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Chipotle’s venture fund is directing its capital toward the sustainable food supply chain, with two minority investments under its belt already, our Retail Deals colleagues report.

Why it matters: Consumers say they want more climate-friendly, locally sourced food. Chipotle launched Cultivate Next last year to capture that market.

Catch up fast: Cultivate Next announced early-stage investments last week in Local Line, a food-sourcing software provider, and Zero Acre Farms, a sustainable oils and fats food company.

What’s next: Chipotle CTO Curt Garner tells Axios that the fund plans to make three to five investments a year.

Meanwhile, Eat Just, the parent of plant-based egg unit Just Egg and cultivated-meat unit Good Meat, continues to weigh whether the two businesses should be separated, CEO Josh Tetrick tells Retail Deals exclusively.

The company has raised well north of $400 million and is a pioneer in cultivated meat.

Plus: Pathwater, a Fremont, Calif.-based sustainable bottled-water business, is in talks with investors to raise additional cash, CEO Shadi Bakour tells Retail Deals exclusively.

The opportunity to grab more share of the bottled-water market is “so massive” that it would make sense to inject more capital, Bakour says.

1 big thing: Chipotle's climate menu 

Illustration of a taco full of hundred dollar bills.

Northvolt, the Stockholm-based battery unicorn, is reportedly in talks for $5 billion in financing as it races to become Europe's biggest battery maker, Alan writes. 

Why it's the BFD: With roughly $8 billion raised to date and a valuation nearing $20 billion, Northvolt has the capital to loosen China's stranglehold over battery supply chains. 

Driving the news: Northvolt is negotiating with multiple banks on the potential debt financing agreement, FT reported yesterday.

A deal is expected as soon as this year. The company raised a $1.1 billion convertible note last summer. 

State of play: Northvolt produced its first battery from an enormous factory near the Arctic Circle in 2021.

It's started on a second giant factory with Volvo Cars, and is bringing a recycling plant online as well as expanding a battery systems factory. 

The intrigue: Northvolt is debating whether to open its third factory in the U.S. or Germany. 

Context: China controls 75% of the world's battery cell manufacturing capacity and 90% of anode and electrolyte production, per BloombergNEF.

What we're watching: Northvolt is discussing a potential IPO with Goldman Sachs, Morgan Stanley and JPMorgan.

"It has almost constant capital needs because of its ambitious expansion plans so is likely to raise more in the coming months to finance all its activity," FT wrote in a deep-dive on the company this month.

Meanwhile, South Korea's LG Energy Solution said Friday it will invest $5.5 billion to build a sprawling EV battery factory near Phoenix.

2. The BFD: Europe's challenger to China

🏭 Carbon capture gets more sophisticated: CCS companies are increasingly specializing in different parts of the project development chain, Axios' Ben Geman writes in Generate.

It's an evolution from earlier days of the sector marked by "full-chain" projects — a single operator controlling capture at an industrial site, but also transport and injection.

🏛️ Permitting reform bedfellows: K Street powerhouses led by the U.S. Chamber of Commerce are linking arms with renewables lobbyists to urge Congress to speed permitting for energy projects, Ben also writes.

This morning brought the release of a Chamber-led letter from a wide range of groups, calling on Congress to act by summer's end. The letter doesn't back specific bills, but offers broad "principles."

🔩 Another commodity in short supply: “U.S. steelmakers are ramping up production of a hard-to-make, paper-thin steel to capture a fast-growing market for a material critical to powering electric vehicles,” WSJ reports.

This “electrical steel” accounts for just 1% of global steel production. Companies expect demand to ramp up as EV production accelerates.

🚗 New head of the UAW: Reform candidate Shawn Fain was elected head of United Auto Workers, the union representing a broad swath of laborers in auto and aircraft manufacturing, as well as other industries.

Electric vehicles will be on Fain’s agenda. Workers on EV supply chains are generally paid considerably less than their internal-combustion counterparts.

3. Temperature check

• Mixergy, a British maker of smart water tanks, raised £9.2m from EDP Ventures, Nesta and insiders Oxford Science Enterprises, Kiko Ventures, Foresight WAE Technology and Centrica. https://axios.link/40kn3IU

• AVG Group Sarl, a Luxembourg-based ESG and impact investor with offices in NYC, made an undisclosed investment in TGN Energy AS, a Norwegian hybrid energy management provider. https://axios.link/3K3KFfa

• Origin Energy, the Australian power company, signed an ~A$15.4b takeover offer from a consortium led by Canada's Brookfield, per Reuters. https://axios.link/42LKZGA

• Magnesium Capital, a London-based energy transition PE firm co-founded by Ian Jones (ex-Apax Partners), is raising its debut fund, per an SEC filing. https://axios.link/3TKUi5u

• Spruce Power, a Houston-based solar owner-operator focused on the U.S. residential market, acquired SS Holdings 2017 and its subsidiaries from an undisclosed U.S.-based private equity firm. https://axios.link/40hihMn

• CleanCapital, an NYC-based renewables investor focused on the middle-market solar and storage sectors, acquired a 26.2 MW portfolio of 10 operating solar assets in Rhode Island. https://axios.link/3JG5Xhr

• Taiga Motors, a Canadian electric off-road vehicle manufacturer, closed a ~$40.2m private placement of 10% secured convertible debentures to scale production. https://axios.link/3LT8lEe

• Carbon Neutral Royalty, a Vancouver-based finance provider for carbon credit projects, closed a facility of up to C$25m with Beedie Investments. https://axios.link/3FQin5q

• Oya Renewables, a Toronto-based developer and IPP, secured a $27.1m long-term loan facility with City National Bank and funding from tax-equity investor Greenprint for four community solar projects in New York totaling 24.8 MW. https://axios.link/3npCilh

• The Cleantech Leaders Roundtable is accepting pitches through March 30 from startups seeking early-stage angel funding at or below $3m. https://axios.link/40ejcwZ

• Air Products, the Trexlertown, Pa.-based industrial gasses and chemicals supplier, withdrew from its $2b coal-to-methanol project in Bengalon, Indonesia, citing media reports and a “significantly changed” financial landscape for hydrogen projects. https://axios.link/3JLGXWg

• Montana Renewables, a renewable fuels subsidiary of Calumet Specialty Products, was invited by the U.S. Department of Energy to submit a Part II Application for a $600m loan guarantee. https://axios.link/3lOckr5

• Mining giant BHP on Monday announced an agreement with the huge Chinese steelmaker HBIS Group to pilot carbon capture and utilization at HBIS operations. https://axios.link/40uNjzY

• Rock Tech Lithium, a Vancouver-based lithium hydroxide producer, broke ground on its first lithium hydroxide conversion plant, in Guben, Germany. The company plans to build four in Europe and one in North America. https://axios.link/3z9yyqx

• The Global Impact Investing Network, an advocacy group, launched a tool to compare agriculture impact investment funds, per AgFunder News. https://axios.link/40kQwlN

• Charge Enterprises, an NYC-based EV charging infrastructure company, and Eaton, a Dublin-based power management provider, are collaborating on charging-infrastructure deployment for fleets and car dealers. https://axios.link/3LQuyTz

• Automaker Stellantis and the U.S. Department of Energy launched a “Battery Workforce Challenge” that includes a three-year collegiate engineering competition, vocational training and STEM education. Argonne National Laboratory is managing the program. https://axios.link/3FYuQUv

• Upward Farms, the Brooklyn-based vertical farming startup, plans to lay off 78 employees and close June 15, per Crain’s, which cited a layoff notice filed with New York State. https://axios.link/40k9I34

• New Age Eats, a Berkeley, Calif.-based cultivated meat developer, shut down after failing to secure funding, founder Brian Spears wrote on LinkedIn. The company had raised a $25m Series A in 2021 led by Hanwha Solutions, per AgFunder News. https://axios.link/3TOgtIa

4. Hot deals

• Murex, a Plano, Texas-based low-carbon-fuels marketing and logistics provider, hired Mauricio Ramirez as CFO. Ramirez was previously director of commodity sales and trading at Macquarie Group. https://axios.link/3FPT7fx

• Joby Aviation, the Santa Cruz, Calif.-based eVTOL developer, appointed former FAA administrator Michael Huerta to its board of directors. Huerta is also on the board of Delta Airlines, a Joby partner. https://axios.link/3z8yBmn

• Amtrak hired former NYC Transit president Andy Byford as EVP to oversee high-speed rail. Byford, aka Train Daddy, was previously head of Transport for London. https://axios.link/3lFyRGv

• Appian Capital Advisory, a London-based investment adviser to long-term value-focused private equity funds in mining and mining-related sectors, hired Douglas Coleman as head of Mexico. https://axios.link/3lIO9dw

5. It's personnel

Welcome back! It's Monday, and it's finally above freezing in New England.

🏦 Situational awareness: Silicon Valley Bank has found a buyer. As of this morning, its remaining depositors will become customers of First Citizens BancShares. More from Axios’ Dan Primack here.

Also, Axios Pro Tech Policy launches today. Sign up here.

🐶 Alan and family adopted an Irish setter this weekend. Her name is Stella. 

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 burrito investors.

March 27, 2023

1 big thing: Chipotle's climate menu