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BFD Expert Voices - Climate Deals

BFD Expert Voices

A growing list of startups is using advances in generative AI, the tech behind ChatGPT, to develop tools to mitigate or adapt to climate change and grow the use of climate technologies, Katie writes.

Why it matters: The changing climate is one of the most complex global problems, and high-powered computing and smart algorithms could do things like help discover new energy materials or unlock young climate tech markets.

Details: Startup Verse, which uses generative AI to help companies buy clean power, recently unveiled its product, along with a seed round of $5.75 million in funding, led by Coatue and with participation from Twine Ventures, MCJ Collective and others.

San Francisco-based Verse trains models with data about how power purchase agreements work — like PDFs or articles on the subject — and has developed a tool that it says makes the process of buying clean power cheaper, faster and easier.

State of play: Verse is just one example, focused on the specific issue of the complexity of clean power PPAs.

Vancouver-based startup Good Chemistry uses advanced computing and generative AI to enable researchers to discover and develop new materials.

Open ESG, a startup, based in Palo Alto, Calif., uses generative AI to help consumers understand ESG details of companies and products.

Amazon's cloud computing arm, AWS, and an AI research group recently launched a new program that will support startups using AI and advanced computing to combat climate change.

Big picture: The applications from generative AI for climate are just emerging following advances in OpenAI's ChatGPT and others working on generative AI models.

AWS's head of startup business development, Kathryn Van Nuys, says, "We're seeing a whole new host of use cases and technology around generative AI and climate tech and we're going to see some exciting solutions and big ideas."

Yes, but: While generative AI could aid in the complex issue of climate change, models like ChatGPT also use large quantities of energy to both train and support user queries.

Companies will need to be able to make training and operating generative AI models as energy efficient as possible to reduce energy use.

1 big thing: Generative AI for climate

an illustration of a robot hand holding a stem of green leaves

The Danish government is raising up to $800 million for a new fund targeting investments in waste management and waste handling, Alan reports exclusively.

Why it's the BFD: The fund underscores the complexity and amount of money needed to address a hardware-heavy sector that's historically been difficult to monetize for venture investors.

Catch up fast: The fund, known as Investment Fund for Developing Countries, has built a roughly $1.3 billion impact-driven project portfolio.

You may recognize the name from last week — IFU led Bright's $31.5 million Series C to expand rooftop solar in Mexico.

The latest: IFU began raising for its new waste-focused fund in July, Thomas Hougaard, IFU's head of green energy and infrastructure, tells Alan.

"No official commitments, but we've already been around the block and spoken to the LPs and have a good feeling from them," Hougaard says.

Zoom in: The fund will pursue minority investments, with checks starting at $25 million for companies valued at $100 million or more.

"It's impact growth capital, so we are targeting low to mid-teen returns," Hougaard says.

What they're saying: The market cooldown of the past year or so hasn't weighed too heavily on IFU's fundraising — including this latest raise that will near $1 billion.

"We are getting a lot of support both from the Danish government and from pension funds, because it's being counter-weighted by a lot of private interest — consumers like the story that their pension fund capital is not only generating returns but helping to do good in the world," Hougaard says.

2. The BFD: Danish dump

Illustration of a dollar sign formed by recycled plastic items.

Software developer SnoFox closed a $4.5 million seed round to reach more warehouses, shippers and other companies that store food and medications along the so-called "cold chain," Alan reports exclusively.

Why it matters: Keeping stuff cool demands huge amounts of electricity and can release potent greenhouse gases — making cold chain logistics a sector ripe for cost savings.

How it works: SnoFox offers its software and analytics to warehouses and other facilities as a subscription.

The NYC-based startup is working with 10 facilities in the U.S. It raised the seed round to expand hiring and onboard more customers.

Details: Voyager Ventures led the all-equity round, which closed in March.

Pale Blue Dot, Ponderosa Ventures and Mudcake participated.

State of play: Nearly 80% of cold storage sites were built before 2000.

Meanwhile: Refrigerators often leak hydrofluorocarbons, or HFCs, which are magnitudes more powerful than carbon dioxide.

Bottom line: Shipping and storing food generates 3.5% of global emissions — even as mountains of food are ultimately lost to unreliable refrigeration.

1 fun thing: CEO Ben Rubin founded the company with his older brother, Matt.

Their father, medical professor Harvey Rubin, in 2010 launched Energize the Chain, a Philadelphia nonprofit that uses cellphone towers to power small refrigerators for storing vaccines in remote areas.

3. Keeping it cool

Illustration of a blank check in an ice cube.  

🪖 A venture fund in uniform: NATO has raised €1 billion from member nations for a fund that will invest in startups that are focused on technologies that could have military or defense applications. It also may invest in other venture capital funds, Axios' Dan Primack reports in Pro Rata.

This appears to be the first ever "multi-sovereign" investment fund. 

Its investment team includes Andrea Traversone (ex-managing partner of Amadeus Capital), Kelly Chen (DCVC), Thorsten Claus (Thinkstorm Ventures), Chris O'Connor (Harpoon Ventures) and Patrick Schneider-Sikorsky (Beast Ventures).

🐔 Taste testing lab-grown chicken: Our colleague Megan Rose Dickey had the chance to taste Good Meat's cell-cultivated chicken at its facility in Alameda, Calif., last week.

“It tasted like chicken and I'd eat it again!” she reports in Axios San Francisco. “But it could definitely be juicier and more tender, something the company said it's working on addressing.”

🏛️ New efficiency rules: The Transportation Department floated draft rules that would mandate efficiency increases in cars and light trucks, Ben also writes in Generate.

The light-duty vehicle proposal for model years 2027-2032 would require automakers to achieve a fleet-wide average of 58 miles per gallon by 2032. It also covers heavy-duty pickups and vans for 2030-2035. The Detroit Free Press has more.

4. Temperature check

Illustration of the sand from a sand timer filling the temperature scale on a thermometer.

•  Coatue Ventures, based in NYC, raised $331m for its third fund focused on early-stage startups, per an SEC filing. https://axios.link/3KjKTOU

• Airalo, a solar-based steam generation startup, raised $60m in Series A funding at a $280m post-money valuation. E& Capital led, and was joined by Antler Elevate, Liberty Global, Rakuten Capital, Singtel Innov8, Surge, Orange, T.Capital, KPN Ventures, Telefónica Ventures, I2BF Global Ventures, GO Ventures and LG Technology Ventures. https://axios.link/3YhFddS

• Equilibrium Energy, an SF-based energy company, raised $33m from Breakthrough Energy Ventures, Global Founders Capital and NJP Ventures. https://axios.link/3KphLpr

The startup's first project: paying battery owners for the right to offer their storage capacity in Texas wholesale energy markets, per Canary Media.

• Plotlogic, an Australian mining data provider, closed a $28m Series B led by Galvanize Climate Solutions and Schneider Electric's venture arm, SE Ventures. Existing investors Innovation Endeavors, DCVC, Bentley iTwin Ventures and Grids Capital participated. https://axios.link/3QjEyqw

• TwentyTwo Ventures, an SF-based early-stage firm, is raising $25m for its sixth fund, per an SEC filing.

• TruckLabs, a Phoenix-based startup focused on improving fuel efficiency and battery range for trucking fleets, raised $7m in Series B funding. Blue Bear Capital led, and was joined by insider Calibrate Ventures. https://axios.link/3OEJQMe

• Macquarie announced a planned $325m investment in Atlas Agro, a Swiss fertilizer manufacturer building so-called green fertilizer plants in the U.S. and Latin America. https://axios.link/4763szQ

• RES, the London-based renewables giant, announced plans to acquire the renewable services division from Spanish energy company Ingeteam. https://axios.link/3ObLwLA

• Trinity Solar, a Warwick, R.I.-based residential solar and battery storage developer, received an undisclosed investment from SF-based TSG Consumer Partners. https://axios.link/3q6xe78

• Electriq Power, a San Leandro, Calif.-based residential and commercial energy storage and management provider, completed its SPAC merger with blank-check company TLG Acquisition One Corp. https://axios.link/3QlEOp9

• Battery recycling company Li-Cycle, based in Toronto, started up its first battery recycling facility in Europe, in Magdeburg, Germany. https://axios.link/44OuzOt

• Birkenstock, the German sandal maker owned by L Catterton, is prepping a 2023 IPO that could value the company at $8b, per Bloomberg. The news outlet previously suggested a $6b valuation. https://axios.link/3KnSRqt

Climate tech? No. But this is a climate newsletter, after all.

• Micromobility.com, the NYC-based bike- and scooter-share network fka Helbiz, submitted a non-binding bid to acquire VanMoof Amsterdam, the venture-backed e-bike maker that declared bankruptcy last month. https://axios.link/3Krw7Wn

• Charge Enterprises, an NYC-based electrical, broadband and EV charging infrastructure provider, acquired Greenspeed Energy Solutions, an Atlanta-based solar, energy storage and EV-charging infrastructure provider. https://axios.link/43OZHMy

• WattEV, the Long Beach, Calif.-based charging developer for electric trucks, says it received $40.5m in grants to build a solar-powered truck charging depot near Sacramento International Airport, and a grid-connected charging depot along Interstate 5 in Salem, Ore. https://axios.link/3KjEaVa

• Nikola, the Phoenix-based electric truck maker, received $16.3m in grants from four California groups to help fund construction of seven open-network hydrogen refueling stations. https://axios.link/3KmnCvO

• Verde Clean Fuels, a Houston-based renewable- and natural gas fuels developer, entered a carbon dioxide management agreement with Carbon TerraVault JV HoldCo, a CCS joint venture between Carbon TerraVault and Brookfield Renewable. https://axios.link/47hAQ6L

• Energy Vault, the Swiss gravity energy storage developer, commissioned its first grid-scale gravity energy storage project, a 100 MWh system outside Shanghai. https://axios.link/456L5ZQ

• Ryder System, the Miami-based truck rental and logistics company, opened an in-house tech lab in Silicon Valley it's calling Baton. https://axios.link/43Qedn1

5. Hot deals

•  Siva Sivaram was appointed president of San Jose battery developer QuantumScape. Sivaram was previously president of Western Digital. https://axios.link/3Ki2WVS

• Ryan Barrett joined Aviation Capital Group as SVP and head of marketing. Barrett was previously head of commercial for Asia Pacific at CDB Aviation. https://axios.link/3qa1PAF

• Johann Bordais will become the CEO of Ft. Lauderdale-based eVTOL maker Eve Air Mobility. Bordais was previously president and CEO of Embraer Services & Support. https://axios.link/3OkLCAq

6. It's personnel

🤔 In this edition of Trivia Tuesday, one straight outta Cleantech 1.0: 

Reply to this email with your answer and we'll send you a virtual high-five 🙌🏻 

🖍️ Katie and the kids have been doing a lot of coloring lately. Can be very Zen for adults!

🎧 Alan learned this weekend that New Order was an outgrowth of Joy Division (h/t Song Exploder). That's led to a serious Joy Division kick the past few days. "Unknown Pleasures": 👌 album. 

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 friendly AI overlords.

August 01, 2023

1 big thing: Generative AI for climate