Hey team,

Happy April. What’s up this weekend? I went to a chili cookoff in Pennsylvania yesterday after ceding a lunch reservation to the President. Had to mix it up.

Speaking of mixing it up, today we’ll talk about massive mechanical rotor sails. Among other things. So pick your favorite side of this ship to cast your gaze out over the ocean of climate tech news from the week. Let’s dive in.

In today’s email:

• The Magnus effect and saving fuel and emissions in shipping
• Fundraising announcements across climate tech
• Other climate tech, climate, and energy headlines

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DEALS IN FOCUS

There are many things I don't understand fully about our world. How planes get off the ground. How wireless communication works. Why people bring their phones and AirPods into the sauna.

Here's one more that's relevant to climate tech funding news this week. When a spinning object moves through a fluid (e.g., air or water), it creates a region of high pressure on one side and low pressure on the other. This pressure difference generates a force perpendicular to the direction of motion, deflecting the object's path.

This physical phenomenon is the Magnus effect, observable in the rotation of many spinning objects. If you're a baseball fan (happy opening week!), you've seen the Magnus effect when a baseball's spin can cause it to curve in flight. 

If you're a fan of decarbonizing shipping, you're also in luck. This week, Norsepower, based out of Finland, announced a €28M Series C fundraise for its mechanical rotor sails for large ships, which harness the Magnus effect, too.

Norsepower’s 30-meter mechanical rotor sails (via Maersk and Norsepower)

Making use of the Magnus effect

Norsepower's sails don't look like conventional sails. While other firms are going the old-school route, aiming to equip freighters with inflatable wing sails, Norsepower's big, cylindrical, mechanical rotor sails spin to create a pressure differential & propulsion. When added to ships, the sails can help save fuel. In a deployment with Maersk in 2019, the sails cut fuel use by ~8%. That helps shipping operators save money and reduce emissions.

The concept has been around for a century. The underlying technology, the Flettner Rotor, was invented by an engineer (also Finnish) and used in an Atlantic crossing for the first time in 1926.

Flettner rotors are smooth cylinders that spin. Like other sails, they generate the most thrust when winds are strong. When wind meets a spinning rotor, the air flow accelerates on one side of the sail and decelerates on the other. This change in airflow speed creates the pressure difference and force which the rotor sails translate into forward propulsion. You can watch a handy video from Norsepower here (complete with a majestic, sanguine soundtrack).

Few firms have tried to use the Magnus effect in shipping over the past hundred years. For a while, there was no catalyst; global warming wasn't on folks' minds, and the energy density of heavy fuel oils for maritime shipping makes them ideal for powering ever-bigger container ships.

Further, Fletter rotors alone can't power a ship, especially large commercial-scale freighters with places to be and timetables to stick to. The faster the wind, the better. But absent wind, tech like Norsepower's has little to offer in the way of propulsion for ships. 

And the direction of the wind is also crucial. Ideal conditions for tech like Norsepower's feature wind hitting the hull from the side. Remember, the Magnus effect generates a force perpendicular to the direction of motion; if wind hits a ship head-on or from behind, the thrust generated by Flettner rotors is askew to the ship's desired heading. Finally, the rotors themselves need to be motorized to spin in the first place.

Other firms have tried to commercialize similar concepts to Norsepower's. Enecron built a ship, the E-Ship-1, in 2008 that leverages Flettner rotors and has claimed fuel consumption savings of up to 25%. It's still in operation, currently sailing from Bremen, Germany to Mejillones, Chile. 

Enecron’s EShip 1 (current latitude & longitude = -22.43 / -70.87)

Norsepower, as evidenced by its most recent fundraise, has more ambitious commercialization plans. It also partners with shipbuilders and operators to put its sails on their boats rather than building boats itself. Its sails are used on ships owned by Bore, Sea-Cargo, Scandlines, Vale, Nippon Marine, and Socatra.

The net-net

Succinctly, this is a fuel-saving technology. We love a good fuel-saving technology!

If you had to decarbonize international freight shipping by 10% in 10 years, which path would you choose:

• Commercialize a zero-carbon fuel source and convince shipping operators globally to use it to move 10% of all oversea freight
• Ask shipping owners to invest in mechanical sails that cut fuel use by 10%

Tough one, I know. The easy answer is some combination of both, coupled with software for things like route efficiency. But if I had to choose just one, especially with speed-to-deploy in mind, I'd pick the one that doesn't involve a comprehensive fuel-source overhaul.

And while ~10% fuel savings via mechanical sails might not sound that sexy, and while Norsepower's mechanical sails require an upfront capital investment, they save both fuel and emissions. Saving fuels means you start paying back upfront capital costs immediately. Contrast that to alternative fuel sources, which will almost certainly cost more than oil for maritime shipping for a long time.

The big open questions concerning Norsepower and its sails are, well, the perennial ones.

1. How much appetite is there from the global shipping industry?
2. How serious are shipping giants about cutting emissions now, as that's probably still the primary catalyst for adoption here? Is that a concern they're OK mortgaging five to ten more years?
3. Can Norsepower keep its costs in check, scale manufacturing, and navigate supply chain constraints, which are hammering manufacturing for other renewable energy technologies?

To all of which I say: "Add it to the watch list."

DEAL HEAT

Larger venture funding rounds

🚕 Cabify, based out of Madrid, raised ~$110M in equity funding for its ride-hailing and urban mobility business that aims to reduce miles driven in private cars. The raise will help it electrify its fleets and expand its global presence. Orilla Asset Management and Fond-ICO Next Tech participated. More here. (Spain, Transportation)

🦠 Unibio, based out of London and Roskilde, Denmark, raised $70M from the Saudi Industrial Investment Group for its precision fermentation and sustainable protein business. (U.K., Synthetic Biology)

Medium-sized venture funding rounds

🌱 Agreena, based out of Copenhagen, raised ~$50M in Series B funding for its carbon removal platform that helps farmers monetize carbon sequestration in soils. HV Capital led. More here. (Denmark, Carbon Markets)

⚡ Modern Electron, based out of Bothell, WA, raised $32.8M in funding for its hydrogen heating business and hydrogen-fired generators. Read more here. (U.S., Energy) 

⛵ Norsepower, based out of Helsinki, Finland, raised ~$30.3M in Series C funding to make mechanical rotor sails for large ships that help save on fuel (and emissions). Mirova Environment Acceleration Capital led. Read more in our 'Deals in Focus' section above and here. (Norway, Transportation)

⚡ Type One Energy, based out of Madison, WI, raised $29M in pre-seed funding to build a commercial stellarator fusion reactor. Breakthrough Energy Ventures, TDK Ventures, and Doral Energy Tech Ventures led. More here. (U.S., Energy)

📊 Spiral, based out of New York, raised $28M in Series A funding for its impact-as-a-service platform, which helps companies integrate sustainability, social impact, and other ESG considerations into their businesses and applications. Team8 led. More here. (U.S., Climate Management)

🚁 Ascendance Flight Technologies, based out of Toulouse, France, raised ~$22.7M to accelerate the development of its eVTOL technology.  Bpifrance and Habert Dassault Finance participated. More here. (France, Transportation)

🏠 Effy, based out of Paris, France, raised $22M from Felix Capital to retrofit and renovate buildings for energy efficiency and to install renewable energy systems. The firm was bootstrapped for a decade and a half prior. It now has its sights set on entering new markets. More here. (France, Built Environment)

💼 Gen Phoenix, based out of Peterborough, U.K., raised $18M in Series B funding to make more sustainable alternative-leather products. Material Impact led. Doc Martens participated as well. More here (paywall). (U.K., Industry)

⛏️ Ph7 Technologies, based out of Vancouver, raised $16M in Series A funding to make metal extraction more sustainable. TDK Ventures and Pangaea Ventures led. More here. (U.S., Industry)

💦 Irrigreen, based out of San Francisco, raised $15M in seed funding to improve residential irrigation with inkjet-printing technology. Ulu Ventures led. More here. (U.S., Built Environment)

♨️ Mixergy, based out of Oxfordshire, U.K., raised ~$11.3M in equity funding for its smart water heaters and heat pump business. EDP Ventures, Nesta, Kiko Ventures, and others participated. More here. (U.K., Built Environment)

Smaller venture funding rounds

🌱 Evoco, based out of Toronto, Canada, raised ~$8.8M in Series B funding for its plant-based materials production business. Circular Innovation Fund led. More here. (Canada, Industry)

⛽ Cowboy Clean Fuels, based out of Denver, raised $7.5M in Series A funding to make renewable natural gas and sell carbon credits. Machan Investments led. More here. (U.S., Energy)

🧪 Cauldron Labs, based out of New South Wales, Australia, raised ~$7M in funding for its precision fermentation platform that makes alternative dairy products, meat, and materials. Main Sequence Ventures led. More here. (Australia, Synthetic Biology)

🤝 Ever.green, based out of Seattle, raised $6.1M in seed funding to build a marketplace to match corporations with tax credits and renewable energy contracts to help fund clean energy developers’ new projects. PSL Ventures and Designer Fund co-led. More here. (U.S., Energy)

🛰️ Impact Observatory, based out of San Francisco, raised $5.9M in seed funding to use AI to improve satellite imagery for mapping and monitoring applications. Esri, also a satellite imagery-focused firm, participated. More here. (U.S., Climate Management)

📊 Connect Earth, based out of London, raised ~$5.8M in seed funding for its API that helps financial firms offer customers insights into the climate impact of transactions. Gresham House Ventures led. More here. (U.K., Climate Management)

🪟 3E Nano, based out of Toronto, raised $4M in seed funding to make transparent coatings to insulate windows. Energy Foundry led. More here. (Canada, Built Environment)

🍛 Shicken Foods, based out of London, raised ~$2.5M from Veg Capital to scale up manufacturing of its plant-based Indian cuisine. More here. (U.K., Food & Agriculture) 

🧱 Cardonaide, based out of Joensuu, Finland, raised ~$2M in seed funding to make carbon-negative concrete. Lakan Betoni and Vantaa Energy led. More here. (Finland, Built Environment)

♻️ Recyda, based out of Freiburg, Germany, raised ~$1.9M in funding for its recyclability assessment software platform. Speedinvest, Futury Capital, and Auxxo Female Catalyst Fund, among others, invested. Read more here (in German). (Germany, Industry)

⚡ TGN Energy, based out of Borgheim, Norway, raised an undisclosed amount from AVG Group Sarl for its integrated renewable energy management platform. More here. (Norway, Built Environment)

Private equity and other funding rounds

🔋 Northvolt, based out of Stockholm, is opening up a new financing round to target up to $5B in new capital to build a battery supply chain in Europe. More here (paywall). (Sweden, Energy)

🛒 In acquisitions, Origin Energy, based out of Sydney, Australia, plans to accept a ~$10.2B takeover offer led by Brookfield for its integrated power business in one of the largest energy acquisitions this year. More here (paywall). (Australia, Energy)

🛒 Also in acquisitions, bids for full-service truck stop operator TravelCenters of America are heating up. Store operator Arko made a new $1.4B bid for the firm after BP announced a $1.3B acquisition two weeks ago. There are EV-charging infrastructure scale-up implications galore here. More here. (U.S., Transportation)

⚡ Bestpath, based out of Shanghai, will go public at an implied valuation of $1.2B via SPAC (a merger with Aquaron Acquisition Corp). The firm develops hydrogen fuel cells. More here. (China, Energy) 

🏢 Logical Buildings, based out of New York, secured a $110M project finance facility from Keyframe Capital to help building owners in New York and New Jersey decarbonize and electrify their buildings to save on energy costs and sell energy back to the grid as part of virtual power plants. More here. (U.S., Built Environment)

✈️ United Airlines invested $5M more in Svante, the British Columbia-based carbon capture and utilization firm that also makes sustainable aviation fuel. More here. (Canada, Transportation)

💸  In grant funding, London-based Technology Minerals received ~$2.5 million in funding from Innovate UK to make a mobile battery-recycling system. More here. (U.K., Industry) 

💸 Also in grant funding, The Maryland Energy Administration awarded the Business Network for Offshore Wind $1.25M to kickstart an ‘Offshore Wind Experience Hub’ on Maryland’s Eastern Shore. More here. (U.S., Energy) 

New funds 

💰 Milltrust, based out of London, is launching its new British Innovation Fund II to invest in high-impact, early-stage companies. It plans to focus on science and innovation with links to U.K. universities. (U.K., Funds)

💰  Gutter Capital, based out of New York, raised $25M for a new fund to invest in pre-seed / seed-stage firms focused on affordability, economic mobility, and climate. More here. (U.S., Funds)

💰 Magnesium Capital, based out of London, is raising a debut private equity fund to invest in the energy transition, per a filing with the SEC. (U.K., Funds)

ELSEWHERE IN CLIMATE TECH

🏭 Onshoring: LG Energy Solution will spend $5.5B to build a new battery factory in Arizona, quadrupling an originally planned investment. It will make both EV batteries and batteries designed for energy storage systems.

📜 Policy: The Biden Admin released updated guidance on which EVs qualify for tax credits in the U.S., lifting a cap on the number of eligible cars while tightening restrictions on where the cars’ battery minerals can be sourced from & where batteries are manufactured. Many stakeholders disagree with various parts of the guidance; probably not the last we’ll hear about it.

📜 International policy: The U.K. unveiled new policies this week to accelerate climate tech and to keep up with the E.U. and U.S.’s stimulus programs. The plan is far less ambitious in terms of financial commitments but targets key areas like home energy efficiency, heat pumps, utility-scale renewable power deployments, and testing a CCUS support mechanism.

🚗 International policy, pt. II: The E.U. reached a final deal on banning gas car sales by 2035. Late objections from my countrymen in Germany ensured eFuel-fired vehicles would still be OK, in addition to battery-electric vehicles.

⚖️ Tipping the scales: The Pacific Island nation of Vanuatu won a case in front of the United Nations that calls for the court to establish an (advisory, non-binding) opinion on countries’ relative obligations to address climate change. In and of itself, this won’t change much, but it might offer future lawsuits precedent to build on top of.

🤝 Energy diplomacy: State-run China Energy aims to build a 1GW floating solar plant (including 1.8 million solar panels on top of the Kariba Dam) in Zimbabwe. China continues to lead the world in energy and infrastructure ‘diplomacy,’ especially in Africa.

🤝 EV diplomacy: The U.S. and Japan appear to be partnering more closely on EVs and battery manufacturing. A new deal that’s in the works would allow EVs and / or batteries manufactured in Japan to qualify for U.S. climate tech and clean energy subsidies. 

🗣️ Fault lines: The Biden Admin sold more oil and gas leases, this time in the Gulf of Mexico. These sales stem from provisions included in the IRA (not all of which are exclusively for clean energy). This was also the second time in March that federal territory opened for new oil drilling (the first being the controversial Willow project’s approval in Alaska). 

📉 Not all roses: Upward Farms is laying off 78 employees and will close its indoor vertical farming site in Brooklyn. It will also stop developing a larger 250k sq ft indoor farm in Pennsylvania. The firm raised $134M Series B in 2021. Elsewhere, New Age Eats (CA) will shut down after failing to fundraise to complete its cultivated meat facility. The firm raised a $25M Series A in 2021.

🚫 so good news: Lucid Motors, the Arizona-based EV manufacturer, is also planning a layoff as part of a business restructuring. The firm will lay off approximately 18% of its staff.

🌞 Closing on good news: Electricity generated by renewables surpassed coal in 2022 in the U.S. for the first time (per the EIA). A decade ago, coal was still king for power generation.

Tschüss,

– Nick

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