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BFD Expert Voices - Climate Deals

BFD Expert Voices

Voyager Ventures, an early-stage climate-focused VC fund, raised $100 million for its inaugural fund, its founders tell Megan. 

Why it matters: More private money is flowing into climate, and limited partners and institutions are looking to get in at the earliest stages.

Driving the news: Voyager's $100 million Fund I comes with a heavy dose of Silicon Valley and corporate leadership in its LP base.

General partners at NEA, Insight Venture Partners and USV have all contributed to the fund.

Former GE CEO Jeff Immelt, Lyft CEO Logan Green, Shopify founders Fiona McKean and Tobi Lütke are investors, and Lowercarbon Capital's Chris Sacca is also an LP.

Between the lines: Voyager will invest in pre-seed, seed and Series A stage companies. It also has a follow-on fund that can participate in larger Series A or Series B deals.

For LPs, Voyager is essentially conducting due diligence on their behalf. Voyager founder Sierra Peterson tells Megan there isn't a formal partnership in place between her fund and her investors' funds.

"We have credibility with the GPs, and we can bring many of those GPs into the deals we find most compelling," Peterson says.

Details: Voyager is intentionally looking at early stage companies that have academic or lab-based backgrounds but haven't yet commercialized their fundamental technologies. 

The strategy de-risks one of the biggest areas of concern for early-stage technical investors by validating the scientific portion of the company's value proposition.

With backgrounds in economics and technology, respectively, Peterson and her co-founder Sarah Sclarsic are relying on nearly three decades of experience to bring "unsexy" climate technologies to market, fast.

The fund has made five investments to date, including one in a stealth energy management software company in the Netherlands that Peterson says has helped reduce Europeans' energy consumption in recent weeks.

The bottom line: Look for deep-pocketed institutions and individuals to continue investing in early-stage specialist climate funds as the sector continues to gain mainstream momentum.

1 big thing: Voyager books $100M inaugural fund

Illustration of a hand depositing a one dollar bill into the Earth through a slot. 

Brilliant Planet Limited, a startup that's using algae for carbon capture and sequestration, closed a $12 million Series A, Alan reports. 

Why it's the BFD: Brilliant Planet says its "nature-based approach" offers a cost-effective means of capturing greenhouse gas emissions from the ambient air. 

The details: Union Square Ventures and Toyota Ventures led the Series A. 

Future Positive Capital, AiiM Partners, S2G Ventures, Hatch and Pegasus Tech Ventures also participated.

The funding round will support the engineering design of a 74-acre commercial demonstration facility in the Sahara desert in Morocco, Brilliant Planet says. 

The company currently operates a 7.4-acre trial facility in the region.

How it works: Brilliant Planet captures carbon by taking seawater — already nutrient- and carbon-rich — and seeding it with local algae, growing the algae, harvesting it, drying it, then burying it.

"It’s very high-science but low-tech," CEO Adam Taylor tells Alan. "We spent a lot of time stripping out the operational complexity, finding ways to automate things in the desert."

By sequestering the algae in coastal deserts, Brilliant Planet says it is avoiding the kinds of biodiversity and food-scarcity conflicts that other efforts focused on cultivating forests have encountered. 

By the numbers: Brilliant Planet's approach, if successfully commercialized, will support a carbon price just over $100/ton, a source tells Alan. 

Permits in the European Union's carbon market have been selling for roughly that amount.

Of note: Brilliant Planet was previously known as Susewi, which explored algae's potential for food applications.

Susewi held three seed rounds from 2017-2019, totaling $9.5 million, a Brilliant Planet spokesperson says.

What's next: Brilliant Planet is planning a Series B in the second half of 2023, Union Square Ventures tells Alan. 

Construction of the commercial demonstration plant is set to begin mid-2023.

2. The BFD: Algae farmer raises $12M Series A

Illustration of algae forming the shape of a dollar sign.

A trio of marquee clean-energy players are enabling PJM Interconnection, the nation's largest competitive wholesale electricity market, to reduce load by expanding demand-response to residential customers' thermostats.

Why it matters: Demand-response programs can help utilities and others avoid costly upgrades by enabling them to rein in demand at peak times, and help utilities and grid operators make better use of smart devices.

The details: Google Nest, Voltus and Resideo (NYSE: REZI) are introducing this capability through a "bring your own thermostat" program.

The program is being rolled out to select customers served by PPL Electric Utilities in Pennsylvania.

The effort will allow PJM Interconnection to dial back customers' HVAC systems when load is peaking, giving the grid operator control of one of the most energy-hungry consumer systems on the grid.

Homeowners who participate will get a $50 e-gift card and potential further benefits, the program's organizers tell Alan.

Catch up fast: Voltus has developed software technology to help manage distributed resources. The company in December announced plans to go public via SPAC, with a valuation of $1.3 billion.

Resideo, a spinoff of Honeywell, provides smart devices and other home tech, as well as a distributed energy resource management system.

Go deeper: With the launch, the three companies say they're focusing on electricity markets that don't already have incentive programs in place for demand-response.

They estimate that about half of electricity customers in the U.S. don't have access to a thermostat-related demand-response program, Google Nest and Resideo tell Alan.

What they're saying: "As the grid is evolving, as there’s more renewables, there's more need for controllable load at the wholesale market level," Dave Oberholzer, a general manager at Resideo, tells Climate Deals.

"The program we're doing here is to get experience in the wholesale markets with distributed residential load," he adds, "so that when the time comes, and when there's solar and wind that need to be accounted for as far as variable generation, there's variable load there that's available at the wholesale market."

3. Google Nest, Voltus, Resideo bring BYOT to PPL

Illustration of a pattern of light switches, all of them turned on except one.

What makes a data center green?: Between energy usage and reliance on rare earth minerals, not much. But that won't stop Aligned Data Centers and its new decarbonization pledge, which includes tracing the origin of its materials, equipment and devices. 

Any company using an Aligned Data Center will have access to the reports and can add the calculations to their overall carbon footprint. 

If you see protesters in lab coats: More than 1,000 researchers across 25 countries are apparently joining the "Scientist Rebellion" this week. 

In the wake of the latest IPCC report, they'll be "taking disruptive, non-violent actions" calling for urgent responses to climate change — and, as a spokesperson puts it, "acting like our house is on fire. Because it is."

Hot topic for you Hill watchers: The Senate Energy and Natural Resources Committee tomorrow is holding a hearing on the "Scope and Scale of Critical Mineral Demand and Recycling." 

Scheduled witnesses include Joe Britton, head of the Zero Emission Transportation Association; R. Scott Forney III from General Atomics; J.B. Straubel of  Redwood Materials; plus folks from the Wilson Center and Energy Department.

🎂 Paper anniversary: A sincere happy birthday/happy anniversary to Canary Media, which is celebrating the one-year mark on the climate and clean-energy beat.

4. 🌡️ Temperature check

Illustration of a thermometer shaped like a smoke stack with smoke spewing out.

Blue Current, a Hayward, California-based solid-state battery developer, raised $30m from Koch Strategic Platforms. http://axios.link/TeZn 

The Wells Fargo Innovation Incubator, co-administered by NREL, announced the first cohort focused on demonstration projects. BlocPower, CorePower Magnetics, Kit Switch, NineDot Energy and Community Energy Labs will each receive up to $250,000 in non-dilutive funding to support infrastructure for their projects. http://axios.link/Z3gA

Intermediate Capital Group raised €1.5b (~$1.6b) for the private equity firm's first infrastructure fund, ICG Infrastructure Equity 1, which will seek investments aligned with the UN's Sustainable Development Goals. http://axios.link/zeph

Enviva Inc. (NYSE: EVA), a wood bioenergy producer, will invest about $250m to build a new wood pellet production plant in Bond, Mississippi. http://axios.link/dNR1

Nuveen is partnering with the U.K. charity Shell Foundation to invest $100m through the next five years in climate change mitigation, climate resilience and energy access. The funds will come from Nuveen's $218m Global Impact Fund and Nuveen's parent, TIAA. http://axios.link/e4PI

Nucor Corporation (NYSE: NUE) has committed to a $15m PIPE to support SMR startup NuScale Power's SPAC merger with Spring Valley Acquisition Corp. (Nasdaq: SV, SVSVW). http://axios.link/EjRr

Sol-REIT is providing $9m in financing to solar developer DIASASP Holdings to install projects totaling 7.4 megawatts at three school districts in New Jersey. http://axios.link/3Scx

Sphere 3D Corp. (Nasdaq: ANY), a bitcoin miner, says it is joining the "Crypto Climate Accord" and has contracted to purchase 1m carbon offset credits delivered over the next 14 months. http://axios.link/DeuB

Westinghouse Electric Company signed MOUs with three companies in Slovenia — Numip, Elmont and SIPRO inženiring — to build AP1000 nuclear reactors. http://axios.link/z8t8

Chevron (NYSE: CVX) says it's joining the Global Centre for Maritime Decarbonization, a nonprofit established with support from the Maritime and Port Authority of Singapore. http://axios.link/fTGM

Sweden’s Bluewater, a company that makes residential water purification systems, is merging with Denver-based FloWater, maker of the FloWater refill stations commonly found in gyms and schools. The value of the merger was undisclosed. http://axios.link/Gs1d

Rivian Automotive, Inc. (Nasdaq: RIVN) produced 2,553 vehicles at its manufacturing facility in Normal, Illinois, in Q1 and delivered 1,227 vehicles during the same period, which the company says is in line with its expectations. http://axios.link/QTcC

Pacific Gas & Electric says it’s expanding its Enhanced Powerline Safety Settings to all distribution powerlines in high-fire-threat areas this year. The technology, introduced in a pilot last summer, automatically shuts power if it detects a potential threat to the electric system. http://axios.link/IqEU

5. Hot deals

Laurel Buckner joined Riverstone Holdings as a managing director focusing on decarbonization. Buckner was previously a managing director at Seattle-based venture debt and equity firm WestRiver Group. http://axios.link/91CL

Ares Management (NYSE: ARES) has appointed Daren Moss global ESG lead of its real estate group. Moss joins Ares from Brixmor Property Group (NYSE: BRX), a real estate investment trust. http://axios.link/8FsD

Advanced Energy (Nasdaq: AEIS) appointed Elizabeth K. Vonne executive vice president, general counsel and corporate secretary. Vonne joins the company from Mesa Laboratories, Inc. http://axios.link/tm3X

WiTricity has hired former Boeing and Ford Motor Company executive Joe Benz as the startup's first general counsel and chief legal officer. http://axios.link/YsLO 

6. It's Personnel

📉 Situational Awareness: Hindenburg Research, whose report sparked the federal fraud investigation of Nikola, published a new report this morning on Mullen Automotive, which made a splash at the LA Auto Show in November. Hindenburg declares it "Yet Another Fast Talking EV Hustle." 

🌼 The desert's super bloom is well underway, so Megan took a drive to take it all in. It's too bad the dogs are colorblind, but the humans appreciated the red, gold and purple blooms! 

🏆 WASHINGTON, District of Columbia (April 6, 2022) — Climate Deals co-author Alan Neuhauser won his NCAA bracket. "I'm thrilled and honored," he said. He plans next to expand to stock picks.

Thanks for reading Climate Deals! Please share with your co-workers, peers, and very tired bankers on these deals.

April 06, 2022

1 big thing: Voyager books $100M inaugural fund