🔋 ClimateHack Vol 18: Lithium Batteries x Climate

Hey There,

If you want to meet active builders and funders in Food/Climate Tech - come join one of our upcoming meetups in Sofia (October 26th), Stockholm (October 26th), Dubai (October 26th), Cape Town (October 27th), Stanford (October 27th).

As always, free to attend. 

What’s in today's edition? 

💸 The biggest problem climate tech founders face? Cash. 🏭 Lowercarbon Capitals $250m fund for fusion companies.🔋 Why lithium batteries deserve more founder/funder attention.

Digest x Climate

💡 Good read: Endeavour Insight and HSBC’s research into the challenges climate tech founders face as they scale, plus the opportunities for investors to help them succeed, is a really good read.

📈 What’s up? Research from Northern Arizona University and the Permafrost Carbon Network shows that permafrost in the rapidly-melting Arctic will likely release as much carbon dioxide and methane into the atmosphere as a large industrial nation by the end of this century.

💰 The carbon capture market is set to grow to $4.9 billion in 2027, more than doubling its current valuation, according to data from Potter Clarkson.

📉 What’s down? Analysis from the University of California has found that 2020’s wildfire greenhouse gas emissions negated nearly twenty years of the state’s greenhouse gas reduction efforts.

📺 Interesting: BBC Creative changed the credits on iconic British tv show Eastenders this week, to highlight climate change issues and remind viewers to “take care of our planet before it’s too late”.

Carbon x Climate 

🚜 Lithos, based in Seattle, secured $6.23 million seed funding to provide farmers with basalt, which they spread across their fields to improve crop yields and capture carbon.

📊 Berlin-based Climatiq raised €6 million seed funding to develop and expand its carbon intelligence platform, that aims to power the adoption of net zero carbon solutions through open scientific data.

💰 New nonprofit Terraset is launching to help channel private philanthropy into carbon dioxide removal services, to bring down their cost and help the world to reach net-zero by 2050.

Food x Climate

🍻 Ekonoke, based in Spain, raised €4.2 million in a round led by Cosecha de Galicia. The startup has developed a unique method to hydroponically grow hops indoors, using only renewable energy, that it says “brings climate resilience and sustainability to a crop that is threatened by global warming”.

🌾 US-based Nitricity raised $20 million Series A funding for its climate-friendly, on-farm, nitrogen fertiliser production technology. It essentially makes its own lightning to produce fixed nitrogen in a solution with water, that it then injects into the farm’s existing irrigation system. 

🧪 Precision fermentation contract manufacturer Liberation Labs Holdings Inc secured $20 million seed funding to support its global network of manufacturing facilities that produce alternative proteins at scale, designed to address shortages in production capacity and replace existing costly infrastructure, mostly located in Europe.

🏭 Synonym secured $6.3 million in a pre-seed funding round led by Andreessen Horowitz. The startup is working to develop an “essential infrastructure” for the biomanufacturing industry, including a “fermentation farm” that it says can produce large quantities of microbial fermentation products.

📈 Israeli startup Grace Breeding says its Nitrogen Fixation Technology can improve grain yields by 18% and biomass by 16%, reducing the need for synthetic, environment-damaging fertilisers.

🐄 Scientists and environmental advocates have uncovered “cattle laundering” in the Amazon, in which ranchers move cattle from “dirty” ranches, which contribute to deforestation, to ranches that are “clean,” with no recent forest loss, in a bid to disguise their deforestation impact.

💦 ‘Carbon neutral’ claims could land major F&B brands in trouble, even when certified by a third party. Danone Waters America is on the receiving end of a lawsuit arguing that Evian bottled water “is not ‘carbon neutral’ based on how a reasonable consumer would understand the term”.

Materials x Climate

🍄 Mycoworks, which uses mycelium to create sustainable, cruelty-free leather alternatives, secured an undisclosed investment from General Motors’ venture capital arm to “potentially use the leather alternatives in future automotive design”.

🔎 Source Green, a new SaaS platfrom to help brands quit plastic recently launched and allows companies to calculate the impact of their current packaging footprint and source sustainable alternatives, all in one place. 

Transport x Climate

🛩 LanzaJet secured $50 million from Bill Gates-led fund Breakthrough Energy to build a first-of-its kind green jet fuel plant and sell sustainable aviation fuel at the same prices as its oil-based competitors.

🚊 CitySwift raised €5 million Series A funding for its data and artificial intelligence system for public transport, designed to “prepare its partners for a greener, cleaner future of mobility, by matching supply and demand across their networks now.”

⚡️ British electric scooter company Pure Electric smashed its £1 million crowdfunding target thanks to a private raise, having recently secured a sales deal with UK retailer Currys.

🔋 BMW is set to invest $1.7 billion to build at least six EV models in the US by the end of the decade, including a $1 billion factory in South Carolina.

Energy x Climate

☀️ Solar-as-a-service provider ecoligo GmbH, based in Germany, raised €10 million Series A funding to expand its digital platform that supports commercial and industrial solar projects in emerging countries via crowdfunding.

🔌 German startup Solarize Energy Solutions secured €4.3 million in a seed funding round led by Point Nine. It will use the funds to expand its microgrid operating system, designed to decentralise the energy sector and make onsite power generation “the new normal”.

🔋 cylib, based in Germany, raised €3.6 million seed funding to “revolutionise” how lithium-ion batteries are recycled in Europe, making it a more sustainable and efficient process and reusing emitted CO2.

📊 Tallinn-based Gridio raised €1 million, in a round featuring Nordic Link Capital, The Sharing Group, and Estonian Specialist VC, for its smart energy app for charging electric cars and scheduling residential electricity use based on electricity prices.

💰 New Jersey-based Dastur International, Inc has secured the US Department of Energy-funded FEED study project for the design and engineering of an industrial-scale carbon capture plant, enabling the production of clean hydrogen.

🤝 US climate tech companies CarbonCapture and Frontier Carbon Solutions are joining forces to build the world’s largest carbon capture and storage plant, expected to be operational by late 2023.

🌊 The US Department of Energy is providing $35 million in funding “to advance tidal and river current energy systems”, in a move it says represents the “largest investment in tidal and river current energy technologies in the United States.”

Funds x Climate

🏭 US-based Lowercarbon Capital announced they raised a $250m fund earlier this year to advance the most promising fusion companies. The firms claims to already be the world’s most active investor in the fusion sector with a strong developed thesis.

💰 Family-backed, “evergreen”, growth fund investor Verlinvest is set to launch a new $100 million fund, V3 Ventures, to support pre-seed to Series A startups working across e-commerce, health and beauty, and food and beverage.

🌊 Ocean-focused climate tech investor Propellor raised $100 million for its first seed fund to back what it calls “tomorrow’s narwhals”, or companies working in areas like ocean carbon removal, offshore wind, and shipping decarbonisation.

🌍 Climate tech VC firm Satgana, based in Luxembourg, announced the first close of its €30 million fund, that will place pre-seed and seed-level investments in 40 European and African startups working in agrifoodtech, energy, mobility, industry and buildings, carbon removal, and the circular economy.

⚡️ Swedish climate investment fund Baseload Capital raised $24 million, in a round featuring Gullspång Invest, Chevron Technology Ventures and Breakthrough Energy Ventures, to finance, plan and build facilities for extracting geothermal energy. 

⏰ Bill Gates’ Breakthrough Energy announced it will raise a new, later-stage fund, and is expanding its mission to include investment opportunities in ‘adaptation’ to climate change.

Conversations x Climate: Lithium batteries 🔋

This week I reached out to Dr. Isabella Fandrych, Co-Founder of Nucleus Capital investing in Pre-Seed and Seed companies within the climate tech space.

Prior to founding Nucleus, Isabella worked for McKinsey & Company for four years where she helped corporations move towards digital business models and embark on decarbonization transformations, especially in the manufacturing space.

Global challenges threatening our planetary health led her to co-found her own venture capital firm tackling resource inefficiencies in the food and industrial technology space.

What’s the pitch for lithium batteries, and why should we care?

💡 TLDR: 

Growing demand for battery tech and electrification: The clean energy transition is continuing to fuel the exponential increase in battery demand. Mckinsey forecast that the market for battery cells will grow, on average, by more than 20% p.a. until 2030, reaching at least $360 billion globally.

There is also a feasible scenario in which the market accelerates and hits $410 billion by 2030. Although, the battery market historically has been dominated by Chinese players, holding approximately 78% of the global market, with Europe and the US combined holding approx. 18%, more and more European and US players have set out to increase their market relevance.

Especially in Europe, this trend is positively reinforced by following two trends:

• OEMs realizing strategic relevance of battery business: OEMs across the globe are starting to realize that batteries are no longer a commodity, but should rather be considered as strategic assets. Thus, players and regulators are pushing to grow the European market. Established battery cell companies and emerging start-ups have announced combined plans to build production capacity of up to approximately 960 GWh in Europe alone by 2030, growing 20-fold from 2020 and accounting for 33 percent of global, announced battery cell production capacity of around 2,900 GWh in 2030.

• Regulatory push in Europe: Demand for electrification is further enforced through regulatory push as governments are pledging to commit to a number of carbon neutral and [net-zero objectives]. Several countries have announced end dates for internal combustion engine vehicle sales, with the earliest taking effect in Norway in 2025. Based on the regulations to date, internal combustion engine vehicle phaseout targets will affect almost 50 percent of global car sales by 2030.

What those stats mean:

🌳 Challenges with sustainability in the battery market: As demand for batteries increases, so do calls for higher transparency on sustainability practices: sustainability from mine to wheel is becoming increasingly important. This can include the use of renewable energy, new technologies, responsible water consumption, GHG emissions, and ethical working conditions, among other considerations.

For example, depending on the batteries can account for up to 60 percent of all Scope 3 emissions in a mass-market EV. OEMs that have pledged their Science Based Targets for GHG emissions need to come up with solutions to reduce their emissions, while also adhering to further sustainability standards such as sustainable labor laws. At Nucleus Capital we see multiple activity fields leading to business opportunities arising in this space:

🔎 A case for creating supply chain transparency:

• A 2020 United Nations report suggests that raw materials which are indispensable for the production of EV lithium-ion batteries stem from a small number of countries where environmental and labour regulations often are weak. Since OEMs increasingly demand product transparency on sustainability aspects, the pressure on battery suppliers to adhere towards sustainability targets will continuously increase.

• As a result, manufacturers will be forced to generate transparency along the entire supply chain to determine whether raw materials are being extracted and refined with a low carbon-footprint and under sustainable practices to continue supplying OEMs. Examples of emerging companies in this space include: Infyos, Circulor, Flowlity, and Everledger.

🔋 A case for battery recycling: 

• While the growing numbers of electric vehicles currently still present a serious waste-management challenge for recyclers at end-of-life, old batteries may also present an opportunity as manufacturers require access to rare and valuable materials for new battery productions. Overall, the lithium battery recycling market is expected to grow up to USD 19B in 2030.

• In addition to value capture, recycling could also address political costs and downsides of the rising demand for batteries. According to a CSIRO report, 50% of the world’s production of cobalt comes from the Democratic Republic of the Congo and is tied to armed conflict, illegal mining, human rights abuses, and harmful environmental practices.

• Not surprisingly, more and more players such as Li-Cycle, Tozero, Cylib, Li-Industries and Redwood Materials are moving into the lithium battery recycling space, ranging from pre-treatment measures to full end-to-end recycling from batteries to basic materials. Further players are assessing trading platforms and market places, such as Cling Systems.

♻️ A case for second life solutions and life extension: 

• Since EV batteries are typically replaced after losing around 20 percent of their capacity, second-life solutions are a feasible way to reduce costs and cut greenhouse gas emissions in half by using the remaining 80 percent for stationary storage applications. The global market for second-life battery supply is estimated at $30 billion.

• More and more players such as ReJoule are moving into the market to extend battery life time by optimizing usage. Others are looking into opportunities of refurbishing and repurposing old batteries such as Smartville Energy and RePurpose.

If you are working on similar topics in the Pre-Seed and Seed space, please feel free to reach out at [email protected].

Something Fun: 

Pro Tip: Just add "AI" and "Deep Learning" somewhere to your pitch deck and you'll be fine

Thanks for reading - if you enjoyed this edition, please feel free to forward it to a friend, founder or investor interested in climate tech.

How did you like today's email?Love it 😁 Meh 😐 Hate it 🙁

Curated by Nicola & Arman