Climate crisis brings venture capital money back to clean tech

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Ten years after the “mini-green bubble” depleted private funding for the sector, venture capital funding is flooding clean tech companies.But John Thornhill Insist The investment boom in Climate Technology 2.0 is more promising than version 1.0.

Between 2006 and 2011, VCs spent more than $ 25 billion on clean technology and lost more than half of their money, according to a study by. MIT Energy Initiative.

Funding for clean energy companies has almost run out of VCs. It was until 2020. From January 2020 to August 2021, more than $ 40 billion in VC funding has been poured into climate technology companies, already 37% above the total for the last two years, according to PitchBook data released this week.

For this, techFT # is another “Green bubbles“.

In 2006, it seemed to be a good condition for the growth of the clean technology sector. Fossil fuel prices were rising. The law has passed various parliaments around the world that strengthen the rationale for investment by clean energy companies. That year Inconvenient truth, Davis Guggenheim’s film on Al Gore’s campaign to educate the world on climate change has been released, depicting the promising future of biofuels, electrification and solar panels.

Silicon Valley has funded clean energy start-ups with the belief that scientific advances can be transformed into profitable companies, as chip makers and biotechnology companies have previously done.

But the global financial crisis has put an end to the clean technology boom. Falling global oil prices and the rise of the US hydraulic fracturing industry have made biofuel companies unable to compete. Meanwhile, Chinese solar companies have begun flooding the United States with cheap solar panels, taking advantage of government subsidies and low silicon prices.

But the unfortunate ending of the Clean Tech 1.0 story isn’t these external factors, but because, as John explains, companies weren’t ready to invest in VCs.

In his book Zero to One, candid Silicon Valley investor Peter Thiel analyzed the reasons for the crash and identified some flaws in the investor’s mindset. In summary, successful climate technology companies need to be able to provide clearly superior solutions to specific problems and globalize at the right time. “The world is not a laboratory. The sale and delivery of a product is at least as important as the product itself,” Tiel writes.

There have been some significant developments since the collapse of clean technology 10 years ago. Renewable energies such as wind and solar are beginning to compete for fossil fuels for the first time without resorting to government subsidies. Electric vehicles and mopets live in the busiest cities in the world, after advances in lithium-ion batteries have made them attractive alternatives to gasoline- and diesel-powered ones.

John writes:

Just as version 1.0 of most technologies can be “slightly sloppy and unfounded in economics,” version 2.0 of climate technology has proven to be more realistic and resilient. .. “Technology is important, but only if you know how to bring it to market and make money to scale,” said The Engine, a VC company backed by the Massachusetts Institute of Technology. The person in charge, Katie Rae, said.Start-upNS.

But crucially, Silicon Valley has changed its investment strategy. We no longer choose capital-intensive renewable energy projects with high up-front investment. Instead, they are choosing small businesses with niche products, from new battery storage technologies to laboratory-grown meat, low-carbon concrete, and sustainable aviation fuels.

This includes the US and Finnish start-up Carbo culture, which recently raised $ 6.2 million in venture capital to remove 1 billion tons of carbon dioxide from the atmosphere by 2030.

John again:

Carbo Culture’s pilot reactor, which transforms biomass into biochar that stores carbon in a stable manner for a thousand years, has just begun operations in California, and the company will move its first commercial plant to sell renewable heat to Helsinki in 2024. We are planning to open it. Carbo Culture co-founder Henrietta Moon says it’s difficult to set up a company, not to mention a company focused on new technologies. “The best help we can get is from VCs,” she says. “I think there is a huge opportunity to tackle climate change.”

Read John Thornhill’s Opinion Piece here Henry Sanderson’s excellent big lead here About the Clean Energy 2.0 investment boom.

Internet of Things (5)

1. Hedge fund wins big with Trump
A group of 11 hedge funds including DE Shaw and Saba Capital Earned millions A dollar of potential profit in one day after a special purpose acquisition company that merged with Donald Trump’s new social media group rose 421 percent on Thursday. Former U.S. President launched a social media called Truth Social this week aimed at competing with Facebook, Twitter, etc., creating a platform for his right-wing supporters ahead of his potential inauguration in 2024. bottom.

2. Renault’s chip problem gets worse
Renault Warned Due to a shortage of chips in the industry, about 500,000 vehicles will be produced this year. This is a significant dent in the Group’s production, compared to Renault’s forecast of 220,000 lost vehicles in early September. Darker forecasts were made as Renault reported a sharp decline in sales in the third quarter. Revenues for the quarter were € 9 billion, down 13% from the year-ago quarter. This is well below the € 11.3 billion that occurred in the same quarter of 2019 before the pandemic.

3. Snap will be the stock price
snap lost A quarter of its value in Thursday’s after-hours trading as social media groups announced a bleak outlook for the fourth quarter and blamed Apple’s recent changes in privacy. Snapchat’s parent warned that next quarter’s revenue would be between $ 1.16 billion and $ 1.2 billion, well below the current consensus estimate of $ 1.4 billion, according to S & P Capital IQ. Evan Spiegel, CEO of Snap, said that since Apple introduced a new privacy policy between April and June, it has become difficult for advertisers to understand the performance of the campaign and it has dragged revenue. Said that. The rule, which Spiegel states has “overturned” the industry, requires apps in Apple’s App Store to obtain explicit permission from users to track them for advertising purposes. “This was definitely a frustrating setback for us,” Spiegel said. “But in the long run, I think these privacy will change and protect the privacy of iOS users … We fully support it.”

4. Facebook is having a hard time appealing to young users
According to internal documents, the number of Facebook users in the United States is under 30. Declining And since it was acquired by Facebook for $ 1 billion in 2012, Instagram, which has gained tremendous popularity, seems to have reached the limit of growth among young users in major markets, and the company’s future Asks serious questions about. The company’s solution to growth challenges, which encourages users to open multiple accounts, poses technical, reputation, and legal issues. In particular, Facebook seems to have a hard time counting the actual number of users of the service.

5. Supply chain finance back in fashion
master Card Affiliated Working with UK financial technology company Demica to provide supply chain finance to business clients, it shows that demand for loan products remains strong after the collapse of Greensill Capital. Supply chain finance is the process by which a financial institution pays an invoice to a supplier, who accepts less than the full amount in exchange for faster payments.Large banks offer well-established financial products to corporate clients, but the pesky elucidation of supply chain financial specialists Greensill Capital Earlier this year, attention was focused on the methods that can be used to flatten and distort a company’s balance sheet.

Technical tools

Sony’s A7 series has long been popular with amateur photographers, offering high quality image creation at a competitive price.Sony this week Released An ALPHA 7 IV hybrid camera with a range of new features and improvements from the ALPHA 7 III, especially the transition from a 24MP sensor to a 33MP back-illuminated Exmoor R CMOS sensor. The ISO range for taking still images is the same as the previous model, running up to 204,800. However, the new model offers 4K UHD video recording that was previously unavailable.

The ALPHA 7 IV pre order For £ 2,399.

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