Fundamentals of Climate Technology Financing: Sequel - The Innovative Game-Changers
In the ongoing battle against climate change, a new wave of startups is making strides in decarbonising various industries. These innovative companies, backed by forward-thinking investors, are poised to disrupt traditional sectors and advance global climate goals.
Stephen Price, CGF investment director, expressed his belief that Sunswap, a start-up based in Surrey, will accelerate the decarbonisation of cold chain logistics, transitioning the industry away from highly polluting legacy technology. The company's success in demonstrating product market fit, as proven by 30 trials, has led to a £17.3m series B fundraise.
Sunswap's chief executive, Michael Lowe, stated that the recent fundraising success and growing customer interest have accelerated their plans to build an in-house manufacturing facility.
Meanwhile, Nic Gorini, managing partner of Spin Ventures, believes that supply chain inefficiencies are the next frontier of climate alpha. He invests in enterprise-ready tech with live pilots, such as Sunswap, to address these issues.
Key climate tech startups identified as disruptors by investors include Northvolt, Octopus Energy, and Climeworks, among others. These companies focus on challenging industries such as energy, battery production, and carbon capture.
Northvolt (Stockholm, Sweden) is a leading battery producer valued at $11.8 billion, focused on lithium-ion batteries with an 80% lower carbon footprint. They scale by producing batteries using 50% recycled materials and aiming to reduce 90% of their carbon footprint by 2030 through clean energy integration.
Octopus Energy (London, UK), valued at $5 billion, provides renewable energy to over 5 million UK homes and businesses. Their growth is supported by a proprietary platform, Kraken, which enables efficient energy management and grid integration while expanding their green energy infrastructure.
Climeworks specializes in direct air capture technology to remove CO2 from the atmosphere, scaling through technological innovation and partnerships.
Programs like the Compute for Climate Fellowship by IRCAI and AWS back 23 startups leveraging AI and cloud computing to develop scalable climate solutions, highlighting how AI is accelerating the scaling of climate tech operations worldwide.
Climate tech startups are increasingly supported by accelerators and grants focused on scaling solutions addressing climate resilience, clean energy, and sustainability in diverse regions such as the US and Latin America.
One such startup, Carbon Re, is using AI to reduce emissions in cement, steel, and glass industries. Co-founder and COO Buffy Price recently attended a reception celebrating the UK's AI ecosystem at 10 Downing Street. Access to finance and building a scalable product have been the biggest challenges faced by Carbon Re.
Carbon Re is backed by UCL Technology Fund and Cambridge Enterprise Ventures, which the company says helped build its multidisciplinary team and finance early product applications. Carbon Re is focusing on the pyro process stage of cement production, servicing customers from around the world. The startup aims to finance scale and expand its reach beyond cement into the wider industrial manufacturing market, which is a $1.5tn opportunity.
Carbon Re will begin its Series A round in the coming weeks. Another notable startup, Munro EV, based in Scotland, is working on electric vehicles for off-road use, which could be useful for mining and construction companies.
However, it's important to note that there is no standardized definition of the phrase 'hard-to-abate'. Decarbonisation is more challenging, expensive, and complicated in some industries like cement, steel, chemicals, and logistics. Barton Blakeley in Hertfordshire claims to convert carbon emissions into silica, a material with applications in paints, plastics, and pharmaceuticals.
The disruptors (Carbon Re and Sunswap) and the matchmakers (investors) are at similar points in their financing journey, with each demonstrating their product's fit and aiming to scale their operations. Investors in Sunswap's latest round included BGF, Shell Ventures, Move Energy, Barclays, and the Clean Growth Fund (CGF).
These startups scale by combining cutting-edge technology, sustainable practices, and access to mentorship, funding, and cloud-based AI tools, enabling them to disrupt traditional industries and advance global climate goals.
- Stephen Price, from the Clean Growth Fund (CGF), has faith in Sunswap's potential to hasten the decarbonisation of cold chain logistics, as the start-up utilizes technology to transition the industry away from outdated, highly polluting technology.
- Michael Lowe, CEO of Sunswap, has accelerated plans to build an in-house manufacturing facility due to recent fundraising success and growing customer interest, enabling the company to scale its operations in the environmental-science sector.
- Nic Gorini, from Spin Ventures, believes that climate tech investing in enterprising tech with live pilots, such as Sunswap, can tackle supply chain inefficiencies and generate climate alpha, contributing to the broader goals of climate change mitigation.
