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Dry powder struggles to boost ski-friendly startups

Dec 21, 2022
Illustration of a large penny sitting on a chairlift with mountains of cash in the distance

Illustration: Natalie Peeples/Axios

Ski resorts are a tricky problem to solve for the host of startups already trying to retrofit existing buildings to be more sustainable.

Why it matters: Ski resorts are, in effect, large, luxury real estate markets — the ideal property layout for climate-focused retrofitting startups.

  • However, a specific set of challenges make the ski industry and its properties less appealing to venture-backed startups.

Context: A wide range of startups are working on sustainability improvements for real estate holdings, from those that make new heating and cooling units for commercial buildings to those that model solar installations for individual homeowners.

  • Fifth Wall, a real estate-focused venture capital firm, launched a $500 million Climate Fund in July to focus specifically on the real estate startups that were addressing sustainability issues.

State of play: The ski area opportunity is evident for companies working on climate-friendly upgrades, but the concern is sustainability becoming a "nice to have" for resorts. Examples of potential partners include:

  • RoadRunner Recycling, an on-demand recycling startup, could help address resorts' waste management needs, especially given their remote locations.
  • EV charging infrastructure startups would support both lodge guests and an electrified bus fleet.
  • Heating and cooling companies, particularly those working on heat pumps, would be able to help resorts manage rising energy costs in both winter and summer.

Yes, but: Ski resorts are often in remote locations without access to the resources typical in major metropolitan areas.

  • And as the ski industry consolidates, commercial contracts are often difficult to come by for younger companies.
  • Also, the ski and snowboard industry is relatively small and just not big enough to support multiple venture-backed businesses that require high growth to survive, Fifth Wall vice president Francesca Whitehead says.
  • "It is something where you need the market share, a really high percentage of market share, to go after a niche application and make it viable," Whitehead says.

The bottom line: Ski resorts need to figure out their sustainability priorities, fast, and there are a handful of startups able to make that happen.

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