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BFD Expert Voices - Climate Deals

BFD Expert Voices

Enthusiasm for promising climate technologies has curdled into impatience, as few exits, cool consumer interest, and an ESG-investing backlash has soured all but the most mission-driven investors.

"Some VCs have had terrible returns or no realizations," Ted Brandt, CEO of investment bank Marathon Capital, tells Axios. "These are white-knuckle times."

Why it matters: Chicago-based Marathon Capital focuses on low-carbon energy and climate tech.

What's been the big news in climate tech this month?

"The demand acceleration across the electric market in the United States — nobody has quite gotten their arms around what this means. Are we going to be meeting this with renewables? Will this take small modular reactors, with gas that's decarbonized?

It's the most intriguing, exciting, scary thing going. And you're going to have to spend trillions on upgrading the grid. The implications are vast."

"The dance of the last 10 years has largely been electrify everything and reduce the oil-and-gas component of the economy. That begs huge strategic and societal questions.

Will the United States be committed to decarbonization? What policies will remain in place? Trump talking about becoming energy independent — it's hard to imagine that he can ignore the electrical side of that."

"Most public climate-tech/cleantech stocks have been down for the year. If VCs and investors are not making money, where is the money going to come from?

Corporations still are trying to decarbonize. But from an investor standpoint, there's been a switch. Four or five years ago, ESG-oriented stuff was getting much lower cost of capital and six times the amount of money it needed.

If you're talking about the generation of electricity, there's lots of financing. But if you're talking about some new way to make a solar panel, good luck.

Lots of money has been lost, burn rates haven't come down dramatically. We can't really bank the sector, because there's not a lot of cash flow in pure climate tech."

💼 First job: "Residential real estate salesman."

👑 Proudest deal: "We put together a series of geothermal projects that became Ormat, the Israeli publicly traded geothermal company."

🤦 Facepalm deal: "Technology investments. I can think of a number of batteries that had major promise but were early-stage. There's been lots of would-be Elon Musks, but very few people who have pulled off but what he's pulled off."

💡 In three-ish words, one change you'd make to climate-tech investing:: "Patience — this is a long run."

Expert voices: 'These are white-knuckle times'

Marathon Capital's CEO on the state of climate investing.

Photo illustration of Ted Brandt surrounded by abstract shapes and light.

Photo illustration: Gabriella Turrisi. Photo: Courtesy of Marathon Capital

Expert voices

Enthusiasm for promising climate technologies has curdled into impatience, as <a class="gtmContentClick" data-vars-link-text="few" data-vars-click-url="https://www.axios.com/pro/climate-deals/newsletters/2024/07/09/climate-h1-scorecard" data-vars-content-id="1f3e0e44-ea92-4c13-99c8-9b9adfd9eeca" data-vars-headline="Expert voices: &#x27;These are white-knuckle times&#x27;" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/climate-deals/newsletters/2024/07/09/climate-h1-scorecard" target="_self">few</a> <a class="gtmContentClick" data-vars-link-text="exits" data-vars-click-url="https://www.axios.com/pro/climate-deals/newsletters/2023/12/19/climate-missed-exit" data-vars-content-id="1f3e0e44-ea92-4c13-99c8-9b9adfd9eeca" data-vars-headline="Expert voices: &#x27;These are white-knuckle times&#x27;" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/climate-deals/newsletters/2023/12/19/climate-missed-exit" target="_self">exits</a>, <a class="gtmContentClick" data-vars-link-text="cool consumer interest" data-vars-click-url="https://www.axios.com/2024/04/03/electric-car-transition-hybrid-consumer-options" data-vars-content-id="1f3e0e44-ea92-4c13-99c8-9b9adfd9eeca" data-vars-headline="Expert voices: &#x27;These are white-knuckle times&#x27;" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2024/04/03/electric-car-transition-hybrid-consumer-options" target="_self">cool consumer interest</a>, and an <a class="gtmContentClick" data-vars-link-text="ESG-investing backlash" data-vars-click-url="https://www.axios.com/2023/04/20/companies-are-laying-low-on-esg-as-backlash-intensifies" data-vars-content-id="1f3e0e44-ea92-4c13-99c8-9b9adfd9eeca" data-vars-headline="Expert voices: &#x27;These are white-knuckle times&#x27;" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/04/20/companies-are-laying-low-on-esg-as-backlash-intensifies" target="_self">ESG-investing backlash</a> has soured all but the most mission-driven investors.<ul><li>&quot;Some VCs have had terrible returns or no realizations,&quot; Ted Brandt, CEO of investment bank Marathon Capital, tells Axios. &quot;These are white-knuckle times.&quot;</li></ul>Why it matters: Chicago-based Marathon Capital focuses on low-carbon energy and climate tech.

Expert voices: 'These are white-knuckle times'

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