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🍹 Sip of the week: A Wet Woody from Gar Woods Grill and Pier on Lake Tahoe.

Investors continue to back companies that are able to use data and AI models to accurately assess the risks of climate change on companies, assets and infrastructure.

Why it matters: The climate data sector is already crowded, and VC funding tight, but companies with specialized products and growing customer lists are finding financing.

Driving the news: First Street, which provides companies and individuals with data on their exposure to flooding, wildfires and other climate risks, raised $21 million in a Series A-1 funding round, the company exclusively tells Axios Generate's Andrew Freedman.

Formerly a nonprofit, the research organization spun off a public benefit corporation in February and has since taken in $46 million in total funding in the Series A from partners including Galvanize Climate Solutions and Congruent Ventures.

The latest investment is led by Innovation Endeavors and is aimed at building up First Street's new software solutions for companies to better understand how their assets will fare in a warming world.

Other investors in the latest tranche of funding are SE Ventures, backed by Schneider Electric, and Nuveen Real Estate.

State of play: First Street is just the latest to attract investors trying to fund climate risk.

German startup LiveEO last month announced a €25 million Series B round for its software that can assess companies' deforestation and climate infrastructure risks. Investors include NordicNinja, the German state fund DeepTech and Climate Fonds (DTCF) and Andy Bechtolsheim, co-founder of Sun Microsystems.

Also last month British startup Climate X announced a Series A round of $18 million led by Google Ventures for its software that helps companies like banks and real estate owners assess climate risks.

Earlier this month Scaler, based in Amsterdam and New York, closed a $10 million Series A round to continue to develop its software that manages ESG data for real estate investors and asset managers.

Yes, but: There's already a maturing climate risk industry filled with companies, nonprofits and agencies providing data and predictions.

Earlier this month, climate intelligence company Cervest shut down, citing an inability to close its next funding. It had raised a $30 million Series A round in 2021 from investors including Lowercarbon Capital and Marc Benioff's TIME Ventures.

💭 My thought bubble: Expect consolidation and more shakeout in the climate data sector as venture funding remains chilled.

The big picture: Investors are still willing to back climate data software, but they're getting more selective, taking longer to do due diligence and requiring stronger financials.

Software and AI will remain bright spots for climate tech investing, as investors naturally shy away from capital-intensive plays during chilly times.

Regulation in Europe and the U.S. will continue to drive companies' need for more climate data.

Climate risk data still hot

an illustration of a leaf and binary code surrounded by various shapes

Addionics, a London-based battery technology developer, raised a $39 million Series B to ramp up production.

Why it's the BFD: It's a sizable raise when investors are leery of cooling EV demand.

How it works: Addionics makes a battery component called a 3D current collector.

The company's porous design dissipates more heat than conventional collectors, it says, in turn boosting battery charge time, power, and stability.

Driving the news: GM Ventures and Deep Insight led the all-equity round, joined by Swedish truck and engine manufacturer Scania.

Flashback: Addionics in 2022 raised a $27 million Series A led by Deep Insight, and previously raised $9 million led by Next Gear Ventures.

What's next: The latest raise is aimed at funding a planned $400 million U.S. factory, which would make EV battery anodes starting in 2027.

💭 My thought bubble: In this market chill, that's a lot of money for an EV battery factory.

$39M battery factory funding

Illustration of three batteries increasing in size overlaid with money and surrounded by abstract shapes.

Matereal, a startup that's developed an alternative plastic to polyurethane, raised a $4.5 million seed round, the startup tells Axios.

Why it matters: Polyurethane is one of the most widely used plastics, but making it is a considerable source of emissions.

The big picture: Matereal is introducing its material, Polaris, as a textile coating to waterproof clothes and bags.

Zoom in: Making Polaris emits a fraction of the pollution associated with making traditional polyurethane, Matereal says.

The material can be made from a variety of bio- and renewable feedstocks, such as linseed oil.

It was developed at the U.S. National Renewable Energy Laboratory, with funding from the Department of Energy.

Driving the news: Collaborative Fund led Matereal's all-equity round, which closed in June.

Better Ventures, Alante Capital, One Small Planet, Climate Capital, Sandy Spring Climate Partners, Pachamama Ventures and PDS Ventures participated.

What's next: Matereal plans to start sending samples to customers in the fourth quarter.

1 fun thing: "It's been tricky showing off a product that ideally is invisible!" CEO Jacqueline Ros Amable told Axios. She said the photo above is a thermoplastic chip dyed black.

Matereal's seed round

Matereal's new Polaris material, on display at a conference.

Matereal's new Polaris material, on display at a conference. Photo: Courtesy of Matereal

🤖 Tesla's robotaxi Qs: Tesla's lackluster Q2 leaves a lot more questions than answers when it comes to the company's robotaxi plan, reports Joann Muller in Axios What's Next.

CEO Elon Musk envisions turning Tesla's existing customer-owned fleet into a commercial robotaxi network like "Airbnb on wheels," he said.

Asked how long it will take to scale a ride-hailing service, Musk said: "We will have a fleet that's on the order of 7 million vehicles soon. ... This is basically instant scale with a software update."

🌍 Leo's fund looks to Abu Dhabi: Princeville Capital, which includes actor Leonardo DiCaprio as an adviser, plans to open an office in Abu Dhabi and back climate startups in the region, reports Bloomberg.

The firm will work out of Abu Dhabi's startup incubator Hub71.

💸 Inside J.D. Vance's VC stint: The Wall Street Journal takes a deep dive into Trump VP pick J.D. Vance's short-lived career as a VC (five years, across three firms), including indoor farming company AppHarvest, which Vance invested in twice and held a board seat.

👇 Harris' VP contenders on climate: Kamala Harris' VP pick could bolster her climate credentials or moderate her stance to pick up swing voters, reports the New York Times.

Potential picks include Pennsylvania Gov. Josh Shapiro, Kentucky Gov. Andy Beshear, Sen. Mark Kelly of Arizona, and North Carolina Gov. Roy Cooper.

Temperature check

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

• Pajarito Powder, a materials company based in Albuquerque, N.M., has raised $4.5m from catalyst maker Ecovyst. Go deeper

• Lineage, a leading U.S. temperature-controlled warehouse REIT, raised $4.4b by offering 56.9m shares at $78. It plans to list on the Nasdaq as "LINE." Go deeper

• TotalEnergies' Q2 profit fell 6% year over year amid weaker refining margins, and lower gas sales and prices in some regions. Go deeper

• Ford saw a $1.1 billion loss in its EV division, dragging its Q2 profit below analyst forecasts. Go deeper

Hot deals

• Gabe Elsner has joined sustainable aviation fuel company Air Company as its VP of Finance. Elsner was previously chief financial officer for North America Polestar. Go deeper

• Karenann Terrell was appointed to the board of Eaton. Terrell was previously chief digital and technology officer of GSK. Go deeper

• Steffen Pietzke joined EnerVenue as CFO. Pietzke was formerly CFO of Enovix Corporation. Go deeper

• Paul Lundstrom was named CFO at Copeland. Lundstrom was formerly CFO at Flex. Go deeper

• Martin Sukup and Jeff Inhofer have joined EVgo as executive vice president of engineering and vice president of electric vehicle supply equipment engineering, respectively. Sukup and Inhofer were previously Tesla charging team leaders. Go deeper

It's personnel

🐟🐱 Katie's son caught and released two catfish yesterday!

👋🏻 Alan is off today. 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 dudes.

July 25, 2024

1 big thing: Climate risk data still hot