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BFD Expert Voices - Climate Deals

BFD Expert Voices

On a cold, windy day, the co-founder and CEO of Navier, Sampriti Bhattacharyya, took Katie for a ride in the startup's electric, "flying" hydrofoil boat in the San Francisco Bay.

Why it matters: With the battery and the hydrofoils, the boat can be 10 times more efficient than a gas-powered boat and if it takes off could unlock new avenues of maritime transportation.

Driving the news: This week San Francisco-based Navier announced a deal to shuttle Stripe employees between Larkspur in the North Bay and Oyster Point in South San Francisco.

The battery and the hydrofoils will offer a quiet, smooth ocean ride for up to 6 Stripe employees, helping them get out of the bumper-to-bumper commuter traffic on the road.

Bhattacharyya says Navier is interested in having more of its boats used around the marine waterways of the Bay Area as well as other cities like New York and Miami.

She added that the company is talking to Sausalito about piloting routes into that city's bay.

Navier CEO and co-founder Sampriti Bhattacharyya and head of operations Sam Seder riding in the N30, the company's electric hydrofoil boat on San Francisco Bay. Photo: Katie Fehrenbacher/Axios

Details: On Thursday afternoon, Navier head of operations Sam Seder drove Katie and Bhattacharyya across the bay,

It was pretty choppy. Then, after hitting 16 knots (about 18 mph), the boat lifted onto the hydrofoils and instantly delivered a smooth ride.

"It's a boat and it's a plane," Bhattacharyya noted, explaining how the foils act as wings to lift it up at the right velocity.

"Batteries and hydrofoils go hand in hand," she added. The boat's efficiency is 10 times greater than gas-powered ones, she said.

Big picture: Bhattacharyya is highly focused on production this year, aiming to get Navier's boats out to more customers and into bays around the world.

The company says it has raised $12 million in seed funding from high-profile investors like Google co-founder Sergey Brin, Android co-founder Rich Miner, singer Will.i.am and ocean climate investor Propeller.

What's next: Navier will likely need to raise more funding to make more of its boats and meet customer demand.

1 big thing: Navier's "flying" electric ferry

Navier's electric hydrofoil boat driving in the San Francisco bay. Photo: Katie Fehrenbacher/Axios

A new U.S. market for clean energy tax credits generated $9 billion in trading activity last year, per a report this week from clean energy financing site Crux, Alan writes. 

Why it's the BFD: The robust market is providing new sources of capital for wind, solar and other projects that might have previously struggled to find financing.

Catch up fast: Tax credits have long been vital to the clean energy sector. But they could only be used by companies generating enough profit to absorb all the credits — making them relevant to only a handful of companies.

The Inflation Reduction Act in 2022 enabled renewable energy companies to sell or "transfer" the credits, opening the sector to a far greater number of backers.

A wider array of technologies were also made eligible.

The latest: Just one year after the IRA, tax credit trading volume reached $7 billion to $9 billion, per the Crux report.

The intrigue: About 80% of the transactions had a face value of $50 million or less, suggesting that transferring the credits "is leveling the playing field for smaller projects," Crux said in its report.

Of note: Recent deals in the space include solar manufacturer First Solar's agreement in December to sell $700 million in manufacturing credits to fintech Fiserv.

Renewables developer Arevon told WSJ it's pursuing about $2 billion in projects that will qualify for about $500 million in tax credits.

2. The BFD: The tax credit market is booming

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

CrowdSolve is raising $500,000 to give a second chance to climate startups that have been rejected by mainstream accelerator programs, CEO Tim Wolters tells Alan.

Why it matters: The incubator's small investments can provide a lifeline to young startups that might otherwise go under.

How it works: CrowdSolve asks accelerators such as TechStars and the Los Angeles Cleantech Incubator to send it promising pre-seed startups that they've turned down.

If those startups can secure other investors, CrowdSolve affiliate 1000Gretas.org will pitch in $25,000 in non-dilutive grant funding.

Yes, but: Founders don't need to have been rejected to join CrowdSolve. The Denver-based incubator offers a free automated curriculum and mentoring for new founders.

CrowdSolve makes money by selling paid subscriptions to live programming, in addition to its automated curriculum.

Graduates include Latimer Controls, a systems provider for remotely controlling solar panels, which was subsequently accepted to TechStars. It's now pursuing a pilot with a Hawaii utility.

The latest: CrowdSolve began fundraising in September and expects to close by the end of Q1. It previously raised $500,000 from traditional investors and a crowdfunding campaign.

There are about 200 climate startups moving through the incubator's programming, Wolters says.

Of note: Wolters himself went through TechStars with RoundPegg, an employee engagement service he sold in 2017.

What's next: CrowdSolve plans to raise a traditional accelerator fund in Q3, Wolters says. "We will roll existing investors in CrowdSolve into that fund, giving them two ways to gain a return on their investment."

3. Exclusive: Second-chance incubator

Illustration of a sprout with a life preserver thrown over it.

Jan. 16 — Private equity giant General Atlantic announced on Tuesday that it's buying London-based buyout firm Actis in a move aimed at expanding its climate-focused infrastructure deals, Alan wrote.

Why it matters: General Atlantic is joining BlackRock in buying its way to climate investing expertise and resources.

Jan. 17 — Saudi Arabian oil giant Aramco is injecting $4 billion into its VC arm in an attempt to expand the kingdom's economy beyond oil, wrote Katie.

Why it matters: The massive fund could provide much-needed financing for climate tech companies in a year that could remain challenging for fundraising.

Jan. 18 — Carbon removal startup 280 Earth, a spin-out of Google's Moonshot Factory X, is set to officially launch, with backing led by former Facebook CFO Gideon Yu, Axios learned.

Why it matters: The company is among those developing so-called direct air capture, a technology that has attracted a wave of investment and government support for pulling carbon dioxide directly from the air, wrote Katie.

4. 🗞️ Catch up quick

🔌 More EV charging incentives: Homes and businesses could get tax breaks up to 30% for installing EV charging equipment, under new regulations that the U.S. Treasury Department plans to develop, Axios' Ben Geman writes in Generate.

About 2 in 3 Americans will be eligible for the incentives. The move comes one day after the Transportation Department announced nearly $150 million in grants to repair and replace 4,000 existing charging ports, and a week after that agency issued $623 million in grants to install new chargers.

🏛️ Potential U.S. carbon tariff moves ahead: Four Republicans joined Democrats on a Senate committee to advance the PROVE IT Act, which would order the Energy Department to study industrial greenhouse gas emissions in the U.S. and around the world, Axios Pro colleague Nick Sobczyk writes in Energy Policy.

The bill could lay the groundwork for instituting a carbon tariff on imports — something GOP lawmakers generally oppose. But with the EU having instituted a similar measure last year, the bill's supporters say a response from the U.S. is needed.

✍️ Easy on the anti-ESG: A coalition of center-right and free-market groups sent a letter to House Financial Services Committee leaders yesterday arguing that legislators shouldn't "pass more bans or mandates targeting the investment decisions of individuals, pension funds, or businesses," Nick also writes.

The letter, shared exclusively with Axios, aims to cool Hill conversation around ESG investing. Using it as a political bludgeon, they warn, will ultimately hurt taxpayers and public pension funds.

💼 The new startup hotspots: The Midwest and Mountain West are America's latest new-business hotspots, Axios colleagues Alex Fitzpatrick and Alice Feng report.

Colorado (+115%), North Dakota (+37.7%) and Iowa (+33.7%) had the highest  year-over-year change in new business applications between December 2022  and December 2023, per seasonally adjusted Census Bureau data. Georgia (-9.9%), Louisiana (-8.6%) and Mississippi (-6.4%) saw the largest declines in growth.

5. Temperature check

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

• Deep Green, a London-based heat-to-energy developer for data centers, raised £200m from Octopus Energy. https://axios.link/48HdMyI

• Land Moto, a Cleveland-based electric motorcycle startup, raised $3m led by an SPV called Nunc Coepi Ventures. https://axios.link/48AwcRJ

• Revo Foods, an Austrian startup making 3D-printed food, is raising a €1.5m crowdfunding campaign through April 18. https://axios.link/423IVdg

• Vyld, a Berlin startup making biodegradable tampons from seaweed, raised an undisclosed seed round. https://axios.link/3vRbPkw

• 3DEO, an LA-based additive manufacturer, received an undisclosed investment from the Development Bank of Japan and Seiko Epson. https://axios.link/48zTkjc

• Blue Earth Capital, a Swiss impact investor, raised $378m for climate investments, including $308m for a growth fund.

• Siemens acquire Heliox, a Dutch developer of DC fast charging equipment, from private equity firm Waterland. https://axios.link/3Ox5Rw3

• Hunch Technologies, an urban air mobility and eVTOL developer for the India market, agreed to go public at an implied $223m enterprise value via Direct Selling Acquisition. https://axios.link/3S5pr3p

• Ford is cutting production of its electric F-150 after seeing weaker than expected demand. https://axios.link/47HNlaV

• Jeep teased its first EV for the U.S. market, an all-electric version of the upmarket Wagoneer, expected to arrive this fall. https://axios.link/3U603x2

• Swedish battery maker Northvolt said it plans to source cobalt from the Democratic Republic of Congo, where mining of the metal is associated with child labor and other human rights abuses. https://axios.link/47C0AKc

The company says it's joined a local organization to improve mining conditions.

6. Hot deals

• Julius Luehr was promoted to partner at German VC Acton Capital. Luehr was previously principal. https://axios.link/48OrMqg

• Jodi Manning has been promoted to CEO of carbon credit nonprofit Cool Effect. Manning was previously an executive at Cool Effect. https://axios.link/422CJCj

7. It's personnel

"In the US, if you produce 1 kilo of green hydrogen, you get 3 dollars. In Europe, I need to submit a room full of paper."

That was Miguel Stilwell d'Andrade, CEO of Portugal's largest utility, EDP, lamenting the challenges of completing new clean energy projects in Europe.

The EU is seeking to produce 10 million metric tons of hydrogen made with renewable energy by 2030. It currently produces about 300,000 tons, per Reuters, which reported on the CEO's comments at the World Economic Forum.

EDP has a pilot hydrogen project in Brazil, and it plans to develop a hydrogen plant south of Lisbon.

8. Quote of the day: The paper chase

🚤 Katie wishes she could ride on more boats!

🎵 Today in toddler milestones: The kiddo requested a Bruce Springsteen song for the first time. The girl respects her New Jersey heritage.

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 hydrofoilers.

January 19, 2024

1 big thing: Navier's "flying" electric ferry