At this time last year, I was preparing for a low-key New Year’s Eve, feeling apprehensive yet optimistic about the prospects for climate tech in 2021. Since then, I have been disheartened by the firm grip the COVID-19 pandemic seems to have on everyday life. But I've been lifted by the surge of support for technologies intended to address and mitigate humankind’s climate-messing impact on the planet.Several smaller rounds were disclosed as 2021 waned, including a $10 million infusion for supply chain emissions reporting software company SupplyShift; the same amount for carbon removal startup Sustaera (also one of Stripe’s latest investments) led by Breakthrough Energy Ventures; $30 million for "vertically integrated carbon capture and sequestration super developer" Carbon America, which is helping building pilots; and $170 million in funding for UBQ Materials, developing a plastics substitute made from household waste.
As you can appreciate, there’s clearly no shortage of money and no shortage of places where that moolah could be invested. PwC estimates more than 6,000 investors are targeting the space — aside from high-profile specialists including the likes of Lowercarbon Capital or Breakthrough Energy Ventures, many mainstream private equity firms and asset managers including TPG and BlackRock are positioning themselves to participate
The activity in climate tech has been breathtaking over the past 12 months. If 2020 was a breakthrough year for climate tech, then 2021 was breakthrough 2.0. telling data point. While transportation and mobility is the climate tech category that has cumulatively received the most funding — accounting for north of $58 billion from 2013 through the first half of 2021 — just $113.5 million of that amount was focused on 15 startups related to shipping. Mind you, that money doesn’t account for the massive R&D engines of industry leaders such as Maersk or Mitsubishi, but it’s a gap.
The work of corporate funders, notably Amazon, Microsoft, Shopify and Stripe, has been particularly helpful in building credibility for still-unproven companies across several categories. Sustaera’s carbon removal contract with Stripe, for example, was revealed the day before its $10 million Series A round came to light. chatted with him earlier this month, I found myself wanting to know more about virtually every startup in his company’s portfolio. (I highly encourage you to take a closer look.)
Take Cruz Foam, an early-stage circular economic startup making a Styrofoam packaging alternative out of aquaculture waste such as shrimp shells that breaks down in 60 days and can be produced more cheaply — up to 30 percent less expensively. Plus, it gets rid of a source of food waste. That proposition caught the attention of Whirlpool, an early customer, Chi said.
At One Ventures is also a backer of Alchemie, which is working on waterless dyeing technology — addressing one of the apparel industry’s biggest pain points at an operational expense that is two times lower than traditional methods; and Dendra Systems, a drone company that can dramatically speed up forest restoration projects (planting 120 seeds per minute) at an
As PwC notes in its year-end report on the state of climate tech, startups focused on this category accounted for 14 cents of every venture capital dollar committed as of the first half of 2021, and that trend looks to be continuing. Deal sizes for climate tech quadrupled in the 12 months ended June 30, to an average of $96 million. Seventy-eight climate tech startups are worth more than $1 billion (a.k.a unicorns), 43 of which are from the transportation and mobility technology categories.
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