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Climate Tech VC newsletter co-founder Sophie Purdom is raising funds for a climate-focused venture firm, Planeteer Capital, she tells Alan exclusively.

Why it matters: Purdom has become one of the more visible figures in climate investing through both her newsletter and her angel investments.

Catch up fast: Purdom and firm co-founder Hannah Friedman launched Planeteer last year.

The firm filed with the SEC in March, indicating it was raising up to $100 million for its first fund.

Planeteer held a first close the same month, having raised more than a third of the fund's target, people familiar with the fund tell Axios.

The latest: Planeteer plans to focus on pre-seed and seed-stage startups as lead and co-lead investor.

Initial checks will span $500,000 to $3 million.

It's aiming to back 20 to 25 companies in its first fund.

Zoom in: LPs are institutional investors, family offices, venture funds and individuals.

They include Collaborative Fund, an undisclosed Ivy League endowment, and Mike Schroepfer, the former Meta CTO who founded climate venture fund Gigascale Capital.

What's next: Target sectors include carbon management, industrial decarbonization, the built environment, climate intelligence and insurance, and sustainable agricultural supply chains.

It's so far invested in one portfolio company — a "hardware-enabled software business" — across multiple rounds, Purdom tells Axios.

Of note: Friedman was previously an investment associate at Closed Loop Partners.

Purdom is on the board of Climate Tech VC, which recently completed a $1.75 million pre-seed round. Planeteer did not participate, she says.

1 big thing: Sophie Purdom's next act

Sophie Purdom, right, and Hannah Friedman. Photos courtesy of Planeteer

Beware the underestimates, Ara Partners managing partner Troy Thacker tells Alan.

"Capital costs and timelines are frequently underestimated when building businesses. Investors and managers should develop business and capital plans conservatively to be prepared for every possible eventuality."

Why he matters: The Houston-based private equity firm has rapidly become a major investor in industrial decarbonization. One recent deal: Divert's $1.1 billion financing in March to reduce food waste. 

This interview was lightly edited for length.

What was the big news in climate tech this week?

Ford, GM, and now Rivian are all adopting the Tesla North American charging  standard. This is a huge development for the electric vehicle sector.

This is likely a watershed moment for EVs. Charging standardization should help accelerate adoption and reduce confusion.

The need to reach net zero goals established by companies and countries around the globe is not limited to renewables and EVs. The “world of made things” needs attention as well. 

The movement toward lower carbon input materials and chemicals — and away from fossil-based feedstocks — is having a decarbonization impact that allows for the production of lower carbon products for downstream customers. 

💼 First job: Scooping ice cream at Braum’s in Tulsa.

👑 Proudest investment: Beyond building Ara Partners — our recent investments in emerging sectors like agriculture-based, low-carbon packaging, renewable natural gas and carbon and power solutions. 

🤦 Facepalm investment: While we never invested in it, the SPAC craze has brought unproven business models to market and placed significant technology risk on public investors.

2. Expert voices: Keeping it real

Photo illustration of Troy Thacker, with abstract shapes and the Ara Partners logo.

Photo illustration: Allie Carl/Axios. Photo: Ara Partners

The auto industry is falling like dominoes in adopting Tesla's electric vehicle charging standard — fueling speculation that Tesla will soon expand its reach to other parts of the EV ecosystem, Joann Muller reports in What's Next.

What's happening: Batteries and software are likely to become commodities as EV adoption grows.

What will set automakers apart is their body designs and add-on  software features that define their unique passenger experience.

The intrigue: Some carmakers could forgo the investment needed to develop electric or autonomous vehicle technology and instead buy the necessary components off the shelf.

Tesla, with its shrinking yet still commanding EV sales lead and increasingly efficient and low-cost manufacturing prowess, could  potentially become the industry's go-to EV technology supplier.

Zoom in: Its Autopilot and FSD ("full self-driving") technology could also be licensed to carmakers that can't afford to develop their own autonomous vehicle systems.

Think "Tesla Inside" — perhaps a small badge on a car's rear end to signal its provenance, not unlike the "Intel Inside" label the computer chipmaker once used.

What they're saying: "At what point will the legacy car companies realize that they also don't need to build their own batteries and chassis and drivetrains?" asks Will McDonough, CEO of EMG Advisors, an asset manager that invests in raw materials for EVs.

"Tesla's are better, more efficient, cheaper to build, and the entire industry might as well adopt their battery tech and focus on servicing customers and differentiating on body styles and brand."

3. It's about more than just the Tesla chargers

Illustration of people surrounding and looking up at a giant Tesla logo 

June 20 — GreenPlaces closed a $13 million Series A as the software maker aims to reach more restaurants, white-collar offices and other businesses trying to hit new decarbonization goals, Alan wrote.

Why it matters: The startup is part of a growing ecosystem supporting companies with emissions cuts across supply chains and service providers.

June 21 — Climate investor HASI has provided a credit facility of up to $150 million to help GridPoint deploy its energy management systems for commercial buildings, Katie reported.

Why it matters: Commercial building owners have increasingly been turning to software and computing to manage and reduce their energy use, but the upfront cost of installing the tech has been a barrier.

June 22 —  Upside Foods and Good Meat on Wednesday became the first U.S. companies to win federal approval to begin selling lab-grown chicken, Alan wrote.

Why it matters: The sign-off from the U.S. Department of Agriculture makes the U.S. only the second country, after Singapore, to approve sales of meat made in a lab instead of a farm.

4. 🗞️ Catch up quick

🐮 Moo-moo here: Add another flavor to the hydrogen rainbow. According to ICCT analyst Nikita Pavlenko, hydrogen producers in California are pairing hydrogen made from natural gas with a credit for dairy manure management outside California and across the country.

In a subsidy trick, the moo hydrogen producers and out-of-state farmers can make more money than a producer buying electrolyzers and using clean electricity to produce green hydrogen.

The fuel pathway is up for approval by the California Air Resources Board under the Low Carbon Fuel Standard, which is generally a solid program that has helped California reduce its carbon emissions considerably.

🐷 Oink-oink there: Whether you're a livestock producer in Brisbane, Australia, or Shiloh, Illinois, there's a brand-new app to help shield your hogs from heat, Axios' Ayurella Horn-Muller reports.

HotHog predicts pigs' thermal stress tied to user locations. It uses open-sourced weather data coupled with behavioral and physiological swine research — effectively forecasting what temperature and humidity conditions cause a pig to become overheated.

✈️ Here a jet, there a jet: Aircraft maker Airbus has a new deal to collaborate on sustainable aviation fuel with LanzaJet, the sister company of carbon and fuels upstart LanzaTech.

LanzaJet is building a SAF factory dubbed Freedom Pines Fuel in Soperton, Georgia, and it hopes to start production this year.

😬 Everywhere an ouch-ouch: Siemens Energy had a third of its market value evaporate this morning after it warned that quality problems in its Siemens Gamesa wind turbine business might take years to fix and cost more than €1 billion, per Reuters.

Wind turbine manufacturers including GE and Vestas have encountered major manufacturing challenges. The latest from Siemens suggests they’re not resolving any time soon.

5. Temperature check

Illustration of an ice cream cone with a melted puddle of ice cream that looks like the earth.

• Omeat, an LA-based cultivated meat developer, emerged from stealth with $40m in funding from S2G Ventures, GV, Bold Capital Partners, Tyson Ventures, Rethink Food, Trailhead Capital and Cavallo Ventures. https://axios.link/3CMI4Sp

• C-Combinator (fka Carbonwave), a Puerto Rico-based developer of regenerative biomaterials from seaweed, raised up to $6m from Pegasus Capital Advisors and the Global Fund for Coral Reefs.

• Adamo Foods, a U.K.-based developer of whole-cut steak made from mycelium, raised £1.5m via equity funding from SFC Capital and two grants from Innovate UK. https://axios.link/3pgZXpj

• 1MT Nation, an Estonian nature-based carbon removal startup, raised €1m. Wood pellet producer Warmeston OÜ and investor Margus Kohava participated. https://axios.link/3r2YZ0c

• Solar X Works, an SF-based energy management developer, received an undisclosed equity investment from GW Global Partners. https://axios.link/3PqK9uC

• Spanish insurer Mapfre is raising €100m to invest in RNG projects in Spain. https://axios.link/3JrUzGJ

• Cox Enterprises (owner of Axios Media) launched a venture fund, Socium Ventures, to invest $3m to $25m in “emerging growth businesses” raising Series A rounds and beyond. https://axios.link/42XK8BN

• Bernhard Capital Partners agreed to buy Optimum Energy, a Seattle-based provider of HVAC optimization solutions. https://axios.link/3NJwYnr

• Energy Infrastructure Partners, the Swiss asset manager, is among the suitors for a minority stake in Plenitude, a low-carbon business that owner Eni still hopes to eventually list. https://axios.link/43VoP54

• Nucera, a hydrogen unit of Germany’s Thyssenkrupp, is seeking to raise more than €566m in a Frankfurt IPO. Final pricing is set for early July. https://axios.link/43Y3AiY

• Verde Bioresins, an LA-based bioplastics developer, agreed to go public at an implied $365m pre-money enterprise value via TLGY Acquisition Corp. (Nasdaq: TLGY), a SPAC led by Jin-Goon Kim (ex-TPG). https://axios.link/3CJ95pL

• Surf Air Mobility, the LA-based regional air travel and electric aviation developer, told the SEC it expects to begin trading on NYSE on July 11. https://axios.link/3CHynoj

• Actis agreed to sell BTE Renewables, a pan-African renewable energy group, to Engie and French investment firm Meridiam for around $1b. https://axios.link/42WkxsA

• Applied Value Group acquired ES Solar, a Layton, Utah-based residential and commercial solar and battery installer. https://axios.link/3qOHOzp

• VFC, as in “Vegan Fried Chick*n,” acquired fellow U.K. startup MeatlessFarm, a meat-free startup that laid off the bulk of its staff this month after an investor backed out, per AgFunder News. https://axios.link/3NK1uxm

• Eaton, a Southfield, Mich.-based power-management developer, received a $600k grant from the Michigan Economic Development Corp. to fund electric vehicle R&D at three of the company’s Michigan sites. https://axios.link/3Nq2CF0

• Ford is preparing for another round of layoffs of salaried workers in its U.S. gas, EV and software divisions, per WSJ. https://axios.link/3pbTLyZ

• The Church of England is dumping Exxon, Shell, BP and other majors remaining in its investment portfolio "after concluding that none are aligned" with Paris Agreement goals, it said. Ben Geman has more in Generate. https://axios.link/3Pnz39T

5. Hot deals

• Kaitlyn Glancy, former head of North America for Flexport, joined VC firm Eclipse as a partner. https://axios.link/3pjjyVS

• Tammy Kiely stepped down as Goldman Sachs' co-head of tech investment banking to join Evercore. https://axios.link/42UzDiu

6. It's personnel

🍻 It's Friday! Gang, we made it, and today's a longer newsletter, so let's get to it. 

⚾ Katie is sad the SF Giants ended their winning streak but hoping for another banner year (even though we’re in an odd-numbered year).

🛩️ Alan is taking a seaplane this afternoon from Boston to Manhattan. It's the type of short route that's ideal for electric flights. Alan will do his best Pete Campbell.

Thank you to George Moriarty and Brad Bonhall for today's edits.

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

June 23, 2023

1 big thing: Sophie Purdom's next act