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This newsletter kicked off the New Year with some predictions and sectors to watch from climate tech investors. We didn't have enough space to publish them all, so here's Part II of that query, assembled by Alan and Katie.

Meera Clark, Redpoint Ventures: "We will transition into a new era where every company is an energy company: they'll increasingly turn to software and data infrastructure solutions to inform their own energy enablement, power procurement, and energy footprint optimization."

Matt Eggers, Prelude Ventures: "Driven by the promise of maturing technology and massive markets, large investors who pulled back from climate tech beginning in 2022 — sovereigns, private equity firms, hedge funds, mutual fund companies — start to return in 2024."

Shayle Kann, Energy Impact Partners: "The electricity supply and transmission bottleneck will come even more into focus as old generation assets retire, interconnection queues remain clogged, and a wave of new large load requests arrive on utility doorsteps."

John Tough, Energize Capital: "I expect (and we are already seeing) a wave of consolidation; industry leaders with strong capitalization will be rewarded in 2024."

Milo Werner, Engine Ventures: "2024 will be the year investors realize the metals and materials that built the modern world and powered the American economy to superpower status over the past 100 years will not power the next 100 years."

Rick Zullo, Equal Ventures: "2024 will be about the rotation away from investing in frontier solutions, back to what VCs do best: digital. We'll see tremendous consolidation of frontier/hardware solutions as private companies come to terms with public market comps and funding availability dries up, reverting VCs back to less capital-intensive digital solutions."

1 big thing: 👀 Looking ahead, part two

Illustration of an Earth stylized as a magic 8-ball with a result that reads, "Don't count on it."

While venture capital funding across sectors dropped last year, energy storage saw a substantial jump, Katie writes.

Why it matters: Investing in energy storage is having a moment, as governments globally provide support and companies deploy batteries for grid storage and electric vehicles.

Details: According to a report from research and communications company Mercom Capital Group, VC firms funneled $9.2 billion into 86 deals in energy storage, which was a "historic high" and a 59% increase from 2022.

Out of those 86 deals, 33 deals were for battery tech, including 18 deals, and $2.6 billion, for lithium-ion batteries. Other novel forms of energy storage that brought in funding include thermal batteries and gravity-based storage.

The biggest VC-funded energy storage deals of 2023 were $1.08 billion for London-based energy storage and EV fleet developer Zenobe; $1 billion for Carson City, Nev.-based battery recycling and components maker Redwood Materials; $944 million for Korean EV battery maker SK On; $905 million for French battery maker Verkor, and $622 million for Chinese grid battery storage company Hithium.

At the same time that VC funding for energy storage soared, total overall "corporate" funding — which includes VC, private equity, public market, and debt financing deals — dropped by 28% from 2022 to $19 billion raised in 120 deals.

Zoom in: Mercom's CEO Raj Prabhu explained the discrepancy between the VC growth and the corporate dollar drop as: "public market and debt financing are typically a lot more sensitive to interest rates than VC funding."

In addition, one large public market deal, LG Energy Solutions' $10.7 billion IPO, skewed the 2022 data to make corporate energy storage funding particularly high that year.

Big picture: Incentives from the Inflation Reduction Act and the Bipartisan Infrastructure Law helped juice the U.S. market for energy storage and bring private funding off the sidelines.

As one investor put it: the IRA cannon was pointed at all things batteries and EVs last year.

2. The BFD: VCs plowed $9.2B into energy storage

Illustration of a battery icon with hundred dollar bills as the bars indicating that it's full. 

Chunk Foods, a plant-based proteins maker, has raised $7.5 million in additional seed funding to bring new products to market, CEO Amos Golan tells Axios Retail Deals' Kimberly Chin exclusively.

Why it matters: Consumers are still showing appetite for plant-based alternatives, driving investment into new technologies in the market.

Details: The new funding is led by Cheyenne Ventures, bringing its seed-round sum to $22 million.

The company has raised over $24 million in total funding from Fall Line Capital, The MIT E14 fund, Key1 Capital and Robert Downey, Jr.-backed FootPrint Coalition.

By the numbers: Chunk's revenue run rate is going to be in the millions by year's end, Golan says. Next year, it expects to exceed $10 million.

How it works: Chunk has developed a plant-based protein that emulates the texture, color and taste of its meaty counterpart through fermentation and food-grade microorganisms.

It produces muscle-cut products, like steaks, roasts and kebabs, with less fat and calories but about the same amount of protein.

The goal is to create a "one-to-one replacement" with meat that can be used in any cuisine and as another dish, Golan says.

What's next: Chunk —which currently serves fine dining, fast and casual restaurants — has plans to expand into retail as well, Golan says.

Read the full story on Axios Pro: Retail Deals.

3. Serving up dollars for plant steaks

Illustration of a steak served on a Petri dish with a knife and fork

✈️ World's first ethanol-to-jet fuel plant: LanzaJet, the sustainable aviation fuel maker spun out of LanzaTech, officially unveiled a $200 million plant in rural Soperton, Georgia, yesterday that will turn ethanol into sustainable aviation fuel.

The plant is supposed to produce 10 million gallons of SAF and renewable diesel per year and will use biofuel made from American-grown corn as well as "advanced technologies."

🌬️ NJ tries again for offshore wind: New Jersey energy regulators have approved two new offshore wind projects after Danish wind developer Orsted scrapped plans to build two farms last fall, reports AP.

Dubbed Leading Light Wind and Attentive Energy, the projects would generate enough electricity to power 1.8 million homes and are planned for farther offshore than the earlier projects that received opposition from local communities.

Meanwhile, Orsted said it plans to buy out its joint venture partner Eversource Energy in an offshore wind farm off the coast of New York.

🛑 Hitting the brakes on LNG exports: The Biden administration plans to pause any decision on whether to approve Venture Global's proposed export terminal for liquefied natural gas, as well as other such proposals, Ben Geman writes this morning in Generate.

The move signals that the White House plans to step up scrutiny of LNG exports. The fuel is cleaner than other fossil fuel alternatives but still generates greenhouse gas emissions.

🚀 Tesla's battery biz growth to outpace EVs: As expected, Tesla's energy storage business is now growing more quickly than its EV business, according to its latest earnings report.

Energy storage installations for 2023 more than doubled compared with 2022, while the unit's profits nearly quadrupled.

At the same time its overall volume growth, powered by EVs, is expected to slow down this year.

4. Temperature check

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

• Infinite Roots (fka Mushlabs), a German developer of mycelium-based food products, raised a $58m Series B, led by the European Innovation Council and Dr. Hans Riegel Holding, the holding company of gummy bear giant Haribo. REWE Group and Betagro Ventures joined. https://axios.link/3vKS0vn

• Eatable Adventures, a Madrid-based food-tech accelerator, raised €15m toward a targeted €30m for its Europe Foodtech Acceleration Fund I. https://axios.link/3UegcAt

• Elo Life Systems, a Durham-based molecular farming startup for crop protection, raised $20.5m led by DCVC Bio and Novo Holdings, joined by Hanwha Next Generation Opportunity Fund, AccelR8, and Alexandria Venture Investments. https://axios.link/42dP5aL

• Ceezer, a Berlin-based carbon credits management provider, raised a €10.3m Series A led by HV Capital, joined by Norrsken VC, Picus Capital and Carbon Removal Partners. https://axios.link/48NyInH

• Sirius, a Dutch software developer for managing sustainability data in the mining sector, raised a €1.2m pre-seed round from Fund F, BlackWood, WEPA Ventures and Techstars. https://axios.link/3S8Xzvf

• Insurance firm QBE North America launched an early-stage QBE Possibilities Fund, which has made investments in Azolla Ventures and ReGen Ventures. https://axios.link/3HyG2I4

• President Biden vetoed legislation that would have reversed his administration's waiver of domestic sourcing requirements for government-funded EV charging stations. https://axios.link/4bbux6L

• GM and Honda started production at their $85m joint hydrogen fuel cell production facility, FCSM, in Brownstown, Mich. https://axios.link/4b6OtHT

• Westinghouse will supply technology for two of four nuclear reactors that Ukraine plans to start building this summer or fall, per Reuters. The other two reactors will use Russian equipment. https://axios.link/3Se1Qxf

• Energy giants Ørsted, Equinor, and BP are expected to be among the offshore wind developers submitting bids today for a new solicitation off New York's coast. https://axios.link/3vR4EJq

5. Hot deals

• Jan Toschka was named CEO of Sasol and Topsoe's sustainable aviation fuels JV. Toschka was previously president of global aviation for Shell. https://axios.link/3SuVfA1

• Jean Nelson-Houpert joined Volt Energy Utility as CFO. Nelson-Houpert was previously CFO and interim CEO at the DC Green Bank. https://axios.link/47IjLSA

• Bob Watkins was named chief information officer of Divert. Watkins was most recently chief business and technology officer at Triumvirate Environmental. https://axios.link/4b7njki

• Laura Jarvie was appointed head of Scotland at Cerulean Winds, a London-based infrastructure developer with leases in place for floating offshore wind sites. Jarvie was previously head of energy transition at North Sea Midstream Partners. https://axios.link/3tWKYDr

6. It's personnel

🫙 Sip of the week: Katie cracked open a tallboy can of Liquid Death this morning so she could "murder her thirst."

🤤 Katie is going to make rice krispie treats today, the world's easiest kid treat.

📚 Alan is nearing the end of Isaacson's "Einstein" biography from way back in 2007. He's seeking some fiction recs. 

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 futurists.

January 25, 2024

1 big thing: 👀 Looking ahead, part two