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Robotic Automations

The 'valley of death' for climate lies between early-stage funding and scaling up | TechCrunch

April 27, 2024 8:38 PM0


Jonathan Strimling faced a dilemma. His company had spent nine years working on chemical processes that could turn old cardboard boxes into high-quality building insulation. The good news was the team had finally cracked it: CleanFiber’s technology pumped out insulation — really good insulation. It had fewer contaminants and produced less dust than other cellulose insulation made from old newspapers. Insulation installers loved the stuff.

Now CleanFiber had to make more of it. A lot more.

Many founders and CEOs might be envious of the problem. But the transition from science project to commercial outfit is one of the hardest to pull off.

“It’s hard to launch your first-of-breed plant,” Strimling, the company’s CEO, told TechCrunch. “It did cost us more than we expected. It took us longer than we expected. And that’s fairly typical.”

Any startup is laced with a certain amount of risk. Early-stage companies are often unsure whether their technology will work or whether their product will find enough customers. But at that point, investors are more willing to stomach the risk. They know fresh startups are a gamble, but the amount required to get one off the ground is relatively small. It’s easier to play the numbers game.

The game changes, though, when startups emerge from their youth, and it becomes especially challenging when the company’s products are made of atoms, not ones and zeros.

“There’s still a lot of hesitancy to do hardware, hard tech, infrastructure,” Matt Rogers, co-founder of Nest and Mill, told TechCrunch. Those awkward middle stages are particularly hard for climate startups, which are dominated by hardware companies.

“You can’t solve climate with SaaS,” Rogers said.

The problem has come to dominate conversations about finance and climate change. There has been an explosion of startups in recent years that seek to electrify homes and buildings, slash pollution in industrial processes, and remove planet-warming carbon from the atmosphere. But as those companies emerge from the lab, they’re finding it hard to raise the kind of money they’ll need to build their first commercial scale project.

“That transition is just a really, really difficult one,” said Lara Pierpoint, managing director of Trellis Climate at Prime Coalition. “It’s not one that VC was designed to navigate, nor is it one that institutional infrastructure investors were designed to take on from a risk perspective.”

Some call this the “first of a kind” problem. Others call it the “missing middle,” describing the yawning gap between early-stage venture dollars and expertise on one end and infrastructure funds on the other. But those terms paper over the severity of the problem. A better term might be what Ashwin Shashindranath, a partner at Energy Impact Partners, calls “the commercial valley of death.”

Sean Sandbach, principal at Spring Lane Capital, puts it more bluntly, calling it “the single greatest threat to climate companies.”

Financing hardware is hard

The valley of death isn’t unique to climate tech companies, but it poses a bigger challenge for those that seek to decarbonize industry or buildings, for example. “When you’re making hardware or infrastructure, your capital needs are just very different,” Rogers said.

To see how, consider two hypothetical climate tech companies: one is a SaaS startup with revenue that recently raised a $2 million round and is looking for another $5 million. “That’s a good story for a traditional venture firm,” said Abe Yokell, co-founder and managing partner at Congruent Ventures.

Contrast that with a deep tech company that doesn’t have any revenue and is hoping to raise a $50 million Series B to fund its first-of-a-kind project. “That’s a harder story,” he said.

As a result, “a good portion of our time consistently is spent with our portfolio companies helping them bring on the next stage of capital,” Yokell said. “We are finding people to fill the gap. But it’s not like you go to 20 funds. You go to 100 or 200.”

It’s not just the dollar amounts that make it more challenging to raise money. Part of the problem lies in the way startup financing has evolved over the years. Where decades ago venture capitalists used to tackle hardware challenges, today the majority tend to avoid them.

“We have a capital stack in our economy that was built for digital innovation,” rather than hardware advances, said Saloni Multani, co-head of venture and growth at Galvanize Climate Solutions.

How startups die in the middle

The commercial valley of death has claimed more than a few victims. Over a decade ago, battery manufacturer A123 Systems worked feverishly to build not just its own factories, but also an entire supply chain to provide cells to companies like GM. It ended up being sold for pennies on the dollar to a Chinese auto parts giant.

More recently, Sunfolding, which made actuators to help solar panels track the sun, went belly up in December after it ran into manufacturing challenges. Another startup, electric bus manufacturer Proterra, declared bankruptcy in August in part because it had signed contracts that were unprofitable — making the buses simply cost more than anticipated.

In Proterra’s case, the struggles of mass manufacturing buses were compounded by the fact that the company was also developing two other business lines, one that focused on battery systems for other heavy-duty vehicles and another that specialized in charging infrastructure for them.

Many startups fall into this trap, said Adam Sharkawy, co-founder and managing partner at Material Impact. “As they get some early success, they are looking around themselves and saying, ‘How can we build our ecosystem? How can we pave the path to really scaling? How can we build infrastructure to prepare ourselves to scale?’” he said. “They lose sight of the core value proposition that they’re building, that they need to ensure execution on, before they can start to linearly scale the rest.”

Finding talent to bridge the gap

Maintaining focus is one part of the challenge. Recognizing what to focus on and when is another. That can be learned with firsthand experience, something that’s often lacking in early-stage startups.

As a result, many investors are pushing startups to hire people experienced in manufacturing, construction, and project management earlier than they might otherwise do. “We always advocate for the early hiring of roles such as project manager, head of engineering, head of construction,” said Mario Fernandez, head of Breakthrough Energy Catalyst, which invests in large demonstrations and first-of-a-kind projects.

“Team gap is a big thing that we’re trying to address,” said Shashindranath, the EIP partner. “Most companies that we invest in have never built a large project before.”

To be sure, having the right team in place won’t matter if the company runs out of money. For that, investors have to dig deeper into their wallets or look elsewhere for solutions.

Money matters

Writing more and bigger checks is one solution that many firms pursue. Many investors have opportunity funds or continuity funds reserved for the most successful portfolio companies to ensure they have the resources required to survive the valley of death. Not only does that give startups bigger war chests, but it can also help them access other pools of capital, Shashindranath said. Companies with bigger bank accounts have “additional credibility” with debt financiers, he said. “It’s signaling that helps in a lot of different ways.”

For companies building a factory, asset-backed equipment loans are also an option, said Tom Chi, founding partner at At One Ventures, “where in the worst-case scenario, you’re able to sell back the equipment at 70% of the value and you only have a little bit of debt cap to go repay.”

Yet for companies at the bleeding edge, like a fusion startup, there are limits to how far that playbook can take them. Some projects simply need lots of money before they’ll bring in meaningful revenue, and there aren’t many investors who are well positioned to bridge the gap.

“Early-stage investors, for a whole host of reasons, have struggled to support that middle process largely owing to the scale of their funds, the scale of the checks that they can write, and, to be candid, the realities of the returns that these assets are ultimately able to produce,” said Francis O’Sullivan, managing director at S2G Ventures. “Venture-like returns are exceptionally difficult to achieve once you move into this larger, more capital intensive, more project orientated, commodity-producing world.”

Typical early-stage venture investors aim for tenfold returns on investments, but O’Sullivan argues that perhaps a better mark for hardware-focused climate tech startups would be 2x or 3x. That would make it easier to attract follow-on investment from growth equity funds, which look for similar returns, before handing things off to infrastructure investors, which tend to aim for 50% returns. Problem is, most investors aren’t incentivized to work together, even within large money managers, he said.

On top of that, there aren’t many climate-focused VC firms that have the scale to provide funding in the middle stages, said Abe Yokell. “What we’re really betting on at this point is that there’s enough overlap [in interests] for the traditional venture firms to come in,” he said. “Now the problem, of course, is that over the last couple of years traditional venture has been very beat up.”

Bringing in more capital

Another reason traditional venture firms haven’t stepped up is because they don’t truly understand the risks associated with climate tech investments.

“In hardware, there are things that look like they have technology risk, but actually don’t. I think that’s a massive opportunity,” said Shomik Dutta, co-founder and managing partner of Overture. “Then there are things that look like they have technology risk and still do. And so the question is, how do we bifurcate those pathways?”

One firm, Spring Lane, which recently invested in CleanFiber, has developed a sort of hybrid approach that draws on both venture capital and private equity. The firm performs a large amount of due diligence on its investments — “on par with the large infrastructure funds,” Sandbach said — which helps it gain confidence that the startup has worked through the scientific and technical challenges.

Once it decides to proceed, it often uses a combination of equity and debt. After the deal closes, Spring Lane has a team of experts who help portfolio companies tackle the challenges of scaling up.

Not every firm will be inclined to take that approach, which is why Pierpoint’s firm, Prime Coalition, advocates for more so-called catalytic capital, which includes everything from government grants to philanthropic dollars. The latter can absorb risk that other investors wouldn’t be keen to accept. Over time, the thinking goes, as investors get a deeper appreciation of the risks involved in middle-stage climate tech investing, they’ll be more inclined to place bets on their own, without a philanthropic backstop.

“I’m a big believer that human beings de-risk things through knowledge,” Multani said. “The reason I love seeing generalist firms invest in these companies is because it means they spent a bunch of time understanding the space, and they realize there’s an opportunity.”

However it happens, creating climate solutions through technology is an urgent challenge. The world’s countries have set a goal to eliminate carbon pollution in the next 25 years, which isn’t that long if you consider that it takes several years to build a single factory. To keep warming below 1.5°C, we’ll have to build a lot of factories, many of which have never been built before. And to do that, startups will need lots more money than is available today.

CleanFiber wants to turn millions of tons of cardboard boxes into insulation

At CleanFiber, Strimling and his team haven’t just completed the company’s first factory, but have also expanded it. It’s now producing enough insulation for 20,000 homes every year. The next few facilities should take less time to build, but the hurdles on the road to opening the first were significant. “When launching the first-of-breed plant, you do run into things you don’t expect,” Strimling said. “We ran into a pandemic.”

Replicating that success across a range of industries won’t be easy or cheap. Still, plenty of investors remain optimistic. “The future will look different from the past,” Multani said. “It must.”


Software Development in Sri Lanka

Robotic Automations

Trellis Climate aims to bridge the 'commercial valley of death' for climate tech | TechCrunch

April 18, 2024 4:44 PM0


Let’s say you’re a founder who started a company that’s based on a breakthrough technology which can make hydrogen cheaper and faster than anyone else — so much faster and cheaper that you sailed through your first several rounds of fundraising, bringing in tens of millions of dollars to prove it works. And it does, even better than expected.

Now all you have to do is build a commercial scale plant, the so-called first-of-a-kind facility. Some call it the “commercial valley of death,” and it’s the point at which many climate tech startups struggle. Because no one has undertaken a project like that before, the usual financiers tend to balk; there are too many unknowns.

Climate nonprofit Prime Coalition is hoping to bridge the valley with a new program, Trellis Climate.

Prime Coalition has long taken a different tack to climate finance compared to its for-profit brethren. It makes the usual venture-style investments in startups through its Prime Impact Fund and also helps philanthropists direct their money to climate-related projects that it deems high impact. Trellis Climate follows the latter model with a focus on middle stages, where capital has grown scarce.

“There are more and more philanthropists that are really interested in solving the climate problem,” Lara Pierpoint, director of Trellis Climate, told TechCrunch.

“The highest, best use of philanthropy is in trying new ideas, in really swinging for the fences on the things that have a very high impact potential,” she added. “It is the most flexible and potentially risk-forward set of dollars that are out there.”

For founders in climate tech, that sort of funding is likely welcome news. Early stage founders have a wide range of capital to tap, from numerous venture capital funds to federal grants. It might not be enough to keep the planet from warming more than 1.5 degrees Celsius, but so far it has been enough to prime the pump and keep climate tech investors busy.

There has been an assumption that once climate technologies have been proven, “then corporations and industry would scale those technologies,” Pierpoint said. “On the corporate side, a lot of companies are really getting pushed to do the things that create immediate shareholder value.” As a result, there’s a widening gap in the middle.

“We strongly believe that philanthropy is the catalyst, but that the goal is to bring in infrastructure investors that are willing to lean forward a little bit on risk,” she said.

The program’s first investments include Ample Carbon, a startup that converts old coal plants to bioenergy with carbon capture and storage, and Ebb Carbon, a marine-based carbon removal startup.


Software Development in Sri Lanka

Robotic Automations

Bay Bridge Ventures is raising $200M for a new climate fund, filings show | TechCrunch

April 17, 2024 12:07 AM0


Climate investor Bay Bridge Ventures is raising a new $200 million fund, TechCrunch has exclusively learned.

Bay Bridge filed paperwork Monday for the new climate fund with the U.S. Securities and Exchange Commission. The raise comes at a time when venture investors are increasingly bullish on climate tech.

Though the last few years have been marked by a downturn in the general venture market, a number of firms have raised eye-popping sums to back climate tech founders. SOSV announced on Tuesday a $306 million deep tech fund that will be 70% focused on climate. New Summit Investments is raising a $100 million impact fund. And Congruent Ventures raised a $275 million fund in 2023, turning down $325 million in additional LP interest.

The difference, though, is that those are all relatively established firms. Bay Bridge Ventures is new, having been founded in 2022 with a focus on ESG more broadly and sustainability in particular. Though the firm participated in a $10 million round for SailPlan in 2022, according to PitchBook, it doesn’t appear to have any other investments or funds on record, based on a search of SEC filings and PitchBook data.

Still, that doesn’t mean Bay Bridge lacks experience. General partner Andrew Karsh left pension fund CalPERS to co-found the firm. His co-founders Joe Blair and Kim Kolt aren’t new to the scene, either. Blair previously worked at Cota Capital and Obvious Ventures and currently hosts the Epic Human Podcast. Kolt founded For Good Ventures and previously worked at Goldman Sachs and Deutsche Bank.

The firm did not reply to a request for comment prior to publication.

The team’s previous investments span a range of industries, including sustainable shoe company Allbirds, electric grid software startup Arcadia, fleet EV charging company Amply, and space launch startup Astra.


Software Development in Sri Lanka

Robotic Automations

SOSV founder says climate investing is a 'war effort' as firm closes $306M fund | TechCrunch

April 16, 2024 7:06 PM0


For the firm that calls itself “the first check in deep tech,” the last check for SOSV’s latest $306 million fund took a bit longer than founder Sean O’Sullivan would have liked. That’s probably less a reflection on the firm than an indictment of the macroeconomic environment: Ask any VC, and they’ll tell you the last couple years haven’t been the best time to fundraise.

“Given our track record, our rates of return, the proven successes, all the unicorns that have come out of SOSV in the past, you’d imagine we’d have closed it in three months,” O’Sullivan told TechCrunch in a recent interview. Instead, it took about a year and a half, with the most concerted effort occurring in the last six months, according to O’Sullivan.

“The caution that’s out there in the marketplace is the highest we’ve ever seen,” he said.

Despite the arduous and lengthy process, SOSV still managed to hit a new milestone:

At $306 million, the new fund makes it one of the largest pools of early stage deep tech venture capital to be raised in recent years.

“We’re concentrating and double doubling down on deep tech,” O’Sullivan said. “That concentration allows us to deal with an ever-expanding opportunity set inside of climate because there are so many industries in climate.”

The market’s caution is a reality of high interest rates, but to O’Sullivan, it’s also a sign that deep tech investing isn’t moving fast enough. Many investors have realized that the economy-wide effects of climate change present a range of opportunities. For O’Sullivan, investing in the sector is an imperative as well.

“This is really a war effort. We have to stop pretending this is just another investment theme of the day. This is an existential crisis for the planet,” he said. “So we’re treating it with that intensity, and with that velocity, that we think the rest of the industry needs.”

Velocity and intensity could mean placing more bets than before, as some firms and accelerators are doing. O’Sullivan is taking the “less is more” approach.

“We see other people heading in a different direction, where they try to cover all the landscape with like 200 companies in a cohort,” he said. “Instead of the accelerator origin point, we’re more like a studio these days. We’re doing a fewer number of companies, more like 80 deep tech companies per year. And we’re concentrating more capital and more attention and more service on them.”

Continued focus on biology

O’Sullivan said that over a decade ago, during the days in which SOSV was more like an accelerator, only about 20% to 30% of the startups in its programs were able to find follow-on funding. That bothered him, and over the years he’s changed the firm’s approach, including opening the Hax and IndieBio programs, two SOSV programs that nurture deep tech startups by providing them space to build and experiment in addition to operational support.

The result, O’Sullivan said, is that 60% to 70% of companies now find funding after SOSV’s initial pre-seed checks, which range from $250,000 to $500,000. In general, every $100 million the firm invests in startups attracts around $2 billion in follow-on capital, he added.

SOSV’s new fund will continue the firm’s focus on human and planetary health, an emerging trend among deep tech investors who have recognized that the two areas are closely intertwined. O’Sullivan said that SOSV intends to invest about 70% of the funds in climate tech companies, 25% in health tech, and the remaining 5% will be reserved for opportunistic investments.

The limited partners who are involved in the new fund include a mix of family offices, institutional investors and corporate venture capital, the latter of which contributed 25% of the total capital.

“The reason it’s so high is because so many corporations are the ones that need these decarbonization technologies,” O’Sullivan said.

The firm will continue to search for startups with a range of technologies, from robotics to minerals and biomaterials to biomanufacturing. SOSV will still put a focus on those that are using biology to tackle climate change. O’Sullivan believes that, in many cases, biological processes will win out. “Biology can be 30 to 300 times — even 3,000 times — more efficient than chemistry in terms of reducing the greenhouse gas production of these systems.”

Climate “is really a physical world problem. To tackle that, you need a greater level of efficiency in your means of production,” O’Sullivan said. “We have a special place to serve because we do deep tech, because we do get into the biology, we do get into the chemistry, the physics and the electronics. And that is all necessary to change the means of production.”


Software Development in Sri Lanka

Robotic Automations

New U.S. ‘green bank’ aims to steer over $160B in capital into climate tech | TechCrunch

April 16, 2024 10:00 AM0


For years, banks have been financing large renewable power projects, from utility-scale solar farms to horizon-spanning wind farms. But smaller projects, like installing a heat pump in someone’s home or retrofitting affordable housing, often get passed over. They simply haven’t been lucrative enough.

But the demand is there, which is why advocates have been clamoring for the federal government to support a so-called green bank, which will underwrite these sorts of projects.

That green bank is now a reality. On Thursday, the EPA announced that it had awarded $20 billion in grants from the Inflation Reduction Act to eight organizations that will use the money to make loans that will help with those projects.

“It’s a chance to prove that this works and creates real benefit on the ground for people across America,” Dawn Lippert, founder and CEO of Elemental Excelerator, told TechCrunch, adding that “tribal communities, rural communities, low income and disadvantaged communities are really the focus here.”

Indeed, over $14 billion of the funding will go toward communities that fit those descriptions, the EPA said.

What’s more, since the money is to be used for loans, it can be recycled once those loans are paid off. Green bank loans have a pretty good track record, too. The Connecticut Green Bank, for example, has a delinquency rate that’s on par with other commercial lenders across both residential and commercial portfolios.

In addition to providing financing for energy upgrades, the Greenhouse Gas Reduction Fund, as it is known, is hoping to attract $7 in private capital for every dollar it disperses. In fact, that might be a conservative figure: McKinsey expects the new green bank should attract more than $12 of private investment per dollar on its balance sheet.

The U.S. is expected to need $27 trillion by 2050 to hit net-zero carbon emissions, McKinsey estimates, which might make the green bank’s $20 billion seem small. But its ability to spur private investment and the fact that it’s not a one-time grant should allow it to have an impact that extends beyond its initial bottom line.

Founders and investors should see some benefit, too. Though the money is aimed mostly at consumers and small businesses, equity investments are a possibility, Lippert said. Plus, the funding should juice demand for technologies that have been proven and are ready for commercial deployment.

For those that aren’t yet, the green bank’s loans should have a cascading effect, sending a signal upstream to founders and investors that there are markets for consumer-level climate tech that works for low-income and disadvantaged communities.

“This $20 billion of funding is going to have a really significant impact on creating jobs, reducing costs for American families, creating a healthier, safer future for our children,” Lippert said.


Software Development in Sri Lanka

Robotic Automations

Windfall Bio is seeing strong demand for its methane-eating microbe startup | TechCrunch

April 13, 2024 9:41 PM0


When Josh Silverman started shopping around the idea for his methane-eating microbe startup, Windfall Bio, eight years ago, the market just wasn’t ready. Nobody cared about methane, he said. Companies were instead focused on lowering their carbon emissions. But a few years later, the market is starting to come around.

Menlo Park–based Windfall Bio raised a $28 million Series A round to expand its commercialization efforts. The round was led by Prelude Ventures with participation from Amazon’s Climate Pledge Fund, Incite Ventures and Positive Ventures, among others, as well as existing investors, including Mayfield.

Windfall works with industries that produce large levels of methane, such as agriculture, oil and gas, and landfills. The startup supplies methane-eating microbes that absorb methane emissions, turning them into fertilizer. Companies can either utilize the fertilizer themselves, if they are in the agriculture sector, or they can sell it as a revenue stream.

“We think there is a big opportunity to leverage this natural ecosystem that gives us a low-cost solution without needing massive investments in capital like we are seeing for these other carbon capture technologies,” Silverman said.

While it took a couple of years to really get investors and companies on board, Silverman said that since the Windfall raised its seed round last year and emerged from stealth in March 2023, demand has been high.

“We have had a massive influx from all continents and all verticals; huge amounts of excitement,” Silverman said. “It’s profitable for everybody regardless of the industry. Everyone wants to reduce their carbon footprint, and they want to do it in a way where they make money and there aren’t many solutions.”

Silverman says that carbon capture was the only focus for so long because once carbon is in the atmosphere, it lasts forever, compared to methane’s 10- to 12-year lifespan. A few decades ago, when people thought about climate change, they were looking for more long-term solutions. But now that the impacts of climate change are both more clear and worsening, people are waking up to the need for both short-term and long-term solutions.

“We have literally missed every single climate target we have put in place,” Silverman said. Not a single G20 country has the policies needed in place for it to reach the Paris Agreement’s emission-reduction targets, for example. “If all you are doing is looking out in the future and not doing the day to day, you miss those targets and miss what is right in front of you. We need to manage the short-term climate factors, or we won’t be around to deal with the long-term.”

The lack of attention to methane is also surprising because methane actually can create a better ROI for companies than their carbon-reduction efforts.

Carbon is waste, which means that when companies capture it, they do so largely just to get rid of it, as opposed to turning it into something else. In comparison, methane is energy, which means it can be captured and repurposed much easier than carbon. Essentially, companies can reduce carbon for potential cost savings down the road, or a super legit carbon credit, while focusing on methane can actually make them money if they work with a company like Windfall.

This deal also stood out to me because Windfall lies within a growing category of startups focused on mitigating the climate issues of today and not just the ones down the road. While it is good for companies to be focused on mitigating the long-term impacts of climate change or trying to prevent future climate-induced events, we need solutions now.

It reminded me of Convective Capital, a venture fund I’ve written about before that’s dedicated to wildfire tech. It’s not dedicated to the tech that helps prevent them but rather tech that helps society adapt to the impact of increased wildfires now. Firm founder Bill Clerico told TechCrunch in 2022 that while it’s great to build long-term solutions, those mean nothing if your home is in danger from wildfires this summer.

Silverman said the market is still in the early innings of coming around to the potential benefits of investing in methane-reduction technology. But progress is good, and though he might be biased, Silverman is happy to see funding heading to a climate company that isn’t another carbon credit startup. I agree with him there.

“It was a long road getting here, lots of years of zero traction,” Silverman said. “Now that the traction is there and there aren’t very many people working in this area, there aren’t that many competitors. We are the best of the very few options. As I’ve said, ‘in my land of the blind, the one-eyed man is king.’”


Software Development in Sri Lanka

Robotic Automations

Climate tech VC Satgana closes first fund that targets early-stage startups in Africa, Europe | TechCrunch

April 13, 2024 10:25 AM0


Climate tech VC Satgana has reached a final close of its first fund, which aims to back up to 30 early-stage startups in Africa and Europe.

The VC firm reached a final close of €8 million ($8.6 million) following commitments from family offices and high-net-worth individuals, including Maurice Lévy of the Publicis Groupe, and Back Market co-founder Thibaud Hug de Larauze.

Satgana founder and general partner, Romain Diaz, told TechCrunch that the firm decided to close the fund early, missing initial targets owing to the difficult fundraising environment, which is worse for first-time fund managers, to focus on investing and supporting portfolio companies.

“We launched the fund mid-2022, and we have raised in the most challenging time since 2015. We have managed to make 13 investments and we know that with the current capital commitments, we can execute upon our strategy of investing in 30 companies in this first fund, including follow-on investments,” said Diaz.

“This also paves the way for a new fund in a few years, and it’s likely that we launch different funds with different strategies, maybe one for Europe and another for Africa — but that will come in later; for now, we are really focused on getting this fund right,” he said.

The VC firm invests up to €300,000 ($325,000) in early-stage startups working on mitigating and building resilience to climate change, with a bias for mobility, food and agriculture, energy, industry, buildings and the circular economy subsectors.

African climate startups set to gain ground as VC funding shifts their way

Its investees in Africa include Amini, a startup bridging the environmental data gap in Africa; Mazi Mobility, a Kenyan mobility-as-a-service startup working to develop a network of battery-swapping infrastructure; Kubik, which upcycles plastic and has operations in Ethiopia; and Revivo, a B2B marketplace selling electronic spare parts giving products like phones a new lease on life. In Europe, Satgana has invested in Orbio Earth, Yeasty, Loewi, Arda, Fullsoon and Fermify.

Diaz founded the VC firm after a decade of experience in the venture space in several African countries, including Morocco and South Africa, where he co-founded and ran a venture studio.

“I ran it for like five years, and about six years ago I started to really have the awakening to the extent of climate change. That’s where I decided to channel all the knowledge from my previous experience, but on a bigger scale, while focusing solely on investing in climate tech founders,” he said.

Diaz launched the VC firm upon moving to Europe, where he said there are adequate investment networks, especially those focused on investments targeting founders at the pre-seed stage.

Satgana’s focus on Africa was also driven by the fact that it is the most vulnerable continent despite contributing the least amount of greenhouse gas emissions. They recently appointed Anil Maguru as partner to drive their Africa strategy.

“We are entering the continent to pursue green growth objectives; so deploying renewable energy, low carbon buildings, mobility solutions and so on. But we are also keen on investments driving adaptation to climate change, because unfortunately, the reality is that climate change is upon us, and we require solutions already. This is especially for people on the frontline, who are often vulnerable communities, mainly women, people of color and low-income communities that are more exposed to the effects of climate change,” said Diaz.

“From an impact perspective, it’s important for us to invest in solutions, which [traditionally] receive only a tiny fraction of VC money,” he said.

Satgana is among the new funds that are dedicated to the African climate tech sector. These funds include Africa People + Planet Fund by Novastar Ventures, Equator’s fund and the Catalyst Fund.


Software Development in Sri Lanka

Robotic Automations

MIT tool shows climate change could cost Texans a month and a half of outdoor time by 2080 | TechCrunch

April 13, 2024 10:07 AM0


There are a lot of ways to describe what’s happening to the Earth’s climate: Global warming. Climate change. Climate crisis. Global weirding. They all try to capture in different ways the phenomena caused by our world’s weather systems gone awry. Yet despite a thesaurus-entry’s worth of options, it’s still a remarkably difficult concept to make relatable.

Researchers at MIT might finally have an answer, though. Instead of predicting Category 5 hurricanes or record heat days, they’ve developed a tool that allows people to see how many “outdoor days” their region might experience from now through 2100 if carbon emissions growth remains unchecked.

The results might be alarming or comforting, depending on where you live.

For people in California or France or Germany, things don’t look so bad. The climate won’t be quite as hospitable in the summers, but it’ll grow a little bit more clement in the spring and fall, adding anywhere from a few days to nearly a month of outdoor weather compared with historical records. The U.K. will be even better off, gaining 40 outdoor days by the end of the century.

Not everyone will come out ahead, though. Some temperate places like New York, Massachusetts, China and Japan will lose a week or more of outdoor days. Elsewhere, the picture looks even more dire. Illinois will lose more than a month of outdoor days by the 2080s as the summers grow unbearably hot. Texas will lose a month and a half for the same reason.

Yet it’s the countries with some of the most vulnerable populations that’ll suffer the most (as scientists have been warning). Nigeria’s summers will grow even hotter and longer, lopping off nearly two months of outdoor days. India will lose almost two and a half months.

It doesn’t have to be that way. Even if the world fails to reach net zero carbon emissions by 2050 — but still manages to by 2070 — the situation will improve dramatically. Both Nigeria and India would only lose one month of outdoor days, and more northerly regions would retain some of their added outdoor days.

Assessing risk

The MIT tool is a relatable application of a field of study known as climate scenario analysis, a branch of strategic planning that seeks to understand how climate change will impact various regions and demographics. It’s not a new field, but as advances in computational power have fostered more sophisticated climate models, it has become more broadly applicable than before.

A range of startups are using this relatively newfound predictive capability to help give shape to an uncertain future.

Many startups in the space are focused on tackling that uncertainty for investors, lenders and insurers. Jupiter Intelligence, Cervest and One Concern all focus on those markets, supplying customers with dashboards and data feeds that they can tailor to regions or even assets of interest. The startups also determine the risk of flood, wildfire and drought, and they’ll deliver reports detailing risk to assets and supply chains. They can also crank out regulatory disclosures, highlighting relevant climate risks.

Investors and insurers are sufficiently worried about how climate change will affect assets and supply chains that these startups have attracted some real cash. Jupiter intelligence has raised $97 million, according to PitchBook, while Cervest has raised $43 million and One Concern has brought in $152 million.

While major financial institutions are an obvious customer base for climate forecasting companies, other markets exposed to the outdoors are also in need of solutions.

ClimateAI is targeting agriculture, including agribusiness, lenders, and food and beverage companies, all of which have watched as droughts, floods and storms have decimated crops. As a result, water risk assessment is a key feature of ClimateAI’s forecasts, though it provides other weather and climate-related data, too. The startup has raised $37 million so far, per PitchBook.

Sensible Weather is working on markets that are a little closer to home for most of us. It provides insurance for people embarking on outdoor events and activities, from live concerts to camping and golfing. It works with campgrounds, golf courses, live event operators and more, allowing them to give customers an option to insure their outing against inclement weather. It’s an approach that’s landed the startup $22 million in funding, according to PitchBook.

As more businesses and consumers become aware of how climate change is affecting their lives, their demand for certainty will create a wealth of new markets that will offer these startups and their peers ample opportunity to expand. Climate scenario analysis, once a niche limited to academic labs and insurance companies, appears poised to enter the mainstream.


Software Development in Sri Lanka

Robotic Automations

New Summit is raising a new $100 million fund to back climate tech and underrepresented fund managers | TechCrunch

April 13, 2024 9:25 AM0


New Summit Investments is raising a new $100 million impact fund, according to documents filed with the SEC. The hefty new fund, should it be raised, will let it continue investing in managers backing startups and other companies focused on environmental and social problems.

This is the firm’s fifth fund and marks a sizable jump from the $40 million of its previous fund, which closed back in 2022. New Summit invests in various other funds, including venture capital, real estate investors and infrastructure investors. It currently has $115 million in assets under management, according to PitchBook.

New Summit declined to comment on the new fund’s strategy or timing, citing security regulations. “We launched one of the first multi-manager strategies for private market impact investing in 2016 and are pleased to be continuing this work,” Casey Dilloway, the firm’s managing director, told TechCrunch.

The size of the new fund suggests that it is bullish that it can convince LPs to open their wallets based not only on the firm’s investment history but also on its impact-focused approach. The fund-of-funds approach helps smaller investors place bets by finding the best-performing firms that also hew to their environmental and social requirements.

The SEC form indicates that New Summit is early in its fundraising process, and hasn’t secured any capital commitments yet. So, this is an interesting test case on if investors still have an appetite for ESG. The minimum investment is $250,000, the form says, indicating that the firm intends to approach investors of various sizes and risk appetites.

One thing going for this fundraise is New Summit’s interest in climate tech, which has bucked trends in venture capital, with deal counts remaining high throughout 2023, according to PitchBook. Last year, total investment hit $41.1 billion. While that’s off a peak of $51 billion in 2021, VCs say that climate remains one of two hot sectors where deals close fast. AI is, of course, the other.

Although the explicit focus on diversity, equity, and inclusion might be under fire from commentators, there is still a pressing need to provide opportunities to underrepresented founders, who tend to take more inclusive approaches to technology and business. New Summit has supported marginalized fund managers by launching initiatives like its partnership with investment firm Gratitude Railroad to source and underwrite underrepresented fund managers.

New Summit has also invested in several diverse fund managers who specialize in climate and health, including Black Opal Ventures and Buoyant Ventures, in addition to a range of other climate tech VCs, including ArcTern, Al Gore’s Generation Investment Management and Obvious Ventures.

New Summit Investments’ was founded in 2016 as an impact investment firm focusing on climate, health and economic opportunities. Its thesis adheres to the UN’s 17 Sustainable Development Goals, a framework to help create a more equitable planet by addressing issues such as access to clean water, quality education and poverty reduction.

New Summit Investments’ first fund closed for $20 million in 2016, followed by $36 million in 2018, according to PitchBook.


Software Development in Sri Lanka

Robotic Automations

Nvidia might be clouding the funding climate for AI chip startups, but Hailo is still fighting | TechCrunch

April 12, 2024 11:53 PM0


Hello, and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. This is our Wednesday show, when we take a moment to dig into a raft of startup and venture capital news. No Big Tech here!

Keep in mind that Y Combinator’s Demo Day kicks off today, so we’re going to be snowed under in startup news for the rest of the week. Consider today’s show the calm before the storm.

On the podcast this morning we have BlaBlaCar’s new credit facility and how it managed to land it, how PipeDreams could be onto a new model of startup construction, GoStudent’s rebound and profitability, Hailo’s chip business and massive new funding round, and the two new brands that GGV calls home as it divides up its operations on both sides of the Pacific Ocean.

Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday. You can subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

You also can follow Equity on X and Threads, at @EquityPod.

For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast.




Software Development in Sri Lanka

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