge. “The highest impact climate-related sector is not energy or EVs or decarbonized aviation, it is advanced materials,” observed Seidler.

I’m not an investor, so I won’t use that prediction in any kind of financial way but I wholeheartedly agree with that assessment and it will definitely inform my coverage. Where are you betting in 2022? Share your ideas via email to [email protected].

Editor’s note: This article was updated to clarify the positioning of Evergreen.

[Want more great analysis of climate tech and innovation? Sign up for Climate Tech Weekly, our free email newsletter.]

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Is Climate Tech the Hottest Corner of the VC Business in the 2020s?

Claudia Baldwin



This is an excerpt from “Climatenomics: Washington, Wall Street, and the Economic Battle to Save Our Planet” (Rowman & Littlefield, 2022). Reprinted by permission of the publisher.

While government policies and leadership from Washington can help accelerate change, there’s another place that can accelerate change much faster: Silicon Valley.

In 2003, as a national technology reporter for a chain of newspapers, I visited the Mountain View, California campus of Google to meet with cofounder Sergey Brin. At the time, Google was still a private company, though there was widespread speculation that it would launch an initial public offering soon. The moment I pulled into the company parking lot, I got a taste that Google wasn’t a typical company. Covering many of the parking spaces were canopies made from solar panels, something that’s commonplace today but back then was pretty unusual. Even more unusual were the thick power cords hanging down from the panels over nearly every parking space, something that didn’t make sense until Brin and team later explained it to me. At the time, electric vehicles were even more uncommon than solar parking lot canopies (the first Tesla wouldn’t hit the streets for another five years). But Google knew EVs were coming someday soon, and it wanted to be ready. Google also wanted employees and other visitors to think about the possibilities that could come with solar-powered parking lots and cars that you could plug in to refuel.

Two of the forward-thinking people responsible for Google’s early solar deployment were Chris Sacca, who as the company’s corporate counsel and later head of special initiatives was involved in Google’s energy purchase agreements, and Andrew Beebe, who was chief commercial officer at solar company Suntech, which helped Google go solar.

“There really wasn’t any corporate interest until those guys stepped up and said, ‘Please build solar arrays all over our campus,'” Beebe recalled during a GreenBiz VERGE [climate] tech conference in October 2021. “But (Google executives) also said, ‘Set it up so we can have Walmart and Cisco and Microsoft and all of our competitors come over and see what we have done.’ They obviously had a hugely catalytic role in making all this happen.”

Both Beebe and Sacca would go on to become successful venture capitalists, Beebe with Obvious Ventures, the firm that helped launch companies such as Medium, Beyond Meat and electric bus maker Proterra, and Sacca with his firm called Lowercase Capital, which funded companies such as Twitter, Uber and Instagram. For about three years, Sacca also was a “guest shark” on the ABC television show “Shark Tank,” where budding entrepreneurs bid for the favor — and the funding — of millionaire investors. But it didn’t take long before Sacca was feeling unfulfilled by funding kitchen gadget start-ups on “Shark Tank” or electronic-gaming companies back in Silicon Valley. He, like Beebe, turned his attention almost fully toward clean-energy and climate-related investments.

Sacca and Beebe represent one of the hottest corners of the venture capital business in the 2020s: climate tech. Some of the companies that investors like them are backing today will likely become the Googles of tomorrow. Only instead of changing the way we search for stuff on the Internet, climate tech companies will change the way we source and store our energy, grow our food, and move from point A to point B, whether on land, water, or air. In doing so, they’ll not only transform our economy, but help save the planet.

In 2021, investments in climate tech companies hit more $31 billion, according to deal tracking firm PitchBook. That was 30 percent more than in 2020 and more than 2.5 times what it was in 2019. Those big numbers will likely only get bigger as federal, state and international clean climate and clean-energy policies are implemented. Quite simply, government policies and funding help reassure venture capitalists and other private investors to put more of their money at risk.

In 2021, investments in climate tech companies hit more $31 billion, according to deal tracking firm PitchBook.

Climate-tech and clean-tech investing is no longer just about solar or wind or even batteries anymore. Those businesses now attract plenty of mainstream investors. They’re almost like investing in restaurants or real estate — they’re too passe for venture capitalists who are more interested in finding more disruptive technologies that can scale quickly and create big returns.

“What we look at every day are energy innovations that are just insane, some of which are doing things that Einstein declared literally would not be possible,” Sacca said at the VERGE conference. “We see stuff happening in synthetic biology, for instance, that’s just nuts.”

Amid the hellish fires in the West, back-to-back hurricanes in the East and scientists everywhere warning that things were only going to get worse, Sacca in August 2021 stepped away from Lowercase Capital, quit “Shark Tank,” and with wife Crystal turned his attention specifically toward figuring out how to fund and support companies trying to do more to address climate change. The couple launched a new investment fund called Lowercarbon Capital. In a matter of days, they raised more than $800 million that Lowercarbon Capital could deploy to try to “un— the planet,” in Sacca’s terms. The fund was so popular, Sacca wrote on Lowercarbon Capital’s blog, that it had to turn investors away. “It turns out that raising for a climate fund in the context of an unprecedented heatwave and from behind the thick clouds of fire smoke probably didn’t hurt,” he wrote.

Since then, Lowercarbon has invested in companies that capture carbon dioxide and turn it into consumer products, reduce carbon emissions from livestock and fertilizers on the farm, and mine materials that are key to batteries and storage in ways that don’t destroy the environment. One such company is Twelve, a Bay Area start-up that “upcycles” carbon dioxide captured from industrial emissions and turns it into everything from jet fuel to sunglasses lenses, replacing fossil fuels and plastic. Another company Sacca was particularly excited about in 2021 was Lilac Solutions, which has raised $150 million to commercialize its lithium-mining technology. Lilac claims it can produce the essential element for batteries 10,000 times faster than conventional methods, using 90 percent less land and water. Lowercarbon Capital has also made numerous major investments in companies at the intersection of agriculture and climate, including start-up Formo, which is following the Beyond Meat and Impossible Burger model to make fine European cheeses that don’t require dairy or cows; Entocycle, which has figured out how to speed up the gestation period for black soldier fly larvae which happen to be some of the world’s fastest converters of food waste to protein; and Nitricity, which uses solar-powered modules placed around farms to literally make fertilizer out of thin air by converting and processing nitrates found in the atmosphere.

If garbage-eating fly larvae and fine cheeses bioengineered in a sterile laboratory don’t sound like appealing business models, think again. According to research group Climate Tech VC, food-and-water-related climate tech was the biggest sector for climate venture funding in 2021, followed by mobility, consumer goods, and clean energy. Tech investors’ take on food and agriculture is yielding new high-tech twists in one of the world’s oldest and most established economic sectors. Seattle-based clean-agriculture start-up Nori, for instance, got its start in 2017 when its cofounders entered a hackathon contest for coders to figure out new ways to use blockchain technology for social good. Far from the nearest farm, what they came up with was a way to use blockchain technology to monitor and track low-carbon agriculture practices and then monetize that by selling farm-based carbon-removal offsets.

In doing so, Nori is incentivizing farmers to use more climate-friendly agriculture practices that don’t just reduce carbon emissions but actually increase the ability of soil and crops to store carbon, while also creating a new marketplace for carbon removal and trading. In 2020, Nori raised more than $5 million in seed funding to launch its platform. “We call it climate-smart agriculture — thinking of carbon removal like a crop,” Christophe Jospe, a Nori cofounder, told E2.

This excerpt has been updated since publication.

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Walmart Begins Search for Sustainable Packaging

Claudia Baldwin



“We don’t have time to waste.” With this imperative tagline, American retail giant Walmart launched its Circular Connector this spring.

The goal: to accelerate innovation in the field of sustainable and circular packaging, creating a bridge between companies looking for packaging that has less impact on the environment and those with new solutions to offer.

Searching for sustainable packaging

That the world’s largest retail multinational is launching an online platform to encourage the circular economy of packaging — even while accounting for some form of greenwashing — is undoubtedly great news.

After all, it’s a fact that consumers are becoming increasingly sensitive to the problem of plastic pollution and in general to any aspect related to the sustainability of products. And Walmart, the retail chain of over 10,000 stores around the world, is held accountable by consumers on a daily basis.

Hence the ambitious commitment that the multinational has set for itself by 2025: to achieve that 100 percent of packaging on its shelves would be either recyclable, reusable or industrially compostable. And hence the rush to find solutions to reach the goals.

It’s a fact that consumers are becoming increasingly sensitive to the problem of plastic pollution… And Walmart is held accountable by consumers on a daily basis.

The Circular Connector was therefore created as an online tool to connect packaging designers and manufacturers with companies in various sectors, from food to cosmetics, from fashion to toys. “Basically,” explains a statement on Walmart’s website, “it’s a platform to accelerate packaging innovation and implementation. We want to make it easier for suppliers and brands to find sustainable packaging solutions, thus enabling all of us to move faster toward waste reduction.”

How does the Circular Connector work?

The Circular Connector is accessed from the multinational company’s sustainability policy site, the Walmart Sustainability Hub. To participate, sustainable packaging manufacturers or designers must fill out a special questionnaire with a series of questions about the functions, materials and recyclability of the candidate packaging. Each proposal will then be reviewed according to Walmart’s packaging sustainability goals and, if compatible, will be posted on the site and made available to brands for possible supply contracts.

Reiterating, pragmatically, that they “don’t have time to waste,” the project leaders also made available the company’s Recycling Playbook, based on the two principles of recyclability established by the Ellen MacArthur Foundation. Namely: 1. Is there, in practice, a system for large-scale recycling of this category of packaging that guarantees at least a 30 percent recycling rate for over 400 million people? 2. Do the packaging components fit into that system?

Walmart’s handbook also contains valuable guidance on materials, such as those that are difficult to recycle and therefore tend to be excluded from sorting: metallic films, multi-layer materials, PVC or PVDC, PETG in rigid plastic packaging, oxo-degradable plastics and colored PET.

“We need to work together to promote innovative solutions on a large scale,” states Walmart. “Companies with reusable, refillable, recyclable and other sustainable packaging solutions should therefore come forward. There are hundreds of brands striving to achieve their own packaging sustainability goals, just like Walmart, and the Circular Connector is one tool available to them in this journey.”

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Episode 317: Conversations About Circularity

Claudia Baldwin



This week’s run time is 1:03:05.


Featuring a recap of interviews and stories from Circularity 22, held this week in Atlanta.

INTERVIEW: Jon Smieja, vice president of circularity and senior analyst for GreenBiz, reflects on hot topics and themes
STORY/AUDIO HIGHLIGHT: Planet vs. plastic: Three steps to solving the global plastics crisis (Featuring Keiran Smith, co-founder and CEO of Mr. Green Africa, on how to encourage decisions made at the local level.)
STORY/AUDIO HIGHLIGHT: John Warner: How to do the materials economy right (Featuring John Warner, senior vice president and research fellow of Zymergen, on how green chemistry could enable the leap to a regenerative, circular economy … if we educated chemists.)
CHITCHAT: Textile recycling tech startup triumphs in Circularity 22’s Accelerate competition
AUDIO HIGHLIGHT: Suzanne Shelton, founder and CEO, Shelton Group (On the importance of shifting context; and what that disturbing baby wrapped in cellophane image teaches us about marketing circularity.)

More sustainable consumer goods (47:30)

Interview with new CEO Christy Slay of The Sustainability Consortium, about priorities, circularity and engaging nimble innovators.

*Music in this episode: Lee Rosevere: “Not My Problem” and “Let That Sink In”; ItsWatR: “Awakening Instrumental”


To make sure you don’t miss the newest episode of GreenBiz 350, subscribe on iTunes or Spotify. Have a question or suggestion for a future segment? E-mail us at [email protected].

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