Axios Pro: Climate Deals

February 15, 2024

Axios Pro Exclusive Content

It's Thursday! Almost there.

🥃 Sip of the week: This Classic Old Fashioned from Erin Petrey, a director at Inspiration Mobility and, as it happens, cocktail editor at Bourbon & Banter.

  • "Yes, I did indeed write over 5k words about the Old Fashioned," Petrey says. Got a submission? Send it our way!

1 big interview: Fueling a U.S. boom

Voyager Ventures co-founders Sierra Peterson and Sarah Sclarsic. Photo illustration: Tiffany Herring/Axios; Photos: Courtesy of Voyager Ventures

Government subsidies and corporate ESG mandates aren't enough to keep a climate startup alive, according to Voyager Ventures.

What they're saying: "Competitive unit economics are more important than ever this year," the firm's co-founder, Sierra Peterson, tells Alan in this week's Expert Voices Q&A.

Of note: Peterson and her co-founder Sarah Sclarsic recently announced that their firm had raised $100 million for a second fund to back sustainability startups.

This interview was lightly edited for length.

What's been the big news in climate tech this month?

Sierra: "We're beginning to see a U.S. manufacturing boom. How are we going to enable all that energy draw, coupled with demands on the grid from compute and artificial intelligence?

  • Given the long timelines in building out transmission and power, what does that mean for investment decisions we're making today?"

Sarah: "Domestic manufacturing, energy security, supply chains — they're questions about, fundamentally, how the U.S. maintains primacy in energy, semiconductors and technology more broadly."

What would you add to these narratives?

Sierra: "We take for granted that the United States is going to be an economic powerhouse for decades to come. Other world powers are playing the geopolitical game. It sounds doom and gloom, but the stakes are high."

Sarah: "Figuring out how to produce nickel, copper, other metals in a way that doesn't involve huge amounts of emissions and toxic processes isn't just a question of ESG credentials. How do we actually build a supply chain we can sustain domestically and bring costs down?"

By contrast, what's going undernoticed?

Sierra: "Companies that are just assuming in their unit economics models that they'll just be able to access cheap, abundant renewables. This is zero-sum for the time being: getting electrons to wherever you're going to manufacture should not be taken for granted."

Sarah: "There's under-recognition of the importance of batteries — which may seem an odd comment to make, given all the announcements of gigafactories and the rise of electric vehicles.

  • Batteries that are capable of decarbonizing heat for industrial production, providing local grid backup, or commercial and industrial power backup — recognition is lagging the reality of technological advancements and cost declines."

Three fun things:

💼 First jobs: Dishwasher at a summer camp (Sierra); an admin at Harvard Medical School (Sarah).

👑 Proudest investments: Residential solar company Bright; and carbon-capture-for-trucks developer Remora.

🤦‍♀️ Facepalm investments: Not investing early in eventual unicorns Arcadia, Perfect Day, or Benchling.

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