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BFD Expert Voices - Climate Deals

BFD Expert Voices

🌡️ Situational awareness: Global average temperatures for the first time exceeded 1.5 degrees Celsius above the pre-industrial era for 12 straight months. 

❓ Tuesday trivia: How many companies submitted bids to rebuild the still-shuttered Washington Bridge in Rhode Island?

Last week's answer: A Soviet Tu-155 aircraft in 1988 became the first aircraft to complete a successful hydrogen-powered flight.

Data: Sightline Climate; Chart: Tory Lysik/Axios Visuals

Investor appetite for early-stage and growth rounds continued to wane through the first half of 2024, per data from research firm Sightline Climate.

Why it matters: The chilly venture market of the past year or two had driven investors to earlier-stage rounds — stages that are now themselves facing pressure.

The big picture: Founders are facing particular trouble raising Series B rounds, which often occur as startups seek much bigger checks to expand from early development to initial prototypes or production. 

By the numbers: Series B investment through H1 2024 plummeted 24% from the same period a year ago, as deal count similarly fell 28%. 

The average time to close a Series B soared to 26 months — more than twice as long as three years ago. 

Separately: Growth rounds, often funding expansion for a startup's first factory or scaled production, dropped 33%.

Early-stage investment in seed and Series A rounds meanwhile ticked down 12% and 10%, respectively.

Between the lines: It's rough out there, an experience reflected in our conversations with investors and founders. (The most common question Alan hears lately: "How is everyone else doing?")

Yes, but: Startups that found traction with investors during their Series B rounds managed to close larger raises — suggesting "growth capital continues to recognize performing companies," Sightline contends. 

Plus: Some companies pursuing growth rounds have found funding beyond venture capital. 

Rondo Energy, for example, closed $75 million in grant funding and debt financing — figures excluded from data tracking venture investment. 

Upstage, downstage

ZwitterCo, a developer of advanced membranes for water treatment, raised a $58.4 million Series B, the company tells Axios.

Why it's the BFD: Founders and investors commonly say they want to "invest in water"; figuring out how to do so while making money has proved a challenge.

The big picture: ZwitterCo says it's developed efficient membranes that last longer than conventional tech. 

The Woburn, Mass.-based company chiefly sells its membranes to power generators, meat and poultry plants, dairy processors and other industrial customers. 

Driving the news: Evok Innovations led ZwitterCo's all-equity round. It closed in May, concluding a raise that started in Q4 2023. 

DCVC, BHP, Munich Re Ventures, Siteground, HG Ventures and Blue Horizon Advisors participated.

Zoom in: Evok Innovations partner Naynika Chaubey joined ZwitterCo's five-member board.

Funding in the membrane

Illustration of three droplets of water, with different emojis on them.

ESG software startup Scaler has raised a $10 million Series A to continue to develop its product and expand internationally, the company tells Axios.

Why it matters: Many governments around the world are implementing mandates that companies need to collect and report this data in the coming years. 

The big picture: AI is increasingly at the core of new software for collecting and managing ESG data.

How it works: Scaler's software collects ESG data from disparate sources, gets the data ready for reporting purposes, and uses that data to help customers make sustainability decisions, like replacing windows or adding solar panels. 

The company's customers are real estate investors and asset managers including Edmond de Rothschild, Patrizia, and Bouwinvest. 

AI can provide better access to ESG data, and users can employ that data to make better decisions, says Scaler's founder and CEO Zlatan Menkovic. 

Zoom in: Scaler, based in Amsterdam and New York, raised the round from lead investor Plural, a European-focused VC firm.

Exclusive: Real estate AI

Illustration of a welcome mat decorated with a green leaf 

🔋 LPO's next commitment: Entek Lithium Separators received a conditional $1.2 billion loan commitment from the Energy Department's Loan Programs Office to build a factory in Terre Haute, Ind.

Entek's lithium-ion separators are mostly used in electric vehicle batteries. The company's new factory will provide 635 operational jobs once online, per LPO.

🥽 Joann's shift at the Ford factory: "I'm wearing mixed reality goggles, and a disembodied voice is telling me to check the wiring harnesses on the 2.0-liter engine in front of me, inside Ford's Dearborn engine plant in Michigan."

Our What's Next colleague Joann Muller experienced firsthand how Ford is using mixed reality technology on its factory floor. Very neat.

☀️ Qcells' supply chain conundrum: A Bloomberg report shines a spotlight on the supply chain of a Qcells factory in Georgia, operated by South Korea's Hanwha Solutions Corp. The factory is backed by hundreds of millions of dollars in U.S. government support.

The report says the factory uses base components from China and has received a portion of its polysilicon from a subsupplier that appears on a list of sanctioned entities that have used forced labor.

The findings highlight the challenge of policing a supply chain in an era of globalization.

Temperature check

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

• The European Investment Fund, the European Investment Bank's VC arm, committed €350m to Kembara, a planned €1b fund that's set to be Spain's biggest VC fund, targeting climate and deep-tech startups in Europe. axios.link/3LhTQZ2

• Planqc, a German quantum computing developer that works on batteries for EVs, raised a €50m Series A led by the European Family Office CATRON Holding and the DeepTech & Climate Fonds. axios.link/4cSzvVZ

• Polystyvert, Canadian plastic recycling technology developer, raised $16m led by Infinity Recycling, joined by Swen Blue Ocean and insider Earth Foundry. axios.link/3XPoW1P

• Phaidra, a Seattle control system developer for more efficient data centers, raised $12m led by Index Ventures. axios.link/3zwe6DV

• Evos, an Australian EV charging company, raised $4m. axios.link/3RYYSh2

• Unum, a UK manufacturer of lighter business class seats to reduce aircraft fuel consumption, raised £3.5m from ACF Investors. axios.link/3zxmrXZ

• Orus Energy, a French developer of demand-response software for commercial buildings, raised €2.2m in pre-seed funding led by B2venture, Asterion Ventures and Ring Capital joined by angels Pierre Trémolières and Myriam Maestroni. axios.link/3xQgtAY

• Roboat, an MIT spinout developing autonomous boats in Amsterdam, raised €550k from Lumo Labs and Shift Invest. axios.link/3XWYzHc

• Indian EV maker River raised an undisclosed Series B from Mitsui and Marubeni Ventures. axios.link/3VYbK82

• Bayou Best Foods, a plant-based seafood maker using IP from shuttered alt-shrimp developer New Wave Foods, announced an undisclosed investment from Big Idea Ventures. axios.link/464MD8w

• XGS Energy, a geothermal startup based in Palo Alto, Calif., says it plans to acquire geothermal drilling company Capuano Engineering Company, based in Santa Rosa, Calif. https://axios.link/3LjYPZr

• ​​OroraTech, a German thermal intelligence provider for wildfires, received a €20m investment from Greece's Ministry of Digital Governance to develop satellite-based warning systems. axios.link/4cSqOv6

• Erc System, a German eVTOL developer, emerged from stealth with an aircraft designed to transport medical patients.axios.link/3zK199i

• The UK's new Labour Party government ended a ban on onshore wind farms, per The Guardian. axios.link/4cPeeN0

• Golden Peanut, an Alpharetta, Ga., subsidiary of ag giant ADM, is working with J.M. Smucker and the National Black Growers Council to expand regenerative ag practices across 20,000 peanut acres in the southeastern U.S. axios.link/3ztITB0

• Tyson Foods is scaling back sales of antibiotic-free beef, as "antibiotic-free" claims and labels have faced increased scrutiny. axios.link/45V5tyE

Hot deals

• Knudt Flor, formerly president and CEO of BMW manufacturing corporation, was named CEO for U.S. and Europe and global head of quality at AESC. axios.link/3xLruDB

• Anish Patel joined Permira as partner and co-head of climate. Patel was previously a partner at Kerogen Capital. axios.link/3XWQl1Q

• Sanjeev Pushkarna joined Waaree Energies Limited as chief procurement officer. axios.link/3Y0UBO1

• Hugo Verkuil is stepping down as CEO of The Vegetarian Butcher, a Dutch plant-based meat producer. axios.link/4bAaApj

It's personnel

NASCAR last week unveiled an electric prototype developed with Chevrolet, Ford, Toyota and engineering giant ABB. 

By the numbers: The $1.5 million SUV has three motors: one in front, two in the rear, powered by a 78 KWh battery producing over 1,300 hp.

Between the lines: NASCAR has committed to 100% renewable electricity by 2028. But it's not ditching its conventional internal combustion race cars anytime soon.

Our Axios Chicago colleague Carrie Shepherd saw the car in person. 

Bonus: Whirrrr

A GIF shows NASCAR's new electric vehicle prototype SUV taking off down a race track from a standing start.

NASCAR's electric prototype zooms down the track from a standing start. Gif: @NASCARonNBC

🚛 Katie gets to check out some electric trailer trucks today!

🪲 Gnarly humidity in Rhode Island has brought out the earwigs — in Terry and Alan's house, and all across the neighborhood. It has them seriously considering letting the chickens inside for natural pest control. 

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 climate tech investors.

July 09, 2024

1 big thing: Upstage, downstage