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BFD Expert Voices - Climate Deals

BFD Expert Voices

Stanford grad Kevin Bush has built a few 2,200-degree furnaces, and he's earned a Breakthrough Energy fellowship for his work, Alan reports. 

Why it matters: Bush and his co-founder, Caleb Boyd, say they've developed an efficient means to produce clean hydrogen, particularly for the petrochemical and heavy industrial sectors.  

Their company, Molten Industries, has raised around $2.5 million since its launch in 2021. 

Catch up fast: Breakthrough Energy, the climate organization founded by Bill Gates, announced this morning that it has accepted another batch of companies to its fellows program. The fellowship offers funding and mentorship to early-stage startups.

Driving the news: "We basically make reactors that don’t clog. And we take the carbon out as a solid, which can be easily sequestered rather than as a gaseous CO2, which is very difficult to separate from the air," Bush tells Alan.

That carbon could also potentially be sold for an additional revenue stream, Bush says.

Editor's note: This story has been corrected to show that Breakthrough Energy (not Breakthrough Energy Ventures) runs the fellowship program.

1 big thing: Firing up hydrogen for heavy industry

Outdoor apparel brand Patagonia would have been worth between 15x and 20x its EBITDA of roughly $300 million, or north of $4.5 billion, if owner Yvon Chouinard had opted to sell it, an industry banker tells our Retail Deals colleague Richard Collings.

Why it's the BFD: This is the first estimate of what the company, which was private at the time of the sale, is worth.

What they're saying: "I can confirm to you that a third-party valuation put the business at $3 billion, and had we gone public or sold the company, we were likely looking at $6 billion if not more," a Patagonia spokesperson tells Richard.

Catch up fast: The Ventura, California-based company's founder and his family instead opted to transfer 100% of the company's equity to a specially designed trust and a nonprofit organization, with its valuation pegged at $3 billion.

Between the lines: Creating a trust to support environmental causes is something Chouinard has always considered and is paramount to his identity, the source said, even though he could have sold Patagonia for billions.

Details: As for the specifics of the trust, he structured it as a 501(c)(4), which under the tax code is a trust that allows for political donations and political advocacy.

Yes, and: Chouinard wanted the ability to give to political causes without limitations on how the trust spent its money going forward, the source said.

2. The BFD: Patagonia valuation likely above $4.5B

A Patagonia sweater on a Patagonia branded wooden hanger.

Photo: Jakub Porzycki/NurPhoto via Getty Images

Goodwill, the nonprofit group that runs more than 3,200 retail thrift franchises, will roll out its very own online secondhand marketplace, our Retail Deals colleague Kimberly Chin reports.

Why it matters: The resale market is booming as investors pour more money toward the circular economy and purpose-conscious consumers "act" more with their dollars. 

What’s happening: The 120-year-old nonprofit is launching the e-commerce platform, dubbed GoodwillFinds, in partnership with a consortium of Goodwill member stores.

The six founding Goodwill members launching the platform (and providing the inventory for it) represent about 338 stores in the West Coast and Midwest regions.

Goodwill plans to onboard more members every month until the platform taps into its whole network.

3. Goodwill gets into the e-commerce game

Image of a desktop computer with an awning on a green background.

📅 Mark your calendars: Our Axios colleagues will be talking energy security and climate change next Tuesday, Oct. 11, in Washington, D.C. 

Guests include DOE deputy secretary David M. Turk and former FERC chair Neil Chatterjee.

The event kicks off at 8am ET. Register to attend in person or virtually.

👷 Jobs, jobs, jobs: A new analysis from the group Third Way — shared first with Axios — shows that a combination of the laws enacted this year could yield half a million net clean energy-related jobs across the U.S. by 2050, our Generate friend Andrew Freedman reports.

The findings from the center-left think tank, contained in a memo published today, seek to rebut arguments that the Democrats' climate law, for example, could end up costing jobs in energy-producing states.

"One of the big key takeaways here is that no state is going to be left behind in this transition," lead author Isabelle Chan said in an interview. 

4. 🌡️ Temperature check

Illustration of the sand from a sand timer filling the temperature scale on a thermometer.

• Activate Capital, an SF-based climate tech venture and growth equity firm, tells our Pro Rata colleague Dan Primack that it’s raised $500m for its second fund. Institutions made up the bulk of the new investors. https://axios.link/3e5rx32 

• LineVision, a Boston-area developer of overhead line monitoring for electric utilities, has closed a $33m Series C financing round led by Climate Innovation Capital and S2G Ventures. The Microsoft Climate Innovation Fund, Marubeni and existing investors UP Partners, National Grid Partners, Clean Energy Ventures and Zoma Capital participated. https://axios.link/3Ebgtw5 

• Alan Kestenbaum, Gaurav Mehta and Oaktree Capital Management joined to launch IR2 Holdings, a holding company focused on investing in metals, mining and natural resources. https://axios.link/3V2EP0T

• Manor Renewable Energy, a U.K.-based provider of power and engineering services for the offshore industry, has acquired Opus Marine, a German crew-transfer-vessel owner and operator. https://axios.link/3rr2YAX 

• Chemours, a chemistry company, is investing $200m to increase capacity and development of its water electrolyzer materials used in clean hydrogen production. https://axios.link/3Cu8Sr9

• Carbon America, a Colorado-based CCS developer, announced an agreement with Bridgeport Ethanol to develop a CCS project aimed at capturing and storing about 95% of the emissions from a Bridgeport plant in Nebraska. https://axios.link/3rttfhP 

• Generac, a generator producer, will offer EODev’s GEH2 — a large-scale hydrogen fuel cell-powered generator — in North America as part of a larger corporate partnership. https://axios.link/3Ea5m6F

• PowerFlex will install 40 EV Level 2 charging stations and three DC fast chargers in the parking garage at The Music Center’s iconic Walt Disney Concert Hall as part of an agreement with Los Angeles County. https://axios.link/3M4iQ5N

• Western Midstream Partners signed a letter of intent with a subsidiary of Occidental Petroleum to pursue carbon capture development and transportation in Texas’ Delaware Basin and Colorado’s DJ Basin. https://axios.link/3fIEkJu

• Westinghouse Electric Company and Ansaldo Nucleare agreed to work together to develop a next-generation nuclear power plant using lead-cooled fast reactor technology. https://axios.link/3CwqkeN

• NuQuest Energy, a Louisiana-based utility-scale solar developer, has submitted six utility-scale solar projects, totaling 1 GW, to the MISO queue for evaluation. https://axios.link/3UYAqw6 

• Republic Services, the Phoenix-based environmental services company, and Archaea Energy, a Houston-based RNG producer, announced plans to develop an RNG facility at Middle Point Landfill in Tennessee through the companies' Lightning Renewables joint venture. https://axios.link/3UYb8OB 

5. Hot deals

• BlackRock's Martin Small will replace Gary Shedlin as CFO of the world's largest manager while Shedlin remains on as vice chair in a larger reshuffling that the firm says will help it focus on ESG initiatives, per Financial Times. https://axios.link/3M0BSKm

• Atlantic Shores Offshore Wind, a partnership between Shell New Energies and EDF Renewables, appointed Joris Veldhoven as its first CEO. https://axios.link/3fDxpkF

• ArborWorks hired Karla Wahlgren as vice president of corporate operations. Wahlgren was previously a senior director of real estate for a construction rental firm. https://axios.link/3ybSDfE

• Gazelle Wind Power, a floating offshore wind developer, has hired Jason Wormald as CTO. Wormald was previously global head of innovation at Bridon-Bekaert Ropes Group. https://axios.link/3M8lFD0 

• American Electric Power has promoted Juliet Majtenyi to vice president of project solutions, generation, effective Oct. 22. Majtenyi is currently director of generation transformation. She replaces Frank Pifer, who is retiring. https://axios.link/3EjI7ab 

6. It's personnel

🎙 Check out "How It Happened: Elon Musk vs. Twitter Part II: Empire of Risk" — the second installment in Axios' new podcast docuseries about how Musk built his business empire, the rise of Twitter and what the collision between the two could mean for us all. Listen here.

🌉 Megan will be in San Francisco Wednesday through Friday this week. If you'd like to meet up, drop her a line.

🤔 Alan learned yesterday that "half-moon cookies" are a regional, frosted variety of black-and-whites. Hmm.

Thanks to Michael Flaherty and Phoebe Neidl for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and Patagonia vested bankers.

October 04, 2022

1 big thing: Firing up hydrogen for heavy industry