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BFD Expert Voices - Climate Deals

BFD Expert Voices

Israeli billionaire and Mobileye co-founder Ziv Aviram plans to invest most of his new climate-tech fund into growth startups, he tells Katie.

Why it matters: Aviram's $1 billion to $2 billion fund could provide a new boost to mature companies in the climate-tech sector at a time when growth funding has fallen off a cliff.

Driving the news: Last week, Aviram announced his new fund, called EcoBridge, in partnership with former President Bill Clinton and fund co-founders Itai Lemberger (Bow Wave Capital Management) and Robert Citrone (Discovery Capital Management).

The fund will start investing after raising its first $500 million, expected sometime next year.

In addition to investing in more mature startups, Aviram says he plans to invest around 10% of the fund into early-stage.

Of note: Aviram and his co-founders are deciding which specific sectors to focus on, factoring in overall impact and number of startups in the space. He gave examples like agriculture and building materials.

"We can be involved in two, maybe two and a half fields, because we cannot be experts in everything."

Big picture: Aviram says he started to focus more on climate through his philanthropic work. He saw firsthand how many climate-tech startups needed funding.

"This is the most important thing that humanity has ever faced. I have to do something about this."

What's next: Raising money for a climate-tech fund is more challenging this year compared to previous years.

Aviram acknowledges the difficulties and says, "I don't think that we have the luxury to wait."

The bottom line: "Once you understand the potential outcomes of climate change, for me at least, it's clear that we have to act and act as quickly as possible," says Aviram.

1 big thing: Growth stage gets another billion

illustration of Ziv Avaram surrounded by colorful lines and photos of trees

Photo Illustration: Tiffany Herring/Axios; Photo: Photo: Ohad Romano

Industrial giant Honeywell has invested $27.5 million into grid battery maker ESS Tech, as part of a partnership for tech development and deployment, Katie writes.

Why it's the BFD: Companies are looking for new types of energy storage to pair with solar and wind that provides longer duration at a lower cost than lithium-ion batteries.

Details: ESS said Honeywell invested $27.5 million for close to 16.5 million shares, along with a warrant to buy up to another 10.6 million shares at $1.89 apiece. ESS Tech started trading on the NYSE via a SPAC in 2021.

ESS Tech's CEO Eric Dresselhuys said on a conference call that the deal will include Honeywell buying and reselling ESS's iron-flow batteries.

Honeywell has also made a purchase commitment of up to $300 million in ESS products by 2030 with a $15 million prepayment.

ESS, based in Wilsonville, Ore., and founded in 2011, will also take control of Honeywell's intellectual property around its iron-flow battery tech.

Big picture: Energy companies are installing batteries, both lithium-ion and new technologies, at a growing rate.

According to Wood Mackenzie, there was a record-breaking 1,510 MW and 5,109 MWh installed in the U.S. in the second quarter of this year.

Lithium-ion batteries can provide about four hours worth of storage, while long-duration energy storage like ESS's iron-flow batteries can deliver closer to 12 hours of storage.

On Friday, the Department of Energy funded nine long-duration energy-storage projects with $325 million.

2. The BFD: Honeywell backs big batteries

A crane lifts an ESS iron flow battery system into position on the desert floor, next to a solar plant in the Sacramento Municipal Utility District service area. 

A crane lifts an ESS iron-flow battery system into position next to a solar plant in the Sacramento Municipal Utility District service area. Photo: Courtesy of ESS.

Climate investors and founders spent Climate Week NYC sizing up the state of the market — and whether the chill of the past year has started to ease, Alan writes.

Plus: The Big Apple fly-in also marked a debut party of sorts for some of the newer climate-focused venture firms, among them Voyager Ventures and Overture VC.

Catch up fast: Climate Week started in 2009 as a small add-on to the UN General Assembly. It's since become a sprawling constellation of mini-conferences, one-off panels, cocktail hours and much else. 

Investors remain wary — cleaving the startup ecosystem between a handful of "haves" drawing the bulk of funding, and a larger pool of "have-nots."

"First-of-a-kind factories" and "Series B-plus" were the phrases of the week.  Both areas are seeing gaps in investment.

Everyone is keeping an eye on what's going to happen with AI.

Meanwhile, colleague Andrew Freedman attended the policy gatherings while Alan was meeting with investors. 

Andrew's take: "Progress is being made to decarbonize economies, but the pace and scale are nowhere as fast or sweeping as needed." 

3. The chatter at Climate Week: How you doin'?

Climate investors and founders chat ahead of a panel taking place in a window-filled penthouse in New York City.

Investors and founders chatting ahead of a panel last week atop The Standard East Village, hosted by Wireframe Ventures, Piva Capital and Overture VC. Photo: Alan Neuhauser

The tech giant is looking to hire a principal program manager to implement cutting-edge small nuclear reactors to power energy-hungry data centers, Alan writes.

Why it matters: The unusual job posting underscores how Microsoft sees nuclear energy as central to its clean-energy ambitions, along with renewables and batteries.

What's happening: The manager "will be responsible for maturing and implementing a global Small Modular Reactor (SMR) and microreactor energy strategy."

Context: Microsoft last year announced an agreement with Ontario Power Generation to buy clean-energy credits from the Canadian utility.

Ontario Power Generation is expected to be the first in North America to deploy a small modular reactor.

Meanwhile, investment in the technology has surged in recent years.

TerraPower, the small reactor developer launched by Microsoft co-founder Bill Gates, raised $750 million last year.

Catch up fast: Small modular reactors and tinier microreactors can be assembled in a factory and shipped to where they're needed, promising potential lower costs. 

4. Microsoft is seeking a nuclear energy chief

Illustration of a computer screen with a pixelated atom on it 

😬 Green hydrogen headwinds: "Stubborn cost pressures" and "slow" implementation of policy supports are posing serious challenges to low-carbon hydrogen production, Ben Geman writes in Generate.

Climate-friendly production — using renewable energy — met less than 1% of global hydrogen demand, a new report finds.

🚄 Brightline kicks into gear: The long-awaited new rail option between Miami and Orlando is finally running, Axios Miami's Martin Vassolo reports.

Brightline, a privately owned high-speed rail company, is trying to win over some of the 40 million-plus people who travel between Miami and Orlando each year — with about 90% of them driving. The trains run on biodiesel.

💥 Backlash to Britain's delay: Automakers criticized Prime Minister Rishi Sunak for his decision to postpone the country's ban on sales of new fossil-fuel cars, per Reuters.

The move, ahead of an expected difficult election next year, will do little to slow the country's transition to EVs — though it drew consternation over how it may disrupt investment certainty.

5. Temperature check

Illustration of an earth in space covered in red and blue meteorological color lines.

• Continuum Industries, an Edinburgh, Scotland-based startup that uses AI for energy infrastructure planning, raised a $10m Series A led by Singular and including Credo, Playfair, Techstart Ventures, and angels including executives from UiPath, Skyscanner, and SSE. https://axios.link/48v5mdW

• Traceless Materials, a German developer of eco-friendly plastic alternatives, raised €36.6m in Series A funding led by United Bankers and Swen Capital Partners and including GLS Bank, Hamburger Sparkasse and insiders Planet A Ventures, High-Tech Gründerfonds and B.value. https://axios.link/3PRfxCo

•  Cricket One, a Vietnamese edible-insect startup, closed an undisclosed "seven-figure" Series A led by Singapore-based investor Robert Alexander Stone, and joined by Cub Capital, per AgFunder News. https://axios.link/3EUz26V

• i(x) Net Zero invested $600k in Citron Energy, a waste-to-fuels maker. https://axios.link/3PMVPrr

• Global Lights Acquisition, a Beijing-based SPAC focused on sustainability, filed to raise $60m in a U.S. IPO. https://axios.link/3rptEpg

• Bird, the Miami-based e-scooter provider, said it would be delisted by the New York Stock Exchange for failing to keep its market cap above $15m for 30 consecutive days. It was scheduled to begin trading today on the over-the-counter exchange. https://axios.link/3Rv0IXx

• Xcel Energy, the Minneapolis-based utility, received a grant of up to $70m from the U.S.  Department of Energy to deploy two 10 MW/1,000 MWh long-duration energy-storage systems from developer Form Energy at retiring coal plants in Minnesota and Colorado. https://axios.link/4627iZP

• Alliant Energy, the Madison, Wisc.-based utility, received a grant of up to $30m from the DOE to deploy a 200 MWh energy-storage system using developer Energy Dome's CO2-based tech. https://axios.link/3PuiPKn

• Joby, the Santa Cruz, Calif.-based eVTOL developer, picked Dayton, Ohio, as the site of the company's first commercial-scale aircraft factory. https://axios.link/3ESE7fY

• Nissan said all of its new models in Europe will be fully electric, and the company will sell only EVs there by 2030. https://axios.link/3PQJVwE

• Jaguar Land Rover signed an agreement with Tesla to become the latest automaker to join Tesla's Supercharger network. https://axios.link/46rjrar

• Shake Shack, the NYC-based burger chain, announced plans to test sugarcane-based fry oil from Zero Acre, a San Mateo, Calif.-based sustainable cooking oil supplier. https://axios.link/3RxPoty

• AeroFarms, the Newark, N.J.-based vertical farming company once backed by Ikea and celeb chef David Chang, emerged from Ch. 11 bankruptcy after filing for protection in June, per AgFunder News. https://axios.link/3ZxFI4v

• Deep Sky, a Montreal-based carbon-removal developer, and Mission Zero Technologies, a DAC tech developer, announced a partnership to develop DAC sites in Canada. https://axios.link/3rk0jwv

• The European Union loosened forthcoming vehicle-emissions restrictions, stating the move was meant to avoid diverting investment from EVs to less-polluting internal combustion engines. https://axios.link/4551LAz

• Vietnam plans to restart its largest rare-earths mine next year, per Reuters. Blackstone Minerals is among the companies planning to bid for the project. https://axios.link/465cIDp

• Thailand Prime Minister Srettha Thavisin said the country is anticipating $5b in investment from Tesla, Google and Microsoft, per Reuters. Thavisin said Tesla is planning an EV factory; Google and Microsoft are planning data centers. https://axios.link/454tMbs

• Switching German airline Lufthansa's entire fleet to e-fuels would consume half of Germany's entire electricity generation, the company said yesterday. https://axios.link/45Zr8oC

6. Hot deals

• Matthias Aydt was named CEO of Faraday Future Intelligent Electric, the LA-based EV automaker. Aydt was previously head of product execution. He succeeds Xuefeng Chen, who was only named CEO last November. https://axios.link/3Pq2ypU

• Molly Montgomery was named acting CEO of AeroFarms. She is a venture partner at Grosvenor, per her LinkedIn. https://axios.link/3ZxFI4v

• Andrea Bernica was named chief people officer of Black & Veatch. Bernica was previously corporate counsel and chief of staff. https://axios.link/3PyvzQa

7. It's personnel

"Apple pie, baseball, moms — no one's really against us." 

Christopher Creed, chief investment officer for the U.S. Department of Energy's Loan Programs Office, describing the office's popularity among founders, investors and politicians.

Context: Creed was speaking last week at a cocktail reception hosted by venture capital firm Fifth Wall kicking off Climate Week NYC.

Separately: The wait time for the Loan Programs Office to approve an application is now about two years.

8. Quote of the day: Approval ratings

👀 Situational awareness: Our Axios Pro colleagues from the Energy Policy team published an AI whitepaper on the critical legislation, lawmakers and companies to watch right now.

"Nobody is really in charge, and everybody wants to have their voice heard."

🎃 Katie and the family visited pumpkin patches this weekend!

🦴 Alan yesterday bought his first-ever Halloween decorations. The centerpiece: A life-size plastic skeleton that the toddler immediately named "Benny the Dog." (There is also a rocking horse named Benny the Dog. And an uncle whose dog is named, yes, Benny.)

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 billionaires.

September 25, 2023

1 big thing: Growth stage gets another billion