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BFD Expert Voices - Climate Deals

BFD Expert Voices

Record-setting wildfires are stoking a surge in deal-making, Alan reports.

Why it matters: Soot-covered homeowners, local governments and wildland firefighters are clamoring for tech to predict and contain blazes.

Driving the news: Vibrant Planet, a software developer for land management, acquired wildfire analysis and modeling provider Pyrologix for cash and stock, the companies tell Alan.

The deal closed June 30. Financial terms were not disclosed. 

Details: Vibrant's investors include Day One Ventures, Cthulhu Ventures, Earthshot Ventures, Elemental Excelerator and Halogen Ventures, per PitchBook.

Pyrologix, based in Missoula, Montana, was bootstrapped, founder Joe Scott tells Alan.

Zoom in: Vibrant Planet, based in Incline Village, Nevada, near fire-prone Lake Tahoe, had built expertise in flood and drought resilience. 

As the chart above shows, the ferocity of climate-fueled wildfires has unleashed a wave of capital — both from investors and from customers.

"Just in the last year, the attention and amount of federal and private solutions going into wildfire is mind-blowing," Vibrant Planet CEO Allison Wolff tells Alan.

State of play: Other recent wildfire deals include Frontline Wildfire Defense's $6.4 million seed round for sensors and smart-sprinklers, Pano's $17 million Series A extension for detection tech, and miner Compasss Minerals' acquisition of eco-friendly fire suppressant developer Fortress.

Plus: Xprize in April announced an $11 million competition for wildfire tech. 

And investor Bill Clerico's venture firm, Convective Capital, last year raised $35 million to exclusively focus on wildfires.

Be smart: The bulk of wildfire startups seem to be concentrated in sensing and prediction — less so on physical management.

“I think what we do see is overcrowding in certain areas and lack of focus in other areas,” Clerico recently told Axios' Kia Kokalitcheva.

Go deeper: Disaster investing, wildfire edition

1 big thing: The rally to wildfires

Energy Dome, which makes technology for energy storage, has closed a €55 million (~$60 million) funding round, with investors that include Oman's sovereign wealth fund, writes Katie.

Why it's the BFD: The startup's tech will help companies tap into long-duration energy storage that can be paired with clean power at a lower cost than lithium-ion batteries.

Driving the news: The company's €15 million second tranche of its Series B follows an initial tranche of €40 million raised in late April. Milan-based Energy Dome plans to spend the funds on projects, hiring and expanding in the U.S.

In addition to the financing, the Oman Investment Authority signed a memorandum of understanding with Energy Dome to explore storage projects in the region. Energy Dome co-founder Francesco Oppici described the Middle East as a key market for its technology.

Details: Energy Dome makes what it calls a "CO2 battery," though it's actually a thermodynamic system that uses CO2 as the working fluid.

The system "charges" by using electricity to draw CO2 gas through a compressor and condenses it into a liquid, which is stored under pressure in tanks. The process creates heat, which is also stored.

By the numbers: The CO2 battery only uses CO2, steel and water, so its supply chain is relatively simple and low-cost.

Oppici says Energy Dome will provide the market with its tech at a cost 40% lower than lithium-ion batteries.

Big picture: The CO2 battery is meant to provide storage duration for up to 10 hours and sit next to a solar or wind farm.

Cheap, reliable and scalable long-duration energy storage is a holy grail that can help intermittent solar and wind provide power around the clock.

Many grid storage projects are using lithium-ion batteries, but those aren't expected to get cheap enough for many grid applications.

2. The BFD: Energy Dome stores cash, taps Oman

Investors may be pouring billions into climate tech, but the sector is still at the early stages of talent-development and goal-setting — especially when it comes to who's getting that money, Muus Climate Partners principal Tani Brown tells Alan.

Why she matters: Even the most seasoned climate veterans are scratching their heads over how to tap the rivers of capital flowing from state and federal coffers.

Brown, a former Fulbright scholar with a background in DEI, works with founders to not only run their shops but grab those non-dilutive dollars.

What was the big news in climate tech this week? 

Commercial-scale breakthroughs in geothermal energy.

Even when we hear about major breakthroughs, there’s white space for innovation to scale faster. Acceleration is everything.

One tip for climate tech investors or founders?

Make your economic value prop undeniable. 

💼 First job: Youth basketball coach in LA.

👑 Proudest deal: Nth Cycle and its manufacturing plant for nickel and cobalt production.

🤦 Facepalm deal: NFTs for carbon offsets. Carbon offsets aren’t doing much, and NFTs aren’t making them better.

💡 In three-ish words, one change you would make to climate tech investing: More seats at the table.

3. Expert voices: Seats at the table

Photo illustration of Tani Brown, principal at Muus Climate Partners, next to the Muus logo and various shapes 

Photo illustration: Sarah Grillo/Axios. Photo: courtesy of Muus Climate Partners

🧐 The biggest winners of the IRA? Foreign firms: The WSJ has a sweeping piece tracking the flow of climate funding from the Inflation Reduction Act. 

More than 60% of the IRA's $110 billion has gone to foreign firms, the publication found, largely from South Korea, Japan and China.

🚚 Nikola's hydrogen hub: The electric truck developer announced plans to sell a planned hydrogen hub near its Phoenix headquarters to Australian Fortescue Future Industries. 

The Fortescue Metals subsidiary plans to build a hydrogen production facility that uses electrolysers on the site. It's also hammering out a hydrogen supply agreement for Nikola's fuel-cell-powered semis. 

😬 Uncle Sam’s sticker shock: U.S. agencies announced plans to buy about 9,500 EVs in the 2023 budget year. That’s a 3x jump from 2022 — and it’s running headlong into cost challenges, per Reuters.

The federal agencies will need more than $770 million for the vehicles and charging infrastructure. The cars alone cost $200 million more than the cheapest comparable internal-combustion vehicles, per the Government Accountability Office.

4. Temperature check

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

• Farizon, a Chinese EV manufacturer owned by Geely, closed a $600m Series A led by private equity firm Boyu Capital and state-owned Yuexiu Industrial Fund, per TechCrunch. United Clean Energy, Linjiang Industry Group and existing investors Hidden Hill Capital and Industry Foundation of Xiangtan joined. https://axios.link/3NX3cKR

• Norwegian power company Scatec raised $102m for solar-tech subsidiary Release, from Climate Fund Managers. https://axios.link/43BdGFk

• Flora Ventures, a Tel Aviv-based venture capital firm, raised $50m+ toward a targeted $80m fund focused on ag and food tech. https://axios.link/3q1jN8b

• Aeroseal, a Miamisburg, Ohio-based developer of sealing tech for more efficient buildings, raised a $67m Series B led by Breakthrough Energy Ventures and Climate Investment. https://axios.link/3OnE6Gy

• Indonesian EV maker Maka Motors raised a $37.6m seed round led by AC Ventures, SV Investment and East Ventures, per TechCrunch. https://axios.link/44MtupK

• Terabase Energy, a Berkeley, Calif.-based software company focused on utility-scale solar, raised $25m led by Fifth Wall. EDP Ventures joined. https://axios.link/3XZk8EZ

• SensorUp, a Calgary, Alberta-based startup that makes digital methane-leak-detection tech, raised C$12m led by Climate Investment. Evok Innovations participated. https://axios.link/3K1gm8A

• Skillit, an NYC-based recruiting site for construction labor, raised $8.5m led by MetaProp and Bow Capital. Existing investor Building Ventures participated. https://axios.link/3NSt4Hy

• Verse, an SF-based startup that uses generative AI for clean power, closed a $5.75m seed round led by Coatue. Twine Ventures, MCJ Collective, Firstminute Capital, Collaborative Fund, Future Positive and Incite.org joined. https://axios.link/3PZs5YZ

• Nitrofix, an Israeli green ammonia startup, raised $3.1m in seed funding led by Clean Energy Ventures. SOSV, Zero Carbon Capital, UM6P Ventures and High House Investments participated. https://axios.link/3q1vV9d

• London accelerator Carbon13 raised $2.2m+ in seed funding. True Ventures participated. https://axios.link/3Y778NJ

• Canadian auto parts supplier Magna announced plans to invest $790m to build three new facilities to support Ford electric vehicles, per Reuters. https://axios.link/3OjLiDk

• Battery startup Ambri signed a pilot deployment deal with utility Xcel Energy. The companies will build a 300 kWh system in Aurora, Colo. and test it over a year. https://axios.link/46U90gO

• The Biden administration announced the first lease-sale for offshore wind rights in the Gulf of Mexico. https://axios.link/3OpitWo

The sale includes 102,480 acres off Louisiana and nearly 200,000 off Texas.

• Virgin Atlantic says it will fly the world’s first 100% sustainable jet fuel-powered flight across the Atlantic Ocean from London Heathrow to New York’s JFK on Nov. 28. The flight will use sustainable aviation fuel from BP and Virent, owned by Marathon Petroleum. https://axios.link/44T0mgJ

5. Hot deals

• Michael Smith was named CEO of CPower Energy, the Baltimore energy services and VPP provider. Smith was previously CEO of ForeFront Power. https://axios.link/3pPPjWW

• Former Tasmania premier Will Hodgman was appointed an adviser to Singapore battery recycler Green Li-ion's board of directors. https://axios.link/44t674W

6. It's personnel

🏛️ Situational awareness: A bill to overhaul federal guidelines for advanced nuclear tech is set to hitch a ride on the Senate's defense authorization bill, Nick Sobczyk reports in the Axios Pro Energy Policy newsletter.

“The ADVANCE Act is important to companies designing the next generation of small modular reactors — and it’s among the few permitting policies with real bipartisan support.”

🏄‍♀️ Katie is excited about some beach time this weekend.

🎵 Alan's toddler's new favorite song is "Happy Birthday." So what song does Spotify play when you ask for that tune? A version in German.

Thank you to Michael Flaherty and Phoebe Neidl for today's edits.

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

July 20, 2023

1 big thing: The rally to wildfires