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BFD Expert Voices - Climate Deals

BFD Expert Voices

Exit deals (IPO, M&A)  involving startups in renewable energy, hydrogen, carbon credits, electric vehicles, and other climate tech sectors. Data: PitchBook; Chart: Axios Visuals

The number of U.S. climate startups that were acquired or went public this year fell to a three-year low, per PitchBook.

Why it matters: "You've gotta exit your deals to produce returns," DCVC managing partner Zachary Bogue tells Alan.

Driving the news: This year saw a total of 51 IPOs and M&A deals involving U.S. climate startups, per PitchBook data, a nearly 40% drop from 2022, which was a 10-year peak.

Solar tracker manufacturer NextTracker posted one of the year's only IPOs in climate.

Mobility and software startups drove much of the year's M&A activity, such as Shell's acquisition of charging network Volta, Ford's purchase of charging tech developer Auto Motive Power, and ConMet's acquisition of trucking efficiency startup TruckLabs.

👀 What we're watching: An uptick in strategic M&A in the space.

"We have a couple thousand corporates that have made net-zero commitments," Clean Energy Ventures managing partner Dan Goldman tells Alan. "What are they actually doing with their capital to make that happen?"

1 big thing: Exit numbers falling fast  

The struggles in the rooftop solar market have extended to even the most premier U.S. brands, like SunPower, Katie writes.

Why it matters: Despite record growth in home solar in the U.S., the companies that install those panels on rooftops are getting hit by high interest rates and a slowdown in sales.

Driving the news: American solar giant SunPower, which is majority-owned by French energy giant TotalEnergies, on Monday issued a going concern warning and said it breached a credit agreement.

The company's shares plunged as much as 41% on the news. SunPower stock rose slightly this morning to $4.40.

Clean energy stocks across the sector, including offshore wind, electric vehicles and hydrogen, have fared worse than the broader market and fossil fuel energy stocks.

Recent changes in California's net metering rules mean the state is expected to see solar installations slow down.

Big picture: Researchers are predicting a decline in residential home solar installations in the U.S. in 2024 before growth resumes in 2025, according to the Solar Energy Industries Association (SEIA) and Wood Mackenzie.

Yes, but: At the same time, a record 210,000 home solar systems were installed in the third quarter of this year in the U.S.

Including solar for utility and commercial sectors, solar accounted for close to half of all new electric generating capacity added in the U.S. in the first three quarters of 2023.

2. The BFD: Rooftop solar companies getting crushed

Illustration of a house made completely out of solar panels. 

🚚 Prison time for Nikola founder: Nikola's high flying founder Trevor Milton was sentenced to four years in prison, as well as a $1 million fine and forfeiting of his ranch, following his fraud conviction on Monday.

The court said he lost more than $660 million combined, much of it from retail investors, and lied to inflate Nikola's stock.

🌊 Private equity firm taps spring water: A little known private equity firm, BlueTriton Brands, owns Poland Spring, Arrowhead and Deer Park and is worrying environmentalists as it grows by drawing on springs across Florida, Maine, Colorado, Michigan, Texas and South Carolina, reports Bloomberg.

Other big bottle water players like PepsiCo mostly buy tap water from cities and purify it. A BlueTriton spokesperson tells Bloomberg: "Responsible and proactive water resource management is central to our company."

💰 Cash crunch ahead for EV startups: At least 18 EV and battery startups that went public in recent years are at risk of running out of cash by the end of 2024, per a WSJ analysis.

Almost all went public via SPACs. The WSJ looked at 43 companies. 18 of them could operate beyond 2024 but face stock pressures.

3. Temperature check

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

• Agtonomy, an SF-based software and services provider for autonomous agriculture, raised a $22.5m Series A led by Momenta, joined by Doosan Bobcat North America and Toyota Ventures. https://axios.link/41qrq6F

• Ampersand, a battery-swapping motorcycle startup based in Rwanda, has raised $19.5m led by Ecosystem Integrity Fund, joined by Acumen and Hard Edged Hope Fund. The company also raised $7.5m in debt from Cygnum Capital's Africa Go Green Fund.

• Green Eagle Solutions, a Spanish automation software developer for the renewables sector, raised a €6m Series A led by Spanish private bank A&G, joined by existing investors Kibo Ventures and SET Ventures. https://axios.link/3RoX3c2

• Indian EV charging company Exponent Energy has raised funding from TDK Ventures. https://axios.link/4auwz1k

• Friendlier, an Ontario-based reusable packaging company, raised a $5m seed extension co-led by Relay Ventures and Garage Capital. https://axios.link/4aopzTV

• Cambia Capital, a sustainability-focused real estate investment firm, launched with a $20m investment. https://axios.link/3v660iY

• Vast Renewables, an Australian concentrated solar energy developer, completed its SPAC merger with Houston-based Nabors Energy Transition Corp. https://axios.link/3RMmyFF

• Micromobility.com, the NYC-based e-scooter and e-bike retailer and rental provider, received notice from Nasdaq that the exchange will suspend trading of the company's common stock Dec. 20 because it fell below $1 per share. https://axios.link/476pXUd

• Saeta Yield, a Spanish portfolio company of Brookfield, is seeking to sell wind and solar plants located in Spain and Portugal that could fetch €1.5b, per Reuters. https://axios.link/3GOoZ4d

• Battery-swapping startup Gogoro says it's working with Uber Eats in Taiwan to have drivers use the electric scooters, a deal which the companies say is worth $30m. https://axios.link/3TrjPTi

• JSX, a regional carrier based in Dallas, Texas, says it plans to buy 332 hybrid-electric aircraft from manufacturers Electra, Aura Aero, and Heart Aerospace. https://axios.link/3RsIUKX

• Canadian carbon removal developer Deep Sky signed an agreement with Dutch DAC developer ReCarbn to run a ReCarbn unit at Deep Sky's test site in Quebec. https://axios.link/47ay5D0

• Moxion Power, the Richmond, Calif.-based mobile battery storage manufacturer, said its battery units were used on the set of the Amazon MGM Studios' "Candy Cane Lane," starring Eddie Murphy. https://axios.link/3trXytZ

4. Hot deals

• John Jung was named president and COO of Advanced Ionics, a Milwaukee-based green hydrogen electrolyzer developer. Jung was previously president of Energy Vault Solutions. https://axios.link/3TpPG6S

• Ignacio Bincaz also joined Advanced Ionics as chief commercial officer. Bincaz was previously head of North America for H2Pro. https://axios.link/3TpPG6S

• Mindy Ren has joined direct air capture startup Spiritus, based in Los Alamos, New Mexico, as Head of Carbon Removal Infrastructure. Ren previously led onshore and offshore construction worldwide for ExxonMobil. https://axios.link/3v4BmGT

• Osman Ahmed joined African Agriculture on its board of directors. Ahmed is head of private equity at 10X Capital. https://axios.link/3tfdFet

• BP's interim CEO Murray Auchincloss is on the short list to succeed ousted chief Bernard Looney, as well as head of trading and shipping Carol Howle and head of customers and products Emma Delaney, per Reuters. https://axios.link/4ap8vx5

5. It's personnel

🎄 Trivia Tuesday: Who's credited with popularizing holiday string-lights? Bonus high-five if you know the year that holiday lights started transitioning to LEDs.

Last week's answer: Kior was the failed biofuel startup that had a plant and a loan from Mississippi.

🍪 Katie has been eating too many Xmas cookies this week.

⏰ Alan slept through his alarm this morning for the first time in maybe 20 years. Time for holiday break.

Thank you to Michael Flaherty and Chris Speckhard for today's edits.

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

December 19, 2023

1 big thing: Exit numbers falling fast