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BFD Expert Voices - Climate Deals

BFD Expert Voices

What we're watching: Trump's VP pick J.D. Vance is expected to speak at the Republican National Convention today. Read more on Vance's energy record.

Milo Werner, a former general partner at Engine Ventures, last month joined deep-tech investor DCVC as general partner, the firms tell Axios exclusively.

Why it matters: Werner joined DCVC's first dedicated climate fund, expected to close next quarter with between $300 million and $400 million.

The big picture: Werner spent eight years as a Tesla engineer and developed a focus in scaling manufacturing.

In 2022 she joined early-stage venture capital firm Engine Ventures, an MIT spinout placing early bets on some of the most ambitious tech in climate, health and advanced systems.

She moved to DCVC this summer to focus on startups as they expand from small demonstrations to larger production.

The latest: Werner is helping drive DCVC Climate alongside firm partner Rachel Slaybaugh.

The firm's first fund focused solely on climate startups initially targeted $500 million when it began fundraising in 2022, per an SEC filing.

Axios exclusively reported in December that the firm was anticipating a close somewhere north of $300 million.

Zoom in: The fund will back eight to 12 companies, writing first checks of $10 million to $20 million for chiefly Series B investments, Werner says.

The fund has backed carbon-to-fuels maker Twelve, geothermal energy developer Fervo Energy, and three unannounced startups.

Separately, DCVC's fourth bio-focused fund is approaching a Q3 close, making Series A investments in AI life sciences startups.

Milo Werner's DCVC move

a photo illustration of Milo Werner of DCVC surrounded by colorful shapes

Photo illustration: Tiffany Herring/Axios; Photo: Courtesy of DCVC

Clean energy data center company Cloverleaf Infrastructure says it has commitments for $300 million from two private equity firms.

Why it's the BFD: The world's biggest tech companies are in a land grab over projects that can provide clean energy for new data centers to support AI.

Zoom in: Sandbrook Capital and NGP Energy Capital have committed $150 million each to the firm.

The funds will be used to buy land and develop energy infrastructure for the projects.

Houston-based Cloverleaf also said that Nur Bernhardt, formerly director of energy strategy at Microsoft, has joined the firm.

Catch up quick: Cloverleaf was co-founded by Brian Janous, the former vice president of energy at Microsoft, who's acting as chief commercial officer.

In an interview last month, Janous described the new company as a developer of powered land sites.

"We're working on behalf of anyone that wants to build a very large energy-intensive application, whether that's a data center or a factory or chip fab," Janous said.

The company also works with utilities to provide clean energy for projects, whether that's tapping into grid-enhancing technologies to find more capacity or finding new ways to add energy resources on site.

The big picture: Big tech companies like Microsoft and Google are adding new data centers at a rapid clip as they invest in AI.

The tech firms would prefer to power those new data centers with clean energy to help them meet their aggressive net zero goals.

But with long lines to connect clean energy projects to the grid, and utilities reaching capacity in certain regions, the companies will need to get creative.

Brian Janous' big raise

Illustration of a solar panel rolled up like a blueprint.

Environmental Transit Authority is raising $3 million to bring back the Elf, a quirky pedal-electric bicycle pod.

Why it matters: The Elf's revival marks the return of an early micromobility player.

Driving the news: Environmental Transit Authority (ETA) is "pretty far down the path" toward completing the seed round, CEO Rob Cotter tells Axios.

The Raleigh, N.C.-based company is planning a subsequent $10 million round to fund a production ramp-up.

How it works: The Elf is a recumbent e-bike enclosed in Trylon polymer, with a windshield in front, head and tail lights, solar panels on the roof, and room for two riders plus groceries.

The 160-pound vehicle can reach 20 or 28 mph, depending on the model, meaning it complies with U.S. e-bike regulations.

Flashback: The Elf debuted in 2013 as the first solar-powered pedal-electric bicycle.

Cotter's company at the time, Organic Transit, built about 850 of the vehicles, generating about $8 million in revenue, he says.

The company raised $2.5 million in equity and another $500,000 in debt before it was acquired by oil and gas firm PetroSun in 2020.

The intrigue: "They ended up doing nothing of significance for four years," Cotter says. He bought back Organic Transit last year, through parent company ETA.

The latest: ETA anticipates selling about 1,000 of its updated Elf models. Cotter says.

Vehicles will have an anticipated price tag of $7,500, with smaller models starting at $1,500 and larger models at $12,000.

Go deeper: Electric Bike Review covered the Elf in January.

🫛 ETA's e-pod

Workers in a garage assemble red and green Elf bicycle pods

Workers in a garage assemble Elf bicycle pods. Photo: Courtesy of Environmental Transit Authority

🌿 ESG lives: Despite all the loud political rhetoric, ESG is still a thing in the dealmaking world, writes Axios Markets' Emily Peck.

All 500 global business leaders surveyed by Deloitte this year said that they look at how their ESG profile would be affected by a potential acquisition or divestiture.

57% said they have defined metrics for evaluating ESG.

Across a range of industries, leaders told Deloitte that they had walked away from an acquisition because of an ESG concern, including 80% in private equity, 70% in financial services, and 72% in consumer goods.

⚛️ Fusion is hot: Fusion companies are seeing significant growth, despite steep technical hurdles, and more money than ever is flowing into this area, reports Axios Generate's Andrew Freedman.

The Fusion Industry Association says more than $900 million was directed toward fusion technologies in the past year, with a total of $7.1 billion since 1992.

Total government funding has risen to more than $420 million in the past 12 months, which signals a growing role for public-private partnerships.

🌊 Broken blade: The remnants of a broken offshore wind turbine blade have been washing up on Nantucket beaches, reports the New York Times.

The blade, made by GE Vernova, came from Vineyard Wind, which is 14 miles off the coast of Martha's Vineyard.

It's been a tricky year for America's fledgling offshore wind sector.

Temperature check

a box of matches that pictures a small outline of the earth and text that reads "Temperature Check"

• Peak Energy, a sodium ion battery maker based in Denver, Colorado, has raised a $55M Series A led by Temasek's Xora Innovation and including Eclipse, TDK Ventures Lachy Groom, Tishman Speyer, TechEnergy Ventures, Doral Energy-Tech Ventures and DETV-Scania Invest. Go deeper

• GrowUp, a London-based vertical farm company, has raised £38m from Generate Capital. Go deeper

• Infinitum, an Austin, Texas-based developer of a sustainable motor, has raised $35m in an extension of a Series E from Marunouchi Innovation Partners and Rice Investment Group. Go deeper

• NovoNutrients, a Sunnyvale, Calif.-based biotech company using CO2 emissions, raised $18m in Series A funding co-led by Woodside Energy and CM Venture Capital. Go deeper

• ACEL Power, an electric marine company based in Vancouver, has raised $10m in a Series A round led by Tau Capital. Go deeper

• ReliON, a Montréal and Ottawa-based EV infrastructure monitoring company, has raised $3m CAD led by Diagram Ventures and including MaRS Investment Accelerator Fund (IAF), AQC Capital, Anges Québec and Cycle Momentum. Go deeper

• Ohmium, a Newark, Calif., green hydrogen electrolyzer producer, received an undisclosed investment from chemicals giant 3M. Go deeper

• Intersect Power, a clean energy developer based in Beaverton, Ore., has raised $837m in debt and equity tied to tax credits from Morgan Stanley, Deutsche Bank and HPS Investment Partners to build battery projects in Texas. Go deeper

• International Battery Metals started commercial production of its modular direct lithium extraction plant at a U.S. Magnesium site in Utah.

Hot deals

• Mike Milburn has joined the board of directors of EV charging company EVPassport. Milburn was formerly the chief customer officer at Salesforce. Go deeper

• Katie Jackson will lead the copper business of mining giant Rio Tinto. Jackson was previously the president of National Grid Ventures. Go deeper

• Brian Dee was named CFO of Swift Current Energy. Dee was previously CFO of Atlantic Power & Utilities. Go deeper

• Greta Hager and Kai Talarek joined Fortitude Re as CFO and chief growth and optimization officer, respectively. Go deeper

It's personnel

🤧 Katie can't seem to shake a cold. She's on week two. Send immunity-boosting tips!

👋🏻 Alan is heading north for a few days. He'll be back in your inbox on Monday.

Thank you to George Moriarty and Chris Speckhard for today's edits.

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

July 17, 2024

1 big thing: Milo Werner's DCVC move