"Valuations are out of control": Chris Sacca shuns hydrogen
Lowercase Capital and Lowercarbon Capital founder Chris Sacca is souring on hydrogen startups and direct air capture, instead leaning toward startups that accelerate natural forms of carbon capture, he said at the Axios BFD event Wednesday.
Why it matters: Lowercarbon is one of the most active investors in climate tech and can help accelerate investment from other groups when it stakes its claims.
What he said: "It was such a buzzword that a lot of money went into it and valuations are out of control," Sacca said of startups working on hydrogen applications.
- "There was too much focus on direct air capture for sequestration, to the point where it is throwing the whole sector under the bus. They probably emitted more carbon flying to the ribbon cutting than it will ever take out of the air," he added.
Sacca said he favors companies that are working on technology that can help accelerate natural forms of carbon capture, such as kelp development or mineralized sequestration via basalt and limestone.
- Startups in those areas are still relatively nascent and working on pilot projects to prove the technology can work for larger applications.
- Lithos, for example, raised $6.3 million in seed funding last week for its basalt-based mix for farmers that improves carbon removal and crop yields, the company says.
- Hydrogen has been a target for skeptical investors that want to see more progress in the underlying technology before getting on board.
The intrigue: Sacca is starting to fundraise for Lowercarbon's seventh fund, Axios Pro Rata author Dan Primack said on stage at the Axios BFD event.
- Sacca also said that his firm had been approached by oil giant Halliburton as a potential LP, but Sacca said, "That's not going to happen."