13 February 2022 |

Keep Cool- 02/12/2022

By Nick Van Osdol

DEALS IN FOCUS: ‘DEEP’ CLIMATE TECH

Scanning our ‘Deal heat’ section below not enough for you? Let’s go deeper on three tech deals that stood out to me this week 👇.

♨️ Quaise 

We gained some appreciation for the potential of geothermal when we explored Dandelion Energy’s business a few weeks ago. Their solutions can decarbonize heating and cooling by accessing the geothermal heat and energy that lies just beneath the earth’s surface.

What would happen if you could tap the geothermal energy that’s miles beneath the Earth’s surface? There’s enough geothermal energy at these depths to provide energy for the whole world many times over

Tapping these energy sources is exactly what Quaise aims to do. Specifically, on the heels of a $40M Series A, they aim to prove the viability of their drilling systems that would tap into ‘supercritical’ geothermal energy miles underground. While perhaps not quite as science fiction-y as other verticals like nuclear fusion, this definitely falls into the ‘deep’ climate tech category (and not just because of the drilling pun). If Quaise can translate their technology from the lab stage to large scale, the geothermal energy they harness could help replace coal and gas power.

✈️ Destinus 

We’ve seen a wave of green hydrogen deals over the past weeks, and dug into the ways in which hydrogen could help the global push towards decarbonization in an email two weeks ago. This week alone there were 2 more rounds for green hydrogen producers.

One area we didn’t cover on the hydrogen front? Transport. As if taking offense, Destinus, a company that wants to create a liquid hydrogen powered, hypersonic plane, announced a $29M seed round this week. Sound ambitious? You can throw ‘autonomous’ into the mix too in case ‘hypersonic’ wasn’t enough for you

The airline industry is highly emissions-intensive; if you’re like me, the majority of your individual carbon footprint may well come from airline travel. Major passenger airlines are focused the development of sustainable aviation fuels (“SAF”), which could cut carbon emissions significantly, though not eliminate them.

Liquid-hydrogen as a fuel, however, could be entirely emissions free for flight. As with our assessment of Quaise’s efforts to access supercritical geothermal energy, Destinus’ tech is super frontier; it’ll be expensive, challenging, and potentially dangerous (probably fit for cargo only for a while). The company plans to conduct tests with a larger model this year though – godspeed! 

Destinus 'Hyperplane' model

Destinus

📊 kWh Analytics 

It’s not all about hardware today. On the software side, kWh Analytics strikes me as a particularly interesting business. Leveraging a proprietary data set that tracks renewable energy projects across 300,000 operating assets, the company offers financial products to minimize the risk of investing in and developing renewable energy projects. 

The financing required to expand renewables doesn’t just come down to upfront dollars. Innovative solutions like kWh are critical to making investment calculus to expand renewables attractive for all kinds of market participants.

One of their products, a ‘put’ on solar revenue, is similar to a put options contract: the owner of the put is covered (to an extent) if the underlying asset (in this case revenue from solar operations) underperforms 📉. If you have a portfolio of solar assets or invest in their development, this is a powerful form of credit enhancement that also smooths out your P&L (shout out to kWh for taking me back to my days of feverishly studying for the CFA  with that one 🤙).

DEAL HEAT 🔥

Here are financing rounds and new funds that caught our eyes this week 🙇. 

📊 Watershed raised $70M in Series B funding to help companies track their carbon emissions. Kleiner Perkins and Sequoia co-led the round. Read more here(U.S. / Software)

♨️ Quaise raised $40M in Series A funding to harness geothermal energy very deep underground. Their drilling systems aim to be capable of reaching depths between 10-20 km. At these depths, geothermal energy is power-dense, virtually unlimited, and available anywhere on the planet! Safar Partners led the round. Read more here(U.S. / Hardware)

🚌 Altigreen raised $40M in Series A funding for its commercial EV business. Altigreen’s three-wheeled EVs are specifically optimized to handle India’s roads and infrastructure and carry cargo. Sixth Sense Ventures led the round. Read more here(India / Hardware)

✈️ Destinus raised $29M to develop liquid hydrogen powered, hypersonic aircraft for cargo. Read more here(Switzerland / Hardware)

⚡ Utilidata raised $26.75M in Series D funding for their software platform that leverages machine learning to enhance grid resiliency, integrate distributed energy resources (DERs) and help decarbonize the grid. Moore Strategic Ventures led the round. Read more here(U.S. / Software)

💦 Verdagy raised $25M for its new membrane-based approach to large-scale water electrolysis to produce green hydrogen. TDK Ventures led the round. Read more here(U.S. / Fuels)

🛴 Swing raised $24M in Series B funding for its electric scooter startup. White Star Capital led. Read more here(S. Korea / Hardware)

🔥 Rondo Energy raised $22M in Series A funding for its industrial decarbonization technology business. Their tech includes a battery that stores solar and wind energy at temperatures over 1200°C, which can then be used for the high temperature heat required across a lot of heavy industry. Breakthrough Energy Ventures and Energy Impact Partners co-led the round. Read more here(U.S. / Hardware)

💸 kWh Analytics raised $20M in Series B funding to underwrite insurance policies and other financial products that will help scale renewable energy. The company has a proprietary database of renewable energy project performance across 300,000 operating assets. Lacuna Sustainable Investments led. More here(U.S. / Financing)

👷 Prisma Photonics raised $20M in Series B funding to monitor large-scale infrastructure such as power transmission grids and oil and gas pipelines to optimize efficacy, cost efficiency, safety, and sustainability (e.g. by preventing spills, wildfires, etc…) Insight Partners led the round. Read more here(Israel / Software)

💦 Lhyfe raised $19.5M to finance the deployment of green hydrogen production sites. The company produces green hydrogen for industry and the transportation sector in France. Andera Partners led the round. Read more here(France / Fuels)

💪 Modumetal raised $14M in Series A-2 funding to make industrial products more corrosion resistant, allowing them to withstand more harsh environments while supporting new industrial capabilities. Atlas Innovate and Rotor Capital led the round. Read more here(U.S. / Hardware)

🚁 Odys Aviation raised $12.4M in Seed funding to make hybrid-electric vertical takeoff and landing (“VTOL”) aircraft. More here(U.S.  / Hardware)

🧑‍🌾 eAgronom raised $7.4M in Series A funding for its farm management software business, which also helps introduce farmers to the carbon credit market. The company is also a founding partner in a DAO called Solid World to help farmers and other carbon projects finance CO2 sequestration. Yolo Investments and ZGI Capital led the round. Read more here(Estonia / Software)

☀️ Power Roll raised $7.9M in a private equity round to develop low-cost and lightweight flexible solar film for energy generation and storage. Indigo 7 Ventures (i7v), Kero Development Partners and RAB Capital led the round. Read more here(U.K. / Hardware)

🚤 Navier raised $7.2M in Seed funding to make boats powered by electric motors and battery packs. Global Founders Capital and Treble co-led. Read more here(U.S.  / Hardware) 

🚌 BasiGo raised $4.3M in Seed funding for their e-mobility business. Specifically, BasiGo will start by building and launching a fleet of electric buses in Kenya. Novastar Ventures led the round. Read more here(Kenya / Hardware)

🌱 PlantSwitch raised $3.25M in a seed round to bring better-quality, eco-friendly packaging options to market. The company specifically targets alternatives to single-use plastics such as straws and utensils. Read more here(U.S. / Consumer Goods)

⚡ Digital Power Optimization (DPO) raised $2.5M in Series A to bring cryptocurrency mining as a service (CMaaS) to global power and utility industries. The company sees cryptocurrency mining as a way to help power producers maximize the value of their energy (especially during non-peak grid times). To explore a comparable model, read our deep dive on Crusoe Energy. NYDIG, a bitcoin company, led the round. Read more here(U.S. / Hardware)

💰 Envisioning Partners raised $64M for a new impact fund to invest in startups tackling climate change. Existing portfolio companies are both in the U.S. and Asia. Total AUM rose to $140M with the new funds. Read more here(S. Korea / Financing)

ELSEWHERE IN CLIMATE TECH

🙅 Fighting the wrong fight: The same environmental group that agitated to shut down a nuclear power plant now opposes an underground pipeline that would bring hydropower from Canada to New York. More fossil fuels it is, then! 

☀️ Innovation: More signs of promise on the fusion front (there have been plenty in the past months) – scientists at the Lawrence Livermore National Laboratory were able to create a fusion reaction that was briefly self-sustaining

🌾 Innovation: Can genetically modified crops help reduce carbon emission? One new study says yes.

🤔 Opinion: Matthew Yglesis penned a blog post titled People need to hear the good news about climate change. We wholeheartedly agree. That’s our entire ethos!

👍 Good news: Right on queue, CO2 levels in the UK from new cars are reaching new lows as EVs take off. We’re headed in the right direction.

💰 Capital flows: USDA greenlights $1B to make U.S. agriculture more sustainable. 

⚖️ For the lawyers: Could ecosystems themselves have legal rights? Without wading into the debate, it’s safe to say they shouldn’t have to for us to recognize it’s in our own self interest to protect them. 

💡 Big ideas: What can Europe learn from Stripe? With respect to carbon removal funding, potentially a lot. I enjoyed this piece which, among other things, outlined how Europe could take a ‘portfolio’ approach to supporting carbon removal projects. 

🐦 Twitter Detour: Check out this striking image of an Olympic ski slope set against a backdrop of a snow-free industrial landscape. A lot to unpack in it!