🤔 Making good investments in climate tech is like acupuncture... You just need a few, strategically placed investments to solve a major climate problem, just like a few well-placed needles can cure major sources of pain.
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THE TL;DR 💨
- We need to get to a net-zero economy quickly
- Renewables won’t get us there in a meaningful time frame
- Advanced nuclear is seldom talked about but a great solution to climate change
- Pitching a prospective corporate partner is very different from pitching a venture capital firm
- Startups preparing to pitch partnerships to corporates should follow four steps: Do research; Outline a specific vision for partnership; Invite feedback; Practice detachment
- Climate Robotics is building a mobile in-field pyrolysis system which returns the product to the field directly, reducing transportation costs and emissions associated with transporting waste biomass
- The end product can be optimized to meet specific needs, such as pH requirements. Climate Robotics’ biochar is a cost effective alternative to using lime to control pH
- The durability of Climate Robotics’ biochar is in the thousands to tens of thousands of years, unlocking carbon removal partnerships.
- WIND Ventures offers global startups ‘unfair access’ to the Latin American growth markets
- WIND Ventures leverages COPEC’s vast knowledge, expertise and resources to accelerate growth, primarily within Latin America, for startups and scaleups across the world in the new mobility, energy and convenience sectors
🌎 THE BIG PICTURE
Nuclear Energy's Role In Biden's Carbon-Neutral Economy
By John Docter • is an Engineering Analyst Fellow for a national laboratory. He's keen on saving the world through science and education.
The United States needs electricity. A lot of it.
In 2020 alone, the United States consumed roughly 3,843 terawatt-hours worth of electricity, half of China’s output but about triple what India uses and several orders of magnitude higher than any other country.
So, how was that electricity generated?
- 40% came from natural gas
- 20% came from carbon-free renewables (solar, wind, and hydropower)
- 20% came from nuclear
- 19% came from coal
- 1% came from petroleum.
This distribution is subject to change.
On January 27th, 2021, President Biden signed an executive order setting a nationwide goal for carbon-free power generation by 2035 and a carbon-neutral economy by 2050.
- Carbon-free means the U.S.’s energy sector won’t emit carbon pollution.
- Carbon neutral means the U.S. will take out of the atmosphere as much carbon as it emits.
That leaves the United States with a big question; in 13 years, how will the U.S. produce 60% of the nation’s electricity carbon-free?
Renewable Energy: A Good Start
Wind and solar are valuable technologies, but the reality of the situation is that they don’t have the necessary capacity to fulfill the country’s energy demands.
The biggest drawback is that wind and solar provide intermittent electricity, which doesn’t meet many electricity consumers’ needs. For example, powering industrial facilities that operate around the clock (carbon capture plants, wastewater treatment, and hospitals) requires consistent, reliable, robust energy production. This constant electricity generation is currently produced by fossil fuels because no viable alternative exists today.
Additionally, industrial processes like cement, steel, and glass production need high temperatures to operate, which can’t be achieved with electricity and instead require fossil fuels, especially coal.
This isn’t to discourage renewable use, but it is to recognize the reality when thinking about how we’ll reach carbon-free electricity in thirteen years.
This dilemma is why policymakers, start-ups, and environmentalists are looking toward nuclear as a solution.
The Current State of Nuclear
Today, most operating nuclear reactors were built around the 1970s and 80s.
The most common of these are light-water reactors, where controlled fissioning Uranium fuel creates heat and steam to drive a turbine, which produces electricity.
The reactors have their issues, though.
The accidents at Three Mile Island, Fukushima, and Chernobyl involved old reactor designs. In addition to safety concerns, barriers include significant capital expenditure, small return on investment, nuclear waste management, and nuclear material proliferation. This list explains why only one new nuclear power plant has been built in the U.S. since 1996.
These shortcomings create an opportunity to engineer out the risks involved with nuclear energy while maximizing the robust, stable, carbon-free heat and power that it provides.
You can think of advanced reactors as vastly improved nuclear reactors that are still early in development.
How have nuclear reactors been improved?
- Efficient fuel use: Reactors turn a higher percentage of fuel into heat and electricity.
- Reduced waste production: Reactors produce less radioactive waste that has a shorter time decaying to a harmless material.
- Economic viability: New designs will reduce the cost to build and operate a reactor and make it cost-competitive on the market.
- Higher safety: New coolant and safety features eliminate the risk of meltdown.
- Higher non-proliferation standards: New designs reduce the risk of nuclear material being diverted from the plant for nefarious usage.
Advanced Reactor Programs and Companies
The United States Department of Energy has 3 significant programs in advanced reactor development to address these engineering goals.
- High-Temperature Gas-Cooled Reactors: Uses a gas, such as helium, as a coolant instead of water.
- Advanced Reactor Concepts: Uses different cooling methods like lead, molten salt, saltwater, and supercritical water.
- Small Modular Reactors (SMR): Scaled-down nuclear reactors that can be deployed in various scenarios.
As funding has become available, these programs are now seeing technologies mature and be deployed.
NuScale, Kairos Power Westinghouse, Holtec, and Terrapower are all U.S. based companies furthering advanced reactors.
While NuScale is the only company to receive U.S. Nuclear Regulatory Commission approval, the other companies are in various stages of licensing, operation, and commercialization, meaning the technology has been developed, and they are working on implementing it.
The road to decarbonization and a healthy environment requires large-scale solutions that can be implemented within our lifetime. Advanced nuclear power is one of the few technologies that can meet that demand.
I am optimistic about the next generation of nuclear power, and you should be too!
To meet the Biden Administration’s executive order for a carbon-free energy system and a carbon-neutral economy, advanced nuclear power will likely be the backbone of our energy production, powering those parts of the grid and industry that require a consistent, high-level heat and energy supply.
Renewables will then supplement advanced reactors and provide energy for smaller, more variable applications, like homes, cars, and small businesses, where current battery technology can cover electricity needs.
📚 EDUCATION // 🧭 NAVIGATING CORPORATE PARTNERSHIPS
How To Pitch A Prospective Corporate Partner
By Katherine Geusz • helps climatetech startups and large corporations work together to get climatetech out into the world, faster.
Pitching a Corporate Requires a Unique Approach
For startups in general and climate tech startups in particular, corporations unlock key commercialization pathways. But pitching a prospective corporate partner is very different from pitching a venture capital firm. A venture capital firm generally has an established thesis and investment criteria and a carefully designed internal governance process. At a corporate, it’s rarely so straightforward.
First, as a rule, corporates closely guard information about their strategies in order to preserve their competitive advantage. This information asymmetry can present challenges for startups trying to understand their own potential relevance. Publicly available information may not present the whole story of how a startup and a corporate might productively work together.
Secondly, the decision-making unit at a corporate can be complex and expansive. Each team at a corporate is one part of a larger whole, with varying incentives and levels of information visibility. These dynamics often fluctuate in real-time, meaning consensus-building at a corporate can be much more art than science.
Specificity without Certainty
In this context, startups pitching to corporates should take an approach that may at first seem counterintuitive. Startups need to do their research to understand the corporate as best they can and outline a specific vision for their potential partnership that both advances the startup’s own objectives and aligns with the corporate’s strategy. But at the same time, the vision the startup presents must leave room for feedback and serendipity. This approach meets the challenges of both information asymmetry and the complex decision-making unit.
Four Steps for Pitching Partnership to Corporates
Startups preparing to pitch partnerships to corporates should follow four steps:
- Do research
- Outline a specific vision for partnership
- Invite feedback
- Practice detachment
Information asymmetry notwithstanding, startups should seek to understand the prospective corporate partner as best they can. Why should this corporate partner, specifically, be excited about working with the startup? Identifying a corporate’s unique “wow” factor can be game-changing.
Startups can start by researching the corporate’s current business. For publicly traded companies, annual reports are a wealth of information about business lines and their relative importance within the corporate’s portfolio. Websites can be a more digestible source of similar information.
Just as important as understanding the corporate’s current business is understanding the corporate’s strategic outlook. This requires a bit more tea leaf reading. Startups can look to what the corporate has communicated on this topic: for example, its published innovation strategy and executive interviews. But startups should also seek out press releases and other coverage of past partnerships to read between the lines. What do the corporate’s actions indicate about its strategies or future ambitions that it might not be explicitly saying?
Outline a Specific Vision for Partnership
Having researched the corporate’s current business and its strategic outlook, the startup can then begin to outline a specific vision for partnership. This vision should advance the startup’s own objectives, and providing a high-level explanation of how it does so can build credibility with the corporate. The vision should also, of course, align to the startup’s understanding of the corporate’s strategic interests.
Specificity means speaking to the long-term value that the startup and the corporate can create together – in other words, what the commitment phase of the relationship might look like. It can also mean suggesting the intermediate milestones that might be needed to reach this outcome. Presenting suggested intermediate milestones is most helpful when the desired partnership outcome is less straightforward and/or the corporate stakeholders have less experience or comfort with startup collaborations.
Providing a specific vision for the corporate to react to is particularly helpful when dealing with a complex decision-making unit. Corporate stakeholders can either build upon the vision or suggest alternatives.
Even the most diligent startups will never be able to know everything about a corporate’s strategy. In this context, the way to cope with information asymmetry is to embrace it. Rather than feigning overconfidence, the startup should demonstrate that it is open to learning more about the corporate’s strategy and gaining the corporate’s feedback on potential partnership pathways.
Requesting feedback can be as simple as stating, “This is our view on how we could work together, but of course, we’re eager to hear your feedback and any other ideas you might have.” Individual stakeholders from different internal corporate groups may provide differing suggestions, all of which can be valuable possibilities to explore.
Leaving the door open for feedback invites the corporate into dialogue with the startup and makes the pitch anti-fragile to information asymmetry. It also demonstrates humility and coachability: two important factors in any long-term relationship.
Pitching to corporates takes work, and because of information asymmetry and complex decision-making units, results may be determined by factors beyond the startup’s control or knowledge. Like many other aspects of a founder’s job, this can feel frustrating.
Startups that are able to practice attachment to effort rather than results will be best equipped to persevere. Rejection may feel personal, but the vast majority of the time, it is not. Startups should seek to control the controllables and be gentle with themselves as they learn over time.
Pursuing relationships with multiple corporates at the same time can help lessen the sting when individual partnerships do not materialize as hoped. And even an unsuccessful corporate pitch can be useful as a market validation or customer discovery exercise, provided that the startup is able to gather feedback from the corporate.
Corporate partnerships can be transformative for climate tech startups. But pitching a partnership to a corporate is very different than pitching to a VC firm. Because of information asymmetry and complex decision-making units, startups need a fresh approach.
Startups can meet this unique challenge by doing research, outlining a specific vision for partnership, inviting feedback, and practicing detachment. These four steps are more art than science, and startups should expect them to become easier over time. Most importantly, rejection should not be equated with failure.
Yes, pitching a partnership to a corporate takes work. At the same time, virtually nothing in the climate tech space is easy. That doesn’t mean it isn’t worth it.
🚀 STARTUP REPORTS
Climate Robotics • A Modular AgTech And Carbon Removal Solution
By Christina Zhou • is a sales operations & enablement professional interested in streamlining our path to a more sustainable future.
Climate Robotics is building a mobile, tractor-mounted system with a biochar product that solves a costly agricultural pain, that fits seamlessly into existing buying processes, and with a verified carbon removal impact. I had the opportunity to speak with Jason Aramburu, the CEO and co-founder of Climate Robotics, to learn about the company’s impact and operations.
The conversation has been edited for clarity.
What is unique about Climate Robotics?
We are the first fully mobile in-field pyrolysis system. A pyrolysis plant typically needs to use a stationary system, which is a centralized plant in or at the edge of a field or forestry operation. They would need to collect the feedstock, transport it to the machine, load it, and move the biochar back out to a farm. Biomass feedstock is bulky and expensive to transport. 50% of the cost of the pyrolysis product is transportation, and most companies aren’t accounting for emissions associated with that transportation.
What we’re building is a tractor-mounted implement. It’s a very modular system that is towed by an agricultural tractor, and it collects biomass refuse, pyrolyzes it, and returns it to the field directly.
Who do you work with?
We work with farmers with 1000 acres and above, focusing on medium farm sizes. In particular, we focus on ranchers, corn farms, and hay farms, where it’s complex to bale up the waste. The only way to make biochar for that application is with a mobile system like ours.
In terms of how our systems get used, our engineering team configures the technology. We have models built for different feedstocks, and it’s comparable to any other piece of heavy agricultural equipment. Our team has a strong background in mobile industrial systems, so we’ve designed it to be fairly low maintenance and easy to swap out parts in the field as needed.
We’re also starting to work more with co-ops. There are about 2,000 in the US, and each one is independent and serves a region. They’re the main conduit between farmers and big ag input companies, and they act as the primary dealers for resources like fertilizers or seeds. Going directly to farmers is advantageous because it allows us to be more high-touch with the farmers and customers, which is really important as we’re optimizing our equipment. To get to scale, we would like to leverage those distribution channels that already exist.
On the carbon side, we aggregate and sell removal credits directly to large tech companies and foundations.
What is challenging about approaching the problem space this way?
Building hardware and building a physical product is hard, especially now with all the lead time and supply chain issues. We’re lucky that here in Houston, there’s a lot of excess capacity in the oil services industry. What we build actually uses a lot of the same materials and components that are used in fracking equipment, for instance, so we do have access to those resources. Another challenge is that this is new territory — we’re building something new, educating people, training the farmers, and so on. I would say though, that what we’re doing has really resonated with farmers and with a lot of the offset buyers.
What’s resonating the most with buyers?
Our technology is highly controllable and allows us to optimize the end product. This means we can produce biochar that has high durability in the soil and high pH. This resonates the most with row crop farmers, who might spend billions of dollars to raise the pH using products like lime, which they can do at a lower price using our product.
To get started, we would start with a proof-of-concept and reach out directly to farmers, and we’re starting to work with co-ops as well. By monetizing the carbon removal credits, we’re able to subsidize the price to the farmers in the initial phases as a demonstration. Over time, they could purchase a subscription, not unlike purchasing lime through their co-ops. This would look like a per-acre fee based on projected improvements in yield and they would own and operate the system that applies the lime to the field — we’ve adopted the exact same business model.
On the carbon removal side, we have a very efficient system and a high-quality end-product. We’re burning the pyrolysis gases to maintain temperature and to make sure those don’t get emitted, and our char has been tested by Texas A&M and has the durability of thousands to tens of thousands of years. This is important to farmers because it means that the pH benefits will last longer, but it’s really important to carbon removal buyers.
How would you categorize the carbon removal landscape and where does Climate Robotics fit in?
The carbon removal side is going to be very big. We’re anticipating a 20% CAGR over the next 20 years, and we do think it will grow.
What’s really accelerated the sector is that there are now two methodologies in North America for biochar credits: Verra, and Climate Action Reserve which just launched theirs. I found those have been really critical for getting big corporate buyers on board. We’ve been using Verra so far since it was released first — we were involved in the process of developing it, and it’s very thorough and robust in its accounting.
Currently, capacity is our biggest challenge, so we are focused on scaling our field units over exploring new market opportunities such as partnering with specific platforms.
Climate Robotics offers an extremely targeted solution for a portion of the biochar market, with a thoughtful go-to-market approach addressing existing agricultural pains and working within existing agricultural purchasing processes while accounting for the impact and cost limitations of more common larger-scale systems. While its sales strategy is focused today, there are plenty of paths for Climate Robotics to grow, from expanding co-op partnerships to expanding its base of carbon removal customers and partners. There’s limited press on its current agricultural customers today, but the company recently signed a carbon removal deal with Microsoft which is helpful social proof as the company seeks to scale.
📚 EDUCATION // 💸 VC DEEP DIVE
The Fund Finding Sustainability Startups For LatAm
By Daniel Kriozere • is a Principal at C3, Tech Scout at For ClimateTech, and Venture Scout at Prithvi - and has an extensive network within the broader climate investment and startup community.
WIND Ventures is the strategic venture capital arm of COPEC, the leading downstream energy player in Latin America (gas stations and convenience stores). WIND Ventures’ purpose is to accelerate global startups and boost their growth in the United States and Latin America. They aim to lead the mobility, energy, and retail sectors’ transformations by opening up COPEC’s knowledge, expertise, and resources to help startups and scaleups around the world. In short, WIND Ventures offers global startups ‘unfair access’ to the Latin American growth markets.
- Stage: Series A+
- Check Size: $2-6M
- Geography: Global, Expansion into Latin America
- Lead/Follow: Lead or Follow
- Revenue/Valuation Thresholds: Revenue generating
About the Fund
Why was the fund created?
WIND Ventures was founded in 2019. COPEC needed to transform and wanted to do it the best way that it could. Prior to WIND Ventures’ launch, COPEC spent a year designing its new growth strategy that aligned with the energy transition trends and felt strongly that an open innovation platform was critical for success. WIND Ventures directly reports to COPEC’s Chief Strategy Officer with CEO and Board support.
What domains in climate tech does WIND Ventures have the greatest expertise in?
WIND Ventures leverages COPEC’s vast knowledge, expertise, and resources to accelerate growth, primarily within Latin America, for startups and scaleups across the world in the new mobility, energy, and convenience sectors. The team includes long-time climate tech venture capitalists but also brings product-market fit expertise for Latin America.
What type of portfolio support does WIND Ventures provide?
WIND Venture’s value beyond capital is the WIND growth platform that opens up COPEC’s vast resources to global entrepreneurs for “unfair” access to Latin America and the United States. Specifically, startups can leverage the WIND Garage, an innovation garage located in Santiago, Chile, and Bogota, Colombia. Additionally, COPEC has over 3,500 gas stations globally – most with convenience stores – and is a ‘most trusted’ brand in Chile and Latin America. Through Copec’s WIND efforts, it now has a leading EV Charging business as well as renewable energy and energy storage businesses that look for global startup partnerships for collaborations.
What is WIND Ventures’ investment process?
When making investment decisions, WIND Ventures thinks about a few different pieces but leans heavily into how it, and its resources, can help the Founders succeed.
To do this well, one key piece is the geography of the startup and running a product-market fit analysis to ensure the value proposition resonates in Latin America.
Beyond the typical venture diligence buckets such as team, the path to profitability, etc., WIND Ventures spends time on the potential collaboration details including evaluating the value to customers, willingness to pay, and the likely adoption rates.
What would make WIND Ventures consider deviating from their typical criteria?
WIND Ventures has a perfected playbook in offering global founders a distinctive and real value proposition – access to Latin America. As such, they can be flexible in their typical investment criteria as long as it does not hinder their playbook.
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Editors: Stephanie Zulman, Swarnav S Pujari Writers: Daniel Kriozere, Christina Zhou, Katherine Geusz, John Docter
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