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BFD Expert Voices - Climate Deals

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Parisians are trading their vélos for scooters électrique: The investors who once buoyed America's e-scooter and bike-share companies are moving their capital to Europe, Alan reports.

Why it matters: America's cities aren't exactly known for being bike- and scooter-friendly. But micromobility investment in Europe has overtaken even Asia — underscoring how big this boom is.  

Driving the news: Investors this year have poured more than $1 billion into e-scooter and bike-share services in Europe, per PitchBook data.

Investment in the U.S., by comparison, has amounted to just $632 million.

Deal count in the U.S. is also less than half that in Europe. 

Meanwhile: Micromobility investment in Asia has plummeted. 

The continent drew 60% of global investment in the sector before the pandemic — but barely 10% since 2020, per a McKinsey report this summer.

What's happening: Policy and market conditions are driving the shift.

European leaders — true to form — have taken assertive steps to make cyclists and riders feel safer, such as by installing protected bike lanes. 

European micromobility companies are generally newer than those in Asia, and they are in a period of rapid growth and acquisitions.

Finally, a growing number of building-specific bans on e-bikes and e-scooters — due to deadly battery fires — is putting a damper on the U.S. market.

Of note: E-scooters are the most popular mode of micromobility, and retail sales of the vehicles are booming in Europe. France, for example, saw a 42% jump in e-scooter sales from 2020 to 2021.

👀 What we're watching: Helbiz, a micromobility provider based in NYC, this morning announced it’s cutting staff by 15%.

Helbiz’s stock late this morning was trading at about $0.18 per share on Nasdaq — down from a peak of $19.48 in September following its SPAC merger, as Megan has reported.

Meanwhile, one of the most prominent e-scooter providers in the U.S., Bird, last week told the SEC that it had overstated its revenue the past two years, per The Verge.

Bird in September formalized its removal of Travis VanderZanden as CEO, though he remains chairman of the board.

1 big thing: E-scooter investors dump the U.S. for Europe

French recycling startup Fairmat has raised €34 million in Series A funding led by Temasek and investment firm CNP, Megan reports.

Why it's the BFD: Carbon fiber is a difficult-to-recycle material that is also instrumental for the success of a growing number of companies relying on recycled materials to meet net-zero goals.

Details: Temasek and CNP will get board seats as part of the all-equity deal, Fairmat CEO Ben Saada tells Megan. 

Existing investors Pictet Group, Singular and The Friedkin Group International also participated in the round. CNP is controlled by France's Frère family.

How it works: Fairmat operates a sorting and recycling center it opened in October that uses robots to process difficult-to-recycle materials like carbon fiber.

It expects to have 100 robots in its initial center that will process 200 metric tons per year in 2023.

It also plans to expand to other types of materials found in electronic waste and vehicles.

State of play: Materials recycling is growing as new resources dwindle due to supply chain issues around the world.

EV battery production, for example, is one industry that has been hampered by recent metals and materials constraints that a handful of other recycling companies are attempting to recycle and reuse.

Many consumer companies are also looking to tap recyclers to produce textiles for clothing and footwear in a bid to hit net-zero goals.

The bottom line: There are more willing buyers of recycled materials than facilities able to sort and process them.

2. The BFD: Carbon fiber recycler nets €34M

Illustration of three robot arms in the shape of a recycling symbol.

Data: PitchBook Data; Chart: Axios Visuals

After a banner year of M&A activity, consolidation in the food waste sector is expected to plateau, Megan reports.

Why it matters: A healthy exit market goes a long way in winning over investors in new industries, and a slowdown in M&A activity can dampen investor enthusiasm. 

By the numbers: Last year saw one of the largest increases in M&A activity in the food waste sector to date, with nine deals totaling more than $173 million in publicly disclosed value.

In 2022, the sector has seen just three M&A deals so far.

Yes, but: Investors and founders expect consolidation within niches of food waste as each area matures and growth levels off.

The food industry dynamic is "really prone for network effects because it's all so connected," Dan Khachab, CEO of restaurant food waste management startup Choco, tells Megan.

Khachab notes there aren't many players large enough to roll up smaller competitors, as was the case in grocery delivery when Misfits Market acquired Imperfect Foods for an undisclosed amount in September.

3. Food waste's M&A plateau

👍 👎 The big takeaway from COP27: The climate summit produced a groundbreaking deal to create a fund for wealthy industrial countries to compensate poor nations for the ravages of climate change.

But diplomats did not agree to strengthen prior calls for phasing out coal by also doing so with oil and natural gas. Axios' Andrew Freedman and Ben Geman have the rundown on key conclusions and what to watch.

🛢️ Oil producers block more ambitious action: The agreement recognizes that climate impacts are worsening — and already beyond the coping ability of many developing countries, Andrew and Ben also write.

Yet the text did not ratchet up the level of ambition for securing more emissions cuts on a faster timeline than was contained in the Glasgow Accord last year.

Attempts to refer to phasing out all fossil fuels ran into a brick wall of major oil producers, and the final text does not mention having emissions peak by 2025.

✈️ Name and shame: Delta Air Lines and Credit Suisse are among the dozens of companies that claim to be carbon neutral, even though they’re using “the cheapest and least effective carbon offsets to burnish their green credentials,” per a new investigation from Bloomberg Green.

The big winner in all this: A company called EKI Energy Services, which has seen its valuation soar from $10 million to $1 billion — in just one year.

🧟 Thanksgiving conversation starter: “Human composting is the hot new thing in death care,” our colleague Alex Fitzpatrick reports.

It’s especially gaining traction among younger folks. Composting a body apparently saves about 1.2 metric tons of carbon compared to traditional burial or cremation. Not that we've measured it ourselves.

4. 🌡️ Temperature check

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

• Vow, an Australia-based cultivated meat company, raised $49.2m in Series A funding from PeakBridge, Blackbird, Prosperity7 Ventures, Toyota Ventures, Square Peg, Grok Ventures, Cavallo Ventures, Tenacious Ventures, HostPlus Super LP, NGS Super and Pavilion Capital. https://axios.link/3gihnNK

• Freight Farms, a vertical farm company, raised $17.5m in Series B3 funding co-led by Aliaxis SA and Ospraie Ag Science. Spark Capital, Stage 1 Ventures and Alkaline Partners also participated in the round. https://axios.link/3UQ8Mkf

•Peptyde Bio, an ag tech company, raised $1.2m in pre-seed funding from Danforth Technology Company, St Louis Arch Angels, BioGenerator Ventures and QRM Capital. https://axios.link/3GJZ2Ej

• Cultimate, a cultivated fat startup, raised €700,000 (~$725,000) in a pre-seed funding from Big Idea Ventures, ProVeg International and Realum.cloud. https://axios.link/3EG5ivc

• HG Ventures, the Indianapolis-based corporate venture arm of the Heritage Group, announced an undisclosed investment in Currents, an Oregon-based recycled EV battery marketplace. https://axios.link/3EQ6YCw 

• The Ontario Teachers' Pension Plan Board is the frontrunner to buy a 25% stake in Scottish and Southern Electricity Networks, a U.K.-based transmission and distribution provider, which could have an enterprise value north of £10b (~$11.8b), per Bloomberg. https://axios.link/3gnKCPb 

• Amp Americas, a Chicago-based biogas producer backed by EIV Capital and Generate Capital, is seeking to fetch around $1b in a sale, per Reuters. https://axios.link/3TQxOhX

• Continuum, a Los Gatos, California-based metal recycling company, raised $36m from Ara Partners. https://axios.link/3Enufdo

• Starwood Energy Group is seeking a buyer for Canadian biogas producer BerQ RNG, per Reuters. https://axios.link/3TQxOhX

• BKV Corp., a Denver-based natural gas producer operating in the Barnett and Marcellus shales, filed for a $100m IPO. https://axios.link/3EPczsF

• Next Renewable Fuels, an Oregon-based developer of renewable fuels from feedstock, agreed to go public at an implied $530m value via Industrial Tech Acquisitions II. Next backers include United Airlines Ventures. https://axios.link/3tKWjTl

• Ameresco, a Massachusetts-based energy efficiency services provider, acquired a 5 MW, three-turbine wind farm in West County Cork, Ireland. https://axios.link/3XjWRgk 

• ESR Group, the Hong Kong-based real asset manager, announced that its subsidiary ARA is closing a $1b infrastructure fund with the Export-Import Bank of China. https://axios.link/3hY9Dkr 

• Schlumberger Holdings commenced an offer to purchase for cash up to an aggregate purchase price amount of $500m of certain notes. https://axios.link/3XlCLlL 

• ABB E-mobility, a Zurich-based EV charging technology provider, signed a pre-IPO private placement of about CHF200m for newly issued shares. Interogo Holding, a Swiss foundation-owned international investment group, Moyreal Holding, a Swiss single-family office, and ABB E-mobility chairman Michael Halbherr participated. https://axios.link/3OmPgJZ 

• Rare Element Resources received a $4.4m grant from the Wyoming Energy Authority for the company’s rare earth element processing and separation demonstration plant project in Upton, Wyoming. The total project cost is about $44m, with the U.S. Department of Energy providing about $21.9m. https://axios.link/3gp52aG 

• Campbell Soup, based in New Jersey, announced a 12-year virtual renewable PPA to purchase electricity and associated renewable energy credits from a 115 MW share of Enel North America’s Seven Cowboy wind project in Oklahoma. https://axios.link/3TVj3dJ 

• Ampaire, the LA-area electric aircraft developer, announced that its nine-seater plane achieved its first flight (and landing) on a hybrid-electric propulsion system. Ampaire expects the aircraft to enter commercial service in 2024. https://axios.link/3UV7sNf 

• Gulf Coast Sequestration, a Louisiana-based CCS developer building a sequestration hub, and Climeworks, the Zurich-based DAC developer, signed an MOU aimed at permanently removing 1m tons of CO2 annually by 2030. https://axios.link/3glb0tc 

• The California Coastal Commission approved a development permit for California American Water’s proposed desalination plant for the Monterey Peninsula in Central California. https://axios.link/3Gz98ra 

• Covanta, a New Jersey-based waste-to-energy services provider, announced that emissions data is available online for its facility in Okahumpka, Florida. https://axios.link/3V25f2I 

• Babcock & Wilcox signed an agreement with NRG Korea to study the potential use of B&W technology for a hydrogen generation facility using biomass fuel in South Korea. https://axios.link/3ABQNWL 

• Globeleq, a London-based power plant operator in Africa, signed a framework agreement with the General Authority for Suez Canal Economic Zone, the Sovereign Fund of Egypt for Investment and Development, the New and Renewable Energy Authority, and the Egyptian Electricity Transmission Company to jointly develop a large-scale green hydrogen facility in the Suez Canal Economic Zone. https://axios.link/3XjT56E 

• Gotion High-Tech, a China-based lithium-ion battery manufacturer, and VinGroup, a Vietnamese conglomerate, broke ground on their joint battery factory in the Vietnam Ha Tinh Economic Development Zone. The project is expected to reach 5 GWh capacity by 2023. https://axios.link/3AuiYa4 

5. Hot deals

• Morrow Batteries, an Oslo-based battery cell manufacturer, hired Lars Christian Bacher as CEO effective Dec. 1. He was previously senior partner at Hitec Vision, a private equity firm. https://axios.link/3U2Bm0U 

• Appian Capital Advisory, a London-based investment adviser to long-term private equity funds that invest solely in mining and mining-related companies, appointed Silvio Lima as head of corporate affairs, ESG and community engagement. Lima was previously director of corporate affairs and people at Appian Capital Brazil. https://axios.link/3AAS54u 

6. It's personnel

🦃 Happy Monday, and welcome to Thanksgiving week! Let's dig in.

🧗🏻‍♀️ Megan is the proud new owner of an assortment of old-school climbing gear after winning some bids at a fundraiser this weekend. 

🕺 The 17-month-old has started dancing — just about any time she hears any music at all. Which means Alan and Terry's nightly routine now involves evening dance parties. They're not complaining. 

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

And thank you for reading Climate Deals! Please share with your friends, family and out-of-town guests.

November 21, 2022

1 big thing: E-scooter investors dump the U.S. for Europe