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BFD Expert Voices - Climate Deals

BFD Expert Voices

The emissions tracking software space remains a land grab with well-funded startups taking on the Big Four and Big Tech in a David vs. Goliath battle. TBD on who will actually emerge as a leader in the space, but recent developments include: 

Microsoft added emissions tracking software and a carbon credit network into its 365 enterprise software.

Fifth Wall, a VC firm with an active climate fund, partnered with consulting group EY to offer emissions tracking software for real estate portfolio holders.

Felicis Ventures backed GreenPlaces, an emissions tracking software startup for small and medium businesses, to the tune of $4 million in seed funding.

Sweep, a carbon accounting software startup that has raised nearly $100 million, rolled out a new tool for financial institutions to track emissions while simultaneously taking aim at bigger tech companies like Salesforce for lackluster emissions tracking products.

Carbon Direct raised $60 million from private equity firm Quantum Energy Partners and investment group Decarbonization Partners, the joint vehicle formed by BlackRock and Temasek.

KKR revamped its ESG data collection process after more than a decade. 

Patch raised $55 million in Series B funding from Andreessen Horowitz, Energize Ventures, and Coatue.

Sustain.Life raised $16 million in seed funding co-led by Tapestry Venture Capital and Sustain.Life co-founder Mike Hanrahan, who previously co-founded Jet.com and sold it to Walmart for $3.3 billion.

YvesBlue raised $5 million in seed funding from Illuminate Financial, Aflac Ventures, Tribeca Early Stage Partners, SixThirty, Day One Ventures and Walter Ventures.

1 big thing: Emissions tracking software state of play

Illustration of an upside-down wallet pouring out carbon dioxide molecules

The oil and gas giant BP has agreed to acquire Archaea Energy, one of the nation's largest renewable natural gas producers, for about $4.1 billion, Alan writes.

Why it matters: Renewable natural gas is generally compatible with existing infrastructure, making it one of the easier ways for a fossil company to diversify in the energy transition.

It's also a huge win for Archaea's blockbuster SPAC merger from 2021.

What's happening: BP is acquiring Archaea for $3.3 billion cash and $800 million in net debt.

Archaea, based in Houston, operates 50 renewable natural gas and landfill-to-gas facilities in the U.S.

The deal will boost BP's renewable natural gas (RNG) production by about 50%.

Of note: Archaea Energy and another RNG producer, Aria Energy, went public via SPAC in 2021.

The two companies merged with Rice Acquisition for $347m and $680m, respectively.

The deal valued the combined companies at $1.15b.

Zoom out: RNG can provide meaningful carbon reduction, particularly when it's made from waste such as landfills and food scraps, instead of crops specifically grown for fuel.

2. The BFD: BP RNG for $4.1B

Illustration of a hand painting a gas tank green.

💰 Oil and mining have plenty of climate cash: Big industries could steer far more money into climate-friendly investments without jeopardizing their financial stability or shareholder rewards, our Generate colleague Ben Geman writes, citing a report by Goldman Sachs.

Goldman applied the "spare capacity" concept to green investment, defining it as what's available to deploy "without stretching balance sheets or eliminating return of capital to shareholders."

The private sector is expected to invest about $900b through the next decade. But there's another $900b in spare capacity that it could also spend — much of it concentrated in oil, gas, and mining, as well as software, autos, and semiconductors.

🔍 Walmart and Canoo ties face scrutiny: Walmart this summer announced plans to buy 4,500 electric delivery vans from troubled EV startup, Canoo.

It would seem that Walmart's largest shareholder, Alice Walton, is much closer to Canoo's chief executive, Tony Aquila, than was previously known, per new court filings spotted by Term Sheet.

The issue: whether the relationship unduly influenced the Walmart-Canoo contract, and even Canoo's decision to relocate its headquarters to Walmart's doorstep in northwest Arkansas.

Separately, Canoo this morning announced a binding order from Kingbee, a Utah-based van rental provider, for 9,300 of Canoo's vehicles, with an option to increase to 18,600 vehicles. 

🥸 Unlock your EV with your face: If you're prone to losing your car keys, don't fret:  You won't need them to drive the new Genesis GV60 electric SUV. All it takes is your face — and your finger, our What's Next friend Joann Muller reports.

The same biometric technology that unlocks your iPhone is now available in a car, meaning you can leave the key fob at home.

🦜 A box to monitor birdsong: Axios Tampa Bay reporter Ben Montgomery recently installed a device called the Haikubox on the side of his house. It identifies nearby birds by their songs.

The data collected by each Haikubox can help tell a much bigger story — about migration patterns when species are active and environmental changes. (Alan's thought: Doesn't this mean they should pay us to install the box? Or at least not require an annual subscription?)

Ben's visitors: A barred owl and common nighthawk after dark, plus a downy woodpecker, a blue-gray gnatcatcher, as well as palm warblers and rose-breasted grosbeaks.

3. 🌡️ Temperature check

Illustration of an earth emoji combined with a sick face emoji.

• Solarize Energy Solutions, a Germany-based microgrid operator, raised €4.3m (~$4.2m) in seed funding led by Point Nine. Existing investor Picus Capital also participated in the round. https://axios.link/3SddjuV

• FlyFeed, an Estonia-based insect farming startup, raised $3m in seed funding from angel investors. https://axios.link/3S2nzWQ

• FoodChain ID Group, an Iowa-based tech of safety, quality and sustainability tech for food and agriculture, has acquired Cosmocert S.A., a Greece-based organic certification and inspection company. https://axios.link/3VtcsJL 

• Uranium Energy, a Texas-based mining company, has completed its acquisition of the Roughrider uranium development project in Saskatchewan from a subsidiary of Rio Tinto. Rio Tinto has received $80m in cash and 17.8m in Uranium Energy shares, valued at $70m. https://axios.link/3s2Os2A 

• Mash Makes, a biofuels developer, has signed a five-year purchase agreement with Carbonfuture, a Germany-based carbon credits marketplace. https://axios.link/3VCgL5A 

• Automotive Cells Company, a France-based manufacturer of automotive batteries launched by Stellantis and TotalEnergies, and ProLogium Technology, a Taiwan-based developer of solid state lithium-ceramic batteries, have signed an MOU to develop an EV solid-state battery. https://axios.link/3T6mBdK 

• Cargill Metals, a tech and services provider in the ferrous industry, and Blastr Green Steel, a Norway-based green steel developer, have signed an MOU to manufacture steel in the Nordic region without the use of fossil fuels. https://axios.link/3S2IMjr 

• H2 Green Steel, a Sweden-based green steel producer, has selected SMS group, a Germany-based provider of tech and services for the steel industry, to supply process technology for its green steel plant in Northern Sweden. https://axios.link/3s3B91C 

• Tidewater Renewables, a Calgary-based fuels developer, announced that its subsidiary Rimrock Renewables has entered into a 20-year offtake agreement with FortisBC Energy, a Vancouver-based natural gas and electricity provider. https://axios.link/3D39JiI 

• Renault Trucks, part of the Volvo Group, announced an agreement with Kleuster, a France-based electric cargo bike manufacturer, to help produce and distribute Freegônes e-cargo bikes by assembling them at Renault Trucks' Vénissieux industrial site. https://axios.link/3eFq6c3 

Schlumberger, the Houston-based oilfield services provider, has entered into an agreement with RTI International, a Durham-based nonprofit research institute, to scale Schlumberger’s non-aqueous solvent technology for absorption-based carbon capture. https://axios.link/3ezHizM 

4. Hot deals

• Watershed, a carbon software startup, hired BetterClimate co-founders Spencer Hall and Aresh Mahtabfar to continue building internal sustainability software under Watershed's umbrella. https://axios.link/3rRz2Or

5. It's personnel

🌞 Happy Monday! Let's kick things off.

✈️ Megan's October of travel continues with a stop in Seattle this week. Let her know if you're in town and would like to meet up!

👨‍👧 Alan is home with the kiddo today, who's recovering from RSV — fresh on the heels of a cold she'd also had two weeks earlier. 

Thanks to Michael Flaherty and Carolyn DiPaolo for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and emissions software developers.

October 17, 2022

1 big thing: Emissions tracking software state of play