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BFD Expert Voices - Climate Deals

BFD Expert Voices

More than a dozen startups pitched investors at the Greentown Labs climate tech summit in Boston last week, Alan writes.

Why it matters: If you're curious what ideas are coming to market, we've got the rundown, organized by category.

AeroShield: "Super-insulating" porous glass to insulate windows.

EnviroPower: "Smart" boiler that generates heat and on-site electricity.

MicroEra Power: Thermal energy storage tech that uses a "novel active material" that stores heat and cooling.

Spare-it: Waste-reduction tracking and gamified sustainability software for workplaces.

Zero: A platform for residential retrofits.

Mantel: "Molten borates" for liquid-phase carbon capture.

Skytree: Decentralized direct air capture technology.

Adaviv: Mobile sensor technology for monitoring cropland.

Bodhi Solar: Software for solar-panel monitoring, customer service and business development.

GenH: A modular system to electrify nonpowered dams and canal heads, without any fixed infrastructure.

Sol Clarity: Transparent "electrodynamic" screens that removes dust from solar panels.

SolarKal: An online marketplace connecting organizations with solar energy providers.

Raise Green: A crowdfunding and crowd-investing site for energy projects.

H2Ok Innovations: Software and sensors to track liquid systems and reduce water, chemical and energy consumption and boost production quality.

MoveEV: A vehicle fleet electrification service.

1 big thing: Your periodic FOMO cheat sheet

Illustration of a lightbulb with a map of the earth on it

Synton Capital Partners plans to raise as much as $500 million for a first fund that will invest in underrepresented founders and ensure they retain majority ownership of their own businesses, the company tells Alan exclusively.

Why it's the BFD: Big corporations and government agencies regularly set aside a portion of a contract for a minority business enterprise, a status that can be easily lost.

Driving the news: Synton is seeking $250 million to $500 million. It plans to announce formal fundraising efforts by January, co-founder Ron DeLyons tells Alan.

Details: DeLyons is CEO of Creekwood Energy, an Ohio-based energy services provider.

His co-founder and fellow managing partner is Chris Morris, former COO of Bonaventure, a REIT based in northern Virginia. 

"We are in discussions with a couple of Fortune 100 companies," DeLyons says.  

The firm's ideal result would be an anchor investor committing $250 million to $500 million.

Zoom in: The fund will focus on mid-stage enterprise companies on track to make $10 million to $100 million in revenue within 18 to 24 months.

Focus sectors will be energy, health care, financial services, manufacturing and affordable housing.

Of note: The National Minority Supplier Development Council is a principal certification body for minority business enterprises, or MBEs.

It certifies based on racial and ethnic identities, specifically businesses at least 51% owned by those who are "at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic or Native American," per its website.

There are also local, state and federal certifications. The U.S. Small Business Association's 8(a) program, for example, sets broader criteria to qualify as "socially and economically disadvantaged." 

Between the lines: Founders regularly relinquish the majority of their company during fundraising. 

"In our financial structure, we preserve the equity ownership of the MBE so that, post-money or post-investment from us, they still qualify as minority-owned," DeLyons said.

"The only efficient way and economic way to close the wealth gap is through ownership."

One key thing: "The question was posed to me: 'If Creekwood had access to $20 million to $25 million, structured in a way that it didn't negatively impact your ability to certify, how would it change your business model?'" DeLyons said. "It would have a dramatic change. That's where the idea was born." 

2. The BFD: New VC fund targets minority majority

Illustration of a hand in a business suit and a hand wearing a green fundraising bracelet shaking hands

Data: Crunchbase; Note: Includes seed, venture, corporate venture, and private equity to venture-backed companies; Table: Axios Visuals

We've seen the data: VCs invest in minority-owned businesses at a dismal rate. But the data is noisier than it seems.

Why it matters: Minority founders face an even steeper climb to raise money than it may appear. 

The intrigue: White men overwhelmingly occupy the top ranks of venture capital and private equity. 

They tend to invest in companies led by people who look like themselves.

That means companies with Black, Latino, Indigenous or Asian founders — not to mention women — often find themselves locked out of fundraising.

Meanwhile: On the rare occasions a minority founder does win over investors, they — like many founders — often end up forking over a majority of their equity while fundraising.

The bottom line: For minority founders, it's not just about undercapitalization, Ron DeLyons, of Synton Capital Partners, tells Alan.

A "lack of access to non-equity-based capital" engenders a "lack of opportunity to compete." 

It prevents companies that were once minority-owned from winning the MBE contracts specifically established to help close the wealth gap.

3. The double set of locks blocking minority founders

🚿 Red lines on greenwashing: A UN-sponsored panel laid out what should define credible net-zero emissions pledges and pathways for companies, cities and states, Axios' Andrew Freedman writes in Generate.

The report, released at COP27, aims to bring order and trust to the murky world of net-zero target setting and prevent greenwashing.

💸 Throwing money at the problem: Emerging markets and developing nations (other than China) will need $1 trillion annually in external climate finance by 2030, per a report also released at the climate summit.

👀 What we're watching: Fraught talks about how rich industrial powers should compensate vulnerable nations for climate harms. Axios' Ben Geman has the details.

😬 A new National Climate Assessment: "Over the past 50 years, the US has warmed about 68% faster than the planet as a whole."

U.S. emissions would need to fall 6% annually to meet the country's 2050 net-zero target, per the draft released by the Biden administration. 

On the plus side, "many cost-effective options are feasible now that have the potential to substantially reduce emissions over the next decade."

🤔 Reconsidering our climate goals: "The world has already breached 1.2C of warming. Given the extraordinarily unfavorable odds staying on the near side of 1.5C, after years of rallying around this number, does it still makes sense as a goal?" 

That's the question posed by Eric Roston in Bloomberg Green. He eventually answers his own question. 

"There are many, better alternative questions: 'How much lower than last year will your personal emissions be?' 'What’s the impact of voting in elections on climate progress?'”

🥬 The future of lettuce: No, not lettuce-as-a-service — yet. But climate change is driving a big shift toward indoor farming.

"Greenhouses enable 'proximity growing' — a hot industry term —  where lettuces are shipped shorter distances to markets, saving on  freight costs and emissions," Axios' Jennifer A. Kingson reports for What's Next.

"The rise of indoor growing  comes with a new category: 'Teen' lettuce, which is larger and crispier than baby greens, yet more tender than a mature head." Let us know if that teen lettuce starts talking back.

4. 🌡️ Temperature check

Illustration of an earth in space covered in red and blue meteorological color lines.

• Foxconn will invest $170m into Ohio-based electric truckmaker Lordstown Motors. https://axios.link/3UIe6Gd

• Agriconomie, a France-based e-procurement provider for farmers, closed a €60m (~$60m) Series B from Treïs Group, Temasek, Aliment Capital and Eurazeo. https://axios.link/3hlwsye 

• Infinitum, a Texas-based developer of air core motors, received $30m in growth capital from Riverstone Holdings Latin America, Alliance Resource Partners, Caterpillar Venture Capital and the Cottonwood Technology Fund. https://axios.link/3tdQtti 

• KKR agreed to invest $400m in Serentica Renewables, an India-based clean energy provider for energy-intensive, hard-to-abate industries. https://axios.link/3UmheHM 

• Chesapeake Utilities purchased 100% of the membership interest of Planet Found Energy Development for $9.4m. Planet Found is a Maryland-based developer of poultry litter management tech for fertilizer and biogas. https://axios.link/3NLBO1W 

• CastleRock Green Energy, an NYC-based renewable energy and infrastructure fund, announced plans to build biofuel production facilities near Shelton, Washington, an investment of up to $400m. The plant will use production technology from Ensyn, an Ottawa-based “bio-crude” producer. https://axios.link/3UFQm5i 

• Ontario Power Generation sold its Kipling site in Toronto to Kinectrics and the City of Toronto for $200m CAD (~$148m). Kinetrics is a Toronto-based life-cycle management provider for electricity generation facilities. https://axios.link/3EfBZzm 

• iSun, a Vermont-based energy infrastructure EPC, entered into a debt financing agreement for up to $25m in senior secured convertible notes with a single institutional investor. The proceeds will be used to repay debt. https://axios.link/3zSMKFh 

• On.Energy, a Miami-based energy storage developer, is installing about 39 MWh at 11 airports in Latin America. Another five such sites are operational or nearing completion, for 65 MWh total. https://axios.link/3DMNBZj 

• Nikola, the electric truck maker, and ChargePoint, the EV charging provider, announced a partnership enabling Nikola to resell ChargePoint infrastructure and software to fleet customers. https://axios.link/3zYcWy7 

• Chevron and JERA, a Japan-based joint venture between Tepco and Chubu Electric Power, signed a joint study agreement to potentially co-develop lower carbon fuel in Australia and to study liquid organic hydrogen carriers in the U.S. Both companies have invested in Hydrogenious LOHC Technologies, based in Germany. https://axios.link/3hqHRwP 

• Aris Water Solutions, based in Houston, entered into an agreement with Chevron and ConocoPhillips to develop water-treatment tech for potential reuse. https://axios.link/3tex5wk 

• ACEN divested from the South Luzon Thermal Energy coal plant in the Philippines, via the Asian Development Bank’s “energy transition mechanism.” Under the mechanism, the coal plant's operating life of up to 50 years will be halved, and ACEN has committed to incorporating cleaner technology by 2040. https://axios.link/3NNPdX7 

• Global Atomic, a Canada-based uranium developer, commenced underground development at the Dasa Uranium Project in the Republic of Niger. https://axios.link/3Ee8T3i 

• The Atlantic First Nations Water Authority in Canada has become the country’s first Indigenous Water Utility, per a transfer agreement signed Monday. https://axios.link/3NLn437 

• LiqTech International, a Denmark-based manufacturer of specialized filtration products, received an order for a wastewater treatment system from the metal processing industry in Denmark. https://axios.link/3hrNVFm 

• Lectron, an EV charging station manufacturer, entered into a retail partnership with Do it Best, the Indiana-based home improvement distributors, to make Lectron EV chargers and adapters available for purchase via Do it Best stores. https://axios.link/3DOBlY3 

• Cerro de Pasco Resources, a Canada-based minerals developer, announced that its subsidiary H2-Sphere will move ahead with patent applications and development for converting mining waste into green hydrogen and other by-products. https://axios.link/3UcE6tj 

5. Hot deals

• Duke Energy is promoting Kendal Bowman, vice president of regulatory affairs and policy for North Carolina, to state president, effective Jan. 1. Bowman will succeed Stephen De May, who is retiring. https://axios.link/3zUzr7m 

• Energy Vault Holdings, the California-based grid-scale storage developer, has hired Jan Kees van Gaalen as CFO, effective Nov. 16. Van Gaalen was previously interim CFO at OneSpan. He replaces interim CFO David Hitchcock. https://axios.link/3hflOsI 

• Clean Energy Ventures hired Yi Jean Chow as investment principal and Victoria Martins as community manager. Chow was previously an investment principal at Future Energy Ventures, and Martins was previously an advocacy manager at Project Bread. https://axios.link/3TfsDrq

• Ultra Safe Nuclear, a Seattle-based advanced nuclear energy developer, hired Alexander Superfin as senior vice president of project development. Superfin was previously nuclear power president at Worley. https://axios.link/3he6ixd 

• Verdagy, a California-based developer of electrolyzer tech for industrial markets, hired Peter Cousins as COO and Kirk Edelman as chief commercial officer. Cousins was previously senior director of cell engineering at Tesla, and Edelman was chief commercial officer of Safari Energy. https://axios.link/3EhiXc1 

• Essential Utilities, based in Pennsylvania, hired Jeanne Russo as vice president in communications, and Sumit Nair as vice president and chief information officer. Russo was previously director of financial communications at Qurate Retail Group. Nair was previously chief information officer for GeoBlue. https://axios.link/3EfCNV1 

• Terra Sound, an Ohio-based software developer for fiber-optic sensing for critical infrastructure, hired Trent Peugh as CEO. Peugh was previously president and CEO of Irth Solutions. https://axios.link/3DOOfp2 

• FPX Nickel, a Vancouver-based exploration and development company, has hired Nader Mosavat as CTO of its CCS subsidiary, CO2 Lock. Mosavat was previously faculty director at Muscat University. ​​https://axios.link/3fITqyZ 

• New Jersey Resources hired Lori DelGiudice as senior vice president of human resources. DelGiudice was previously vice president of HR at Honeywell International. https://axios.link/3fOZRAw 

6. It's personnel

🗳️ It's Election Day Tuesday, and a lunar eclipse to boot.

🗓️ Reminder to join Megan Nov. 10 for an exclusive, live conversation on emerging markets' investment trends with Global Ventures Managing Partner Noor Sweid. RSVP here.

🏃🏻‍♀️ Megan is still taking it easy after her race Saturday. She does not recommend racing a trail run without any prior experience in trail running. 

📺 Alan is blown away by "Andor." Easily a top-three show of 2022. (The other two: "Better Call Saul" and "Reservation Dogs.")

Thanks to George Moriarty and Phoebe Neidl for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and registered voters.

November 08, 2022

1 big thing: Your periodic FOMO cheat sheet