🌎 Climate brick by brick #194

Happy Monday!

It’s Earth Day, and we hope you’re celebrating. We’re looking forward to seeing climate tech continue to scale — a common problem we’ve heard from founders and funders. One newly released framework for European climate tech, EQT Ventures’ and Contrarian Ventures' The Climate Brick, aims to help companies scale faster with step-by-step guides based on their different types of hardware and go-to-market journeys. Given the challenges that the sector has faced in the last year, the report aims to give players the “missing manual” for successful capitalization strategies. Another new tracker, John Doerr and Ryan Panchadsaram’s Speed & Scale plan, shows where the world’s making progress on getting to net zero by 2050 — and where it’s not.

In other news, a closer look at Dubai’s wild weather and the cloud seeding controversy; the World Bank’s $11bn fundraise for climate solutions; and new US tariffs against Chinese solar panels.

In deals this week, $149m for green hydrogen, $110m for electric trucks, and $65m for engineered proteins.

Following the last piece in our series on FOAK last week, we'll be hosting a webinar "Line of Sight: To FOAK and beyond" on May 7th, with special guest David Yeh. Reserve your spot here.

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News Headlines

Scaling climate-tech is different from scaling software — the well-established market for software products and services is full of clear use cases, business models, and prominent players. However, developing and commercializing climate technologies often involves longer development cycles, and climate hardware and infrastructure can be more capital-intensive and riskier.

Clearly, climate tech is still trying to find the right metrics and roadmaps to scaling. That’s why EQT Ventures, a Swedish early-stage VC firm, and Contrarian Ventures, an investment firm backing European and Israeli early-stage tech, told us they launched The Climate Brick, a new framework to help fast-track companies scaling within the European climate tech ecosystem.

Based on data from 3,000+ climate tech ventures and ~100 expert interviews, the guide categorizes climate tech startups in "seven bricks", representing the different types of business models and technological risk profiles that determine each one’s different capitalization strategy.

The 7 bricks

Each brick has step-by-step guides that include tailored go-to-market strategies, the different venture terms needed, and specific company case studies.

Some highlights include:

Gigascaling: Building CAPEX-intensive, large-scale plants for established green production methods, such as green steel, batteries, and green fuels
- Roadmap: An execution game. Build a FOAK plant and scale rapidly. Ensure committed take-or-pay offtakes to unlock non-dilutive capital and equity.
- Case study: Northvolt, a European battery manufacturing company, knew that building its first electric vehicle battery factory would be capital intensive. It received early funding from the European Investment Bank, as well as developed strategic partnerships with automotive giants like BMW and Volkswagen, which fostered confidence among financial investors and lenders. Strong offtake agreements, coupled with innovative commercial arrangements, played a pivotal role in attracting financing and mitigating risk.
Asset-as-a-service: Providing green assets-as-a-service, such as micromobility or Electrical Vehicle-as-a-Service.
- Roadmap: Demonstrate product-market fit (PMF), including clear customer value addition. Ensure path to profitable unit economics – either through scale or design to cost minimization. Ramp up rapidly and secure customers/offtake agreements early on.
- Case study: Einride, a sustainable shipping platform, aimed to address the inefficiencies and environmental impact of traditional freight transport methods by deploying digital, electric, and autonomous technologies. The company first introduced autonomous operations in less complex environments and refined its technology to create proof points, then scaled its business. With initial strong VC backing, Einride expanded its investor base for a $100m Series B, and continued to score strategic partnerships, including investments from industry giants like Maersk. Einride secured $500m in equity and debt financing in 2022 to expand its electric vehicle fleet.
Moonshot: Launching highly game-changing science fundamental to the way entire sectors work, such as fusion and quantum computing.
- Roadmap: Ensure grants and public funding throughout the journey, given the long time to first revenue. Prove technological readiness, drive R&D, and establish IP moats (e.g., patents). Lock in key commercial partners and customers (e.g., large governmental).
- Case study: Marvel Fusion is leveraging advancements in nanofabrication and laser technologies to develop laser-driven fusion technology. The company secured early seed investment, enabling it to validate concepts and expand the team. Collaborative efforts with industry leaders like Thales and Siemens Energy helped Marvel begin power plant designs. With over $200 million in private funding and public collaboration projects, including significant investments in laser infrastructure development and research facilities, Marvel Fusion’s roadmap includes expanding its team with senior experts and academic collaboration to refine fusion applications, with the goal of constructing a commercial-scale laser fusion facility by 2032.

What’s next

“Founders are still only thinking one rung ahead, fixated on the next step,” Jenny Dreir, a director at EQT Ventures, told us. “With a longer-term framework, they can make decisions that make their journey stronger. This shows the long-term capital view and team dimensions that they need to keep in mind, so they can allocate resources efficiently and scale.”

“This is only the start,” Dreir added. The EQT team aims to continue to update and expand this framework annually, but in the meantime, they’re calling on the climate-tech community to engage today. You can check out the Climate Brick website and report here.

At the same time, another key roadmap for scaling climate-tech was released today. John Doerr and Ryan Panchadsaram released an update to their Speed & Scale plan, which shows how we can cut 59 gigatons of emissions to get to net zero by 2050. You can explore the 2024 Global Climate Tracker that monitors progress across ten critical objectives and their key results here.

Deals of the Week (4/15 - 4/21)

Late-Stage / Growth

⚡ Tree Energy Solutions, a Brussels, Belgium-based green hydrogen producer, raised $149m in Series C funding from Atlasinvest, Azimut Holding, E.ON, Fortescue, HSBC, and other investors.

🚗 Windrose Technology, a Sunnyvale, CA-based electric truck maker, raised $110m in Series B funding from Goodman Group, HITE Hedge Asset Management, and HSBC.

👕 Spiber, a Tsuruoka, Japan-based fermented brewed proteins-based eco-fibers developer, raised $65m in Growth funding from undisclosed investors.

⚡ GridBeyond, a Dublin, Ireland-based distributed and flexible energy resources platform, raised $56m in Series C funding from Klima, ABB, Act Venture Capital, Constellation Energy, Energy Impact Partners, and other investors.

👕 Bcomp, a Fribourg, Switzerland-based natural fiber composite developer, raised $43m in Series C funding from EGS Beteiligungen AG, RKKVC, Verve Ventures, and Zürcher Kantonalbank.

🥩 Mosa Meat, a Maastricht, Netherlands-based cultivated meat developer, raised $43m in Growth funding from Lowercarbon Capital, M Ventures, Doux Ventures, Invest-NL, PHW Group, and other investors.

🏠 KODE LABS, a Dover, DE-based building optimization analytics platform, raised $30m in Series B funding from Maverix Private Equity, I Squared Capital, and TELUS Ventures.

⚡ Swtch Energy, a Toronto, Canada-based multi-tenant EV charging platform, raised $27m in Series B funding from Blue Earth Capital, Active Impact Investments, GIGA Investments, and Klima.

🌾 Greeneye Technology, a Tel Aviv, Israel-based AI precision spraying developer, raised $20m in Series B funding from Deep Insight, Iron Nation, Jerusalem Venture Partners (JVP), Orbia Ventures, and Syngenta Group.

⚡ GA Drilling, a Trnava, Slovakia-based plasma geothermal drilling platform, raised $15m in Growth funding from Nabors, Underground Ventures, alfa8, and Neulogy Ventures.

Early-Stage

🏠 Quilt, a Redwood City, CA-based climate-smart home heating platform, raised $33m in Series A funding from Energy Impact Partners, Galvanize Climate Solutions, Garage Capital, Gradient Ventures, Incite Ventures, and other investors.

⚡ Found Energy, a Boston, MA-based hydrogen producer from scrap aluminum, raised $12m in Seed funding from Autodesk Foundation, GiTV, Glenfield Partners LTD, Good Growth Capital, J-Impact, and other investors.

⚡ Halcyon, a San Francisco, CA-based energy data platform, raised $11m in Seed funding from Congruent Ventures, Obvious Ventures, and Overture VC.

♻️ Breaking, a Boston, MA-based plastic recycling platform, raised $11m in Seed funding from undisclosed investors.

🌱 Cozero, a Berlin, Germany-based carbon management software platform, raised $7m in Series A funding from EnBW New Ventures, Kvanted Ventures, and NewAlpha Asset Management.

🌱 Momentick, a Tel Aviv, Israel-based satellite-based emissions monitoring platform, raised $6.5m in Seed funding from Chartered Group and TAU Ventures.

🧪 AmphiStar, a Gent, Belgium-based biosurfactant producer, raised $6m in Seed funding from European Circular Bioeconomy Fund, Flanders Future Tech Fund, and Qbic Fund.

🌱 Sumday, a Burnie, Australia-based carbon accounting software platform, raised $5m in Seed funding from Planeteer Capital, Blackbird Ventures, Possible Ventures, and Wedgetail Ventures.

⚡ HyLight, a Le Plessis-Pâté, France-based hydrogen-powered drone operator, raised $4m in Seed funding from Collaborative Fund, Kima Ventures, Ring Capital, and Y Combinator.

☔ Unwritten, a London, England-based climate transition risk analytics platform, raised $3m in Seed funding from Connect Ventures, Adapt Nation Capital, Planet A Ventures, and Sand River.

🌾 OlsAro, a Göteborg, Sweden-based AI-based climate-resilient crop platform, raised $3m Seed funding from Future Food Fund, PINC, AgFunder, FLORA Ventures, and Mudcake.

Other

🏠 Hometree, a London, UK-based renewable energy system home maintenance platform, raised an undisclosed amount of Debt funding from BlackRock.

Exits

⚡Sentient Energy, a Frisco, TX-based grid monitoring solutions provider, was acquired by Accurant International for an undisclosed amount.

New Funds

Wellington Management, a Boston, MA-based investment firm, held a final close of its $385m climate innovation fund.

SOSV, a Princeton, NJ-based investment firm, held a final close of its $306m SOSV V fund that invests in deep tech startups targeting human and planetary health.

Chevron Technology Ventures, a Houston, TX-based investment firm, announced the launch of a $300m fund that invests in renewable energy technologies.

Magnesium Capital, a London, UK-based investment firm, held a final close of its $144m debut fund that invests in European companies working on proven technologies for the energy transition.

Can’t get enough deals? See full listings and deal analytics on Sightline Climate

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In the News

Photos of record flooding in Dubai went viral last week, prompting concerns about whether the drought-busting climate tech, cloud seeding, was the culprit. But it looks like it was actually just climate change-fueled storms.

The World Bank secured $11bn in pledges to boost lending for climate change solutions, among other global challenges. These funds will flow to low-income countries to combat climate-related challenges, such as improving infrastructure and fostering sustainable development.

President Joe Biden approved tariffs on Chinese bifacial panels, the main technology in utility-scale solar projects. The decision aims to bolster US manufacturing for solar by reducing international competition.

The private equity giant, Blackstone, plans to turn a failed Britishvolt gigafactory into a massive data center. Blackstone's data center investments have increased tenfold in recent years, reaching $100 billion. [Read our issue on increasing data center demand here.]

Direct air capture technology company, Climeworks, announced a business model pivot that allows businesses to pay for verifiable carbon removals from a variety of technologies, offering a new approach to carbon offsetting .

In a push towards a green economy, the State of New York will offer rebates for energy-efficient appliances via the Inflation Reduction Act (IRA). New York is the first state to obtain federal approval for its program to distribute big rebates for home electrification, and 11 more states are following its lead.

In more IRA news, President Biden revealed the initial recipients of the 48C green tax credits: 35 approved projects so far, spanning 20 states. The tax credits were predominantly awarded to EV manufacturers and a few solar projects, with clean energy manufacturers receiving investment tax credits of up to 30% for their technologies. The IRS plans to issue guidance for the second round of submissions soon.

Scotland dropped its 2030 emission reduction goal of cutting carbon emissions by 75% by 2030, with plans to publish a revised outline for achieving net zero over the summer. Mairi McAllan, the Scottish National Party's net zero secretary, attributed the adjustment to budget cuts from the central UK government, which impacted its ability to meet previous targets.

Green Li-ion installed the first black mass to precursor cathode active material (pCAM) battery recycling plant in North America. The facility will have a daily production capacity of 2 metric tonnes of battery-grade pCAM. Meanwhile, automakers like Renault have already expressed interest in battery recycling operations, as they would drastically reduce the cost of vehicles.

Pop-up

DOE Gridtech lift off report comes online.

The US is revamping federal land use, opening up “restoration leases” for conservation groups.

A scientific study on if climate lawsuits actually catalyze change.

A snapshot of the global nuclear capacity pie.

A peek at the machine in the middle of the desert crunching through 250,000 expired EV batteries a year.

A deep dive into what went wrong at Renewcell, the promising eco-fiber startup hanging on by a thread after it went bankrupt in 2023.

AI could hike copper demand by 2030 — but it’s still TBD how much AI will actually spike our energy use.

Worst planet-wide coral bleaching event imminent, with reef heat stress rising 1% weekly.

In a Three Body Problem-worthy plot twist, Greenland’s diminishing ice weakens its gravitational pull — which is bad news for the Southern Hemisphere.

Golden State glows green, exceeding energy needs with 100% renewables for 30 days.

Crack open the new FOAK case study guide.

Opportunities & Events

📅 Planeteer at SF Climate Week: RSVP to join Sophie and Hannah at any of the events listed in the Planeteer schedule during SF Climate Week!

📅 Carbon Removal & Climate Policy: RSVP to join this live podcast recording on April 25th with MCJ Collective Managing Partner and Podcast Host Cody Simms, along with guests Shashank Samala, CEO and Co-founder of Heirloom, and California Senator Scott Wiener.

📅 Innovation Zero: Register to join the UK's largest net-zero congress in London Olympia on April 30th - May 1st. The event, supported by the UK Government, focuses on sustainability and low-carbon solutions, providing a platform for announcements, partnerships, deal-making, and collaborations.

📅 Newlab Pilot Showcase: Register to virtually attend Newlab's Pilot Showcase on May 7. Get an exclusive look at innovative technologies piloted by eight trailblazing deep-tech startups, Newlab, and organizations like Ford’s Michigan Central, NYC DOT, and Invest Puerto Rico.

💡 Carbon to Value Accelerator: Apply by June 21 to join the fourth cohort of the C2V Initiative's world-class carbontech accelerator program. This multi-year collaboration between Urban Future Lab at NYU Tandon School of Engineering, Greentown Labs, and Fraunhofer USA seeks startups at Technology Readiness Level 4-7 that are developing carbontech innovations.