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BFD Expert Voices - Climate Deals

BFD Expert Voices

Food-recycling startup Mill Industries has raised about $70 million towards a $100 million target for a Series C round, two sources familiar with the situation tell Alan and our Pro colleague Richard Collings.

Why it matters: Solutions like Mill's help mitigate food loss and waste, which contribute up to 8% of greenhouse gas emissions, per the EPA.

Details: The round will be led by Prelude, with participation from Breakthrough Energy Ventures, the sources say.

Lowercarbon Capital, GV (Google Ventures) and Energy Impact Partners are also participating, and the round is set to close this month, according to one source.

How it works: Via a $33-per-month annual subscription, Mill provides customers with a kitchen bin the size of a trash can for depositing food scraps.

The scraps are then ground up and dehydrated.

Once the container is full, the food grounds are put into a prepaid box, which is picked up by the U.S. Postal Service.

The waste ends up at a processing facility and is turned into chicken feed.

Catch up quick: Mill was founded in 2020 by Matthew Rogers — responsible for software development for Apple's iPod — and Google veteran Harry Tannenbaum. 

As of April, Mill had raised $26 million, per PitchBook.

1 big thing: Food-recycling scoop 

Illustration of an empty banana peel overlaid with a $100 bill.

Battery materials and recycling company Ascend Elements has raised $542  million in a deal co-led by a new growth fund from BlackRock and Temasek, Katie reports.

Why it's the BFD: Investors are pouring money into building a domestic supply chain for EV batteries, spurred by Inflation Reduction Act dollars and funding from corporations.

Details: The round was co-led by the Temasek-BlackRock fund (Decarbonization Partners), along with Qatar Investment Authority and Temasek independently.

Big picture: The Biden administration has been amassing federal support through the IRA for a U.S. battery materials supply chain including manufacturing, mining, materials processing and recycling.

Private funding is now following the signal of government support, and companies across the supply chain have announced new battery factories, lithium mines, parts facilities and recycling plants.

Ascend Elements' fundraising follows news last week that Redwood Materials has closed an equity round of over $1 billion to expand its battery recycling and materials capacity. Redwood also secured a $2 billion loan commitment from the Department of Energy.

Recycled battery materials will play a key role in the ecosystem as the supply of new materials like lithium are dominated by global players like China. The U.S. only has a tiny piece of the new battery materials production market.

2. The BFD: BlackRock, Temasek, Qatar and batteries

Startup Lumen Energy has closed a Series A round of $11 million to expand its new clean energy financing product for commercial building owners, the company tells Katie.

Why it matters: There's massive unlocked economic and carbon reduction potential in bringing solar and batteries to commercial buildings across the U.S.

Details: Climate tech investor Ajax Strategies led the round, and investors Lowercarbon Capital and Designer Fund participated. Real estate companies Nuveen and Bridge Investment Group both joined in.

To coincide with the fundraise, San Francisco-based Lumen Energy also launched a new financing product, called Auto PPA, that offers automatically customized financing for each building in a commercial real estate portfolio.

The product acts as a marketplace between commercial building owners that want to deploy clean energy projects and financiers that want to invest in them.

Lumen Energy co-founder and CEO Peter Light, who previously worked on energy projects at Google's X, said that hundreds of properties have been run through the company's original platform and customers include commercial real estate companies Hines, Bridge Investment Group, and Tishman Speyer.

Zoom in: The reason that more commercial building owners haven't deployed solar and batteries is because each project tends to be complex and requires manual customization.

Not all buildings will economically benefit from rooftop solar or onsite batteries, and the rate of return on the investment depends on many factors, like the region, the building, the roof, the utility and more.

Light said a marginal IRR (internal rate of return) would be 3%, a good one would be 10% and a great one would be 12%.

Big picture: The U.S. is sitting on untapped potential of 145 GW of unused commercial solar.

At the same time, commercial buildings account for 16% of the greenhouse gas emissions in the U.S.

3. Exclusive: Lumen raises $11M for commercial solar

Illustration of rows of solar panels with abstract shapes and money elements.

🌆 $3m to turn boilers into VPPs: Rick Klau spent nine years as a partner with Google Ventures before leaving in 2020 to become California's chief technology innovation officer. Now he's back in the private sector with a startup that wants to revolutionize the humble hot water heater, Dan Primack reports this morning in Pro Rata.

Klau is co-founder of Onsemble, which today will announce $3 million in seed funding from Union Labs, Third Sphere, John Doerr, Cleo Capital, K9 Ventures and Incite.

The basic idea is to turn residential boilers into what's become known as virtual power plants — an aggregated group of connected devices whose usage is coordinated with electric grid operators.

😬 Offshore wind on the ropes: Equinor, Engie, EDP Renewables and Ørsted are among the developers warning that they may cancel offshore wind projects if the U.S. doesn't ease sourcing requirements for subsidies in the Inflation Reduction Act.

At issue: an IRA provision tying bonus incentives to using American-made equipment and locating projects in low-income communities. Reuters has more.

🌍 Africa climate summit wraps up: The multinational summit brought new commitments and stark reminders of major threats facing countries there, Axios' Ben Geman writes in Generate.

The final declaration calls for new global taxes to fund climate action, provisions to help indebted countries avoid default, and more assistance from development banks.

Africa-based startups receive just a tiny share of venture funding. And nearly all that capital flows to just five nations: Kenya, Tanzania, Ghana, Nigeria and South Africa.

4. Temperature check

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

• Boston Metal, the Boston-based sustainable steelmaking tech developer, closed its Series C at $262m with new investors Aramco Ventures, M&G Investments, Goehring & Rozencwajg, and Baillie Gifford. Breakthrough Energy Ventures, Microsoft's Climate Innovation Fund, BHP Ventures and Prelude Ventures joined. https://axios.link/44EjU8c

• Nuventura, a German provider of gas-insulated switchgear technologies, raised €25m in Series A funding. Mirova led, and was joined by Forward.one, EIC Accelerator and insiders IBB Ventures, ADB Ventures, Cycle Group, Future Energy Ventures and DOEN Participaties. https://axios.link/3La9JB6

• Paptic, a Finnish maker of wood fiber-based packaging, raised $25m in Series A funding from Ecolab and European Circular Bioeconomy Fund. https://axios.link/3LcN33l

• Lydian, a Cambridge, Mass.-based developer of CO2-derived fuels and chemicals, raised a $12m Series A led by Congruent Ventures and Galvanize Climate Solutions. Grok Ventures, Voyager Ventures, Union Square Ventures, Overture VC and Overlap Holdings participated.

• Okra Solar, a developer of solar grids in rural areas, raised $7.9m in Series A equity funding (plus $4.1m in debt). One Ventures led, and was joined by FMO, Susquehanna Private Equity Investments, Autodesk Foundation and King Philanthropies. https://axios.link/3sJFCdL

• SaaSGrid, a business intelligence and dashboarding tool for SaaS startups, raised $3.3m in seed funding led by founding investor Craft Ventures.

The startup began as an internal spreadsheet for Craft's deal diligence process. Once portfolio companies began seeing the metrics, they asked for access. What then became a fundraising tool turned into an operations dashboard and then turned into a startup. Keep reading.

• ABB Technology Ventures, the venture arm of Swiss tech and engineering giant ABB, acquired a minority stake in WindESCo, a Boston-based analytics software provider for wind turbines. https://axios.link/3LbUnfJ

• Bridgepoint agreed to buy New Jersey-based private equity firm Energy Capital Partners for an initial $1.05b in cash, stock and assumed debt. ECP has raised over $30b in capital since its 2005 formation. https://axios.link/47YdaoB

• KKR is in talks to invest $750m for a 45% stake in Zenobe, a British battery storage firm, per The Times. https://axios.link/3sP0P5J

• ICG, the Paris-based alternative asset manager, signed a definitive agreement to invest €400m in Enfinity, a Miami-based renewables services provider. https://axios.link/485LcqY

• Adenia Partners, a private equity firm focused on sustainable investments in Africa, said it's nearing a $400m close on its fifth fund.  https://axios.link/45RQ1SY

• Oman's sovereign wealth fund agreed to acquire a minority stake in Our Next Energy, a Novi, Mich.-based maker of EV battery tech and storage solutions. https://axios.link/45ArXnE

• Great Wall Motor is in talks to sell its stake in battery unit Svolt, which could be valued at around $6b, per Bloomberg. https://axios.link/44H0yPL

• Zeitview, the Santa Monica, Calif.-based energy assets inspection and analytics company fka Dronebase, acquired Toronto-based solar aerial inspection and analytics provider Heliolytics from NovaSource Power Services, an Austin renewables services provider. https://axios.link/480ROXx

5. Hot deals

• TPG named Anilu Vazquez-Ubarri as COO, succeeding Ken Murphy. Vazquez-Ubarri joined TPG in 2019, most recently as a partner and chief HR officer. https://axios.link/3EzfqVv

• Laurie Coben joined Rockefeller Capital Management as managing director and senior banker. Coben was previously senior managing director with the power, utilities and renewables investment banking group at Guggenheim Securities. https://axios.link/45Czhzl

• Waleed Elgohary joined Apollo Global Management as a partner in its climate equity team in London. Elgohary was previously managing director in the sustainable energies group at CPP Investments. https://axios.link/3sGmopl

• Norman Harrison joined the board of General Fusion, a Canadian nuclear fusion developer. Harrison was previously CEO of the UK Atomic Energy Authority. https://axios.link/3EqD5HE

• Narve Hansen joined Norwegian Offshore Wind, an industry advocacy group, to spearhead what the organization is calling Norway's first offshore wind accelerator. Hansen was previously director of global business development and collaboration at Singapore-based accelerator Antler. https://axios.link/3PrF4BR

• Jared Donald was named CEO of PureSky Energy, a Denver-based community solar and storage developer. Nicole LeBlanc was named COO. https://axios.link/3Z6ziJe

• Mack Schow joined Adenia Partners as head of investor relations. He was previously deputy head of equity Africa at German Investment Corp.  https://axios.link/3sNRWJG

6. It's personnel

🍁 Katie's here and ready for the fall news craze. Let's do it!

😴 Alan's toddler slept until 7am for two straight mornings — a big improvement from 5:45. Alan and Terry are now trying to decipher what they need to do to keep the streak alive.

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 at-home recycling enthusiasts.

September 06, 2023

1 big thing: Food-recycling scoop