Climate Tech 360 – Détails, épisodes et analyse

We are taking a short break ahead of New York Climate Week (NYCW) but stay tuned for some amazing guests in the coming months.

If you are attending NYCW and want to connect in person, please message me on LinkedIn or at info@climatetech360.com. 

In this episode, Dr. Staffan Qvist, talks about how to get an edge in science tech due diligence using his expert network, DeepSense. DeepSense is a network of scientists, engineers and industry specialists that provide tailored support for your science tech due diligence. The company helps investors evaluate startups' technical feasibility connecting them with experts in specific fields. The process involves reviewing the startup's materials, engaging experts to assess the technology, and conducting a call with the experts, investors, and startup founders. DeepSense aims to identify gaps or areas that need further clarification in the technology and provide valuable insights to investors. The level of engagement and duration of the process depends on the stage and size of the investment. DeepSense provides deep tech investors with an edge by offering a team of experts to dive deep into the technology being evaluated. This gives investors an extra weapon in their arsenal and allows them to make more informed investment decisions. DeepSense helps ensure that capital is directed to the right technologies, avoiding investments in the wrong things. DeepSense also supports startups in preparing for tech due diligence, helping them structure their data rooms, answer questions, and plug any gaps in their knowledge.

Takeaways

Deep Sense helps venture capital investors assess the science and technology risk of startups.

They connect investors with experts in specific fields to evaluate the technical feasibility and potential of the technology.

The process involves reviewing startup materials, engaging experts for assessment, and conducting a call with experts, investors, and founders.

Deep Sense provides valuable insights and identifies areas that need further clarification or investigation. DeepSense provides deep tech investors with a team of experts to dive deep into the technology being evaluated, giving them an edge in making informed investment decisions.

The integrated science tech due diligence framework released by DeepSense offers a comprehensive checklist for investors and startups to navigate the tech due diligence process.

DeepSense supports startups in preparing for tech due diligence, helping them structure their data rooms, answer questions, and fill knowledge gaps.

By working with DeepSense, investors can ensure that capital is directed to the right technologies, avoiding investments in the wrong things.

Links

Link to book a free introductory call with DeepSense here. 

Report on How to Prepare for Science Tech Due Diligence

Join the waitlist for their Ripple at the Drop conference here.

Link to report 

Contact Us

Guest: https://www.linkedin.com/in/staffanq/

Email us: info@climatetech360.com

Host: https://www.linkedin.com/in/samiaq/

This conversation with Kajsa Ryttberg-Wallgren, EVP of Global Growth at H2 Green Steel, explores the milestones achieved by H2 Green Steel in securing funding for its first-of-a-kind Boden plant. The discussion covers topics, such as early financing, partnerships and value chain support, securing site and power allocation, team structure and growth, joint ventures, and the massive fundraising round. The conversation also delves into the debt structure and equipment financing, working with different types of investors, and the key milestones that enabled H2 Green Steel to raise €1.5 billion in equity financing and sign definitive agreements for €4.2 billion in debt. The discussion covers topics such as securing debt from export credit agencies, early consideration of project finance, replicating financing structures for future projects, power purchase agreements and energy sourcing, securing iron procurement, carbon credits as part of the revenue stack, the financing structure for future projects, involvement of strategic partners, scaling the team and organizational structure, challenges in recruiting specialized talent, milestones and de-risking for financing, location as a key factor in bankability, and the importance of timing in success.

Takeaways

Early consideration of project finance and learning from similar projects can help structure financing, from the beginning.

The financing structure can be replicated for future projects, but location-specific factors must be considered.

Carbon credits can be an important revenue stream for projects with low or no CO2 emissions.

The team and organizational structure must evolve as the company scales and moves into different project phases.

Recruiting specialized talent from around the world is crucial for success in capital-intensive industries.

Milestones and de-risking are important for attracting financing partners.

Location plays a significant role in the bankability of projects, considering factors such as renewable energy availability and cost.

Timing is a crucial element of success, as market conditions and regulatory frameworks can impact project feasibility.

Contact Us

Guest: https://www.linkedin.com/in/kajsaryttbergwallgren/

Email us: info@climatetech360.com

Host: https://www.linkedin.com/in/samiaqader/

This conversation with Petros Lekkakis explores the concept of 'first of a kind’ (FOAK) in the climate tech space, which refers to hard asset companies developing technologies at the demonstration or pilot scale and seeking to deploy their first commercial minimum viable product. The discussion highlights the importance of FOAK technologies in achieving net-zero targets and the need for collaboration between venture capital and infrastructure investors to bridge the financing gap. Key players in early infrastructure financing include venture capital firms, concessionary capital providers, growth equity investors, strategic players, government agencies, and multilaterals. The conversation also addresses the knowledge gap in commercializing technologies and the role of specialized funds in providing the necessary expertise and capital to support early infrastructure projects. Two case studies, H2 Green Steel and Infinium, highlight the importance of securing long-term contracts and off-takes to de-risk projects and attract capital. Learnings from the financing markets of solar and LNG provide insights into risk mitigation, project structuring, and the importance of standardization. The episode concludes with a startup checklist that includes team building, contract finance, tech demonstration, focus on FOAK projects, pipeline development, strategic interest, and a solid business plan.

Takeaways

First-of-a-kind refers to hard asset companies developing technologies at the demonstration or pilot scale and seeking to deploy their first commercial MVP.

Collaboration between venture capital and infrastructure investors is crucial to bridge the financing gap for first-of-a-kind technologies.

Key players in early infrastructure financing include venture capital firms, concessionary capital providers, growth equity investors, strategic players, government agencies, and multilaterals.

Specialized funds can provide the necessary expertise and capital to support early infrastructure projects and bridge the knowledge gap in commercializing technologies. Securing long-term contracts and off-takes is crucial for de-risking infrastructure projects and attracting capital.

The success of H2 Green Steel and Infinium demonstrates the importance of securing firm off-takes from reputable partners.

The early infrastructure model can be applied to other industries, such as agriculture, by forming partnerships with strategic players.

Learnings from the solar and LNG markets provide valuable insights into risk mitigation, project structuring, and standardization.

A startup checklist for early infrastructure projects includes team building, contract finance, tech demonstration, focus on first-of-a-kind projects, pipeline development, strategic interest, and a solid business plan.

Contact Us

Guest: https://www.linkedin.com/in/lekkakis/

Email us: info@climatetech360.com

Host: https://www.linkedin.com/in/samiaqader/

This episode explores the investment focus of Syngenta Group Ventures, Syngenta’s venture capital group with Michael Lee.  The conversation covers an overview of what Michael categorizes as Agtech vs Agmarkets, as well as the technologies within those segments that are of particular interest to the company. We discuss exit opportunities for companies in these segments as well as the historical average valuation at exit and whether there is a cap. The episode concludes by discussing the importance of a startup being differentiated in this segment to create value. 

Takeaways

Syngenta is a multi-billion, Chinese-owned agrochemicals company, with 50,000+ employees. 

Syngenta Group Ventures does not focus broadly on climate tech but on things that support farmers or farming.

Several different technologies are of interest to the group, both in the Agtech and the Agmarkets segments, and they typically avoid investing in companies that require high capex and have high energy needs. 

The average valuation of the top 10 acquisitions in Agtech over the past decade is approximately 300 million. This would imply, for a 3x return, that the final round valuation would be capped at 100 million (at Series B).  

Contact Us

Guest: https://www.linkedin.com/in/michael-lee-65084/

Email us: info@climatetech360.com

Host: https://www.linkedin.com/in/samiaqader/

This episode explores the topic of offtake agreements in the context of climate technology projects with Kobi Weinberg. The conversation covers the challenges faced by early-stage companies in transitioning from venture capital funding to debt financing, and the role of offtake agreements in this process. We discuss the basics of offtake agreements, including their definition, key considerations for buyers and lenders, and the variability of terms across different industries. We also discuss the involvement of financiers and governments in de-risking offtake agreements and provide examples of offtake agreements in sustainable aviation fuel, hydrogen, and carbon removals. The episode concludes with a list of resources that startups can use to navigate the process of structuring off-take agreements. 

Takeaways

Offtake agreements play a crucial role in the transition from venture capital funding to debt financing for early-stage climate technology projects.

Buyers and lenders have different considerations when it comes to offtake agreements, including price, volume, delivery, non-delivery, and quality.

Engaging with financiers early in the process can provide valuable guidance and help align the terms of the offtake agreement with the requirements for raising debt financing.

Offtake agreements can vary significantly depending on the industry and the specific output being purchased.

Governments and nonprofit organizations can play a role in de-risking offtake agreements and supporting the development of climate technology projects. 

Challenges and risks associated with off-take agreements include pricing uncertainty, credit risk, and termination risk.

Mentioned on the podcast

CREO’s Introduction to Offtake Agreements

CREO’s Introduction to Risk Transfer Solutions for Climate Projects

Department of Energy

Spring Lane Capital

Munich Re

Elemental Accelerator

Prime Coalition

New Energy Risk

Contact Us

Guest: https://www.linkedin.com/in/kobiweinberg/

Email us: info@climatetech360.com

Host: https://www.linkedin.com/in/samiaqader/

Dr. Jonathan Foley discusses the time value of carbon and the importance of taking immediate action on climate change. He emphasizes the need to prioritize solutions that can be deployed now rather than waiting for long-term technological advancements. Dr. Foley highlights the mismatch between investment and carbon reduction, urging investors to align their capital with low-carbon solutions. He also discusses the role of technology in various sectors, including electricity, industry, transportation, buildings, and food and agriculture. Dr. Foley calls for more investment in technologies that monitor and improve supply chains, reduce waste, and promote regenerative agriculture. He discusses the Drawdown Capital Coalition, which aims to provide science briefings and deep dives on important climate topics for impact investors and philanthropists and emphasizes the need to focus on areas that have been neglected or where the hype is ahead of the science, such as deforestation and methane emissions. He concludes by urging the deployment of existing solutions and the importance of time in addressing climate change.

Takeaways

The time value of carbon is similar to the time value of money, emphasizing the importance of taking action on climate change now rather than waiting for future solutions.

Investors should prioritize solutions that can be deployed immediately and have a significant impact on carbon reduction.

There is a mismatch between investment and carbon reduction, with a disproportionate amount of funding going towards technologies that are not effective in addressing climate change.

Technology plays a crucial role in sectors such as electricity, industry, transportation, buildings, and food and agriculture, but it should be focused on solutions that monitor supply chains, reduce waste, and promote regenerative practices. The Drawdown Capital Coalition provides science briefings and deep dives on important climate topics for impact investors and philanthropists.

The low-hanging fruit for addressing climate change includes tackling methane leaks, stopping deforestation, and improving efficiency. 

Mentioned on the podcast

Project Drawdown Capital Coalition

Contact Us

Guest: https://www.linkedin.com/in/jonathan-foley-182808b9

Email us: info@climatetech360.com

Host: https://www.linkedin.com/in/samiaqader/

This conversation with Hayn Park provides a trader’s perspective on carbon markets and pricing, with a focus on the EU ETS. The discussion covers the current global targets for carbon reduction, the compliance markets and carbon pricing mechanisms, the need for carbon reduction, and the challenges of expanding coverage in the EU ETS. The conversation also explores the role of economic indicators in carbon trading, the liquidity and size of the carbon market, and the day-to-day activities of a carbon trader. Additionally, the conversation touches on other carbon markets and the debate between cap-and-trade and carbon tax approaches. Overall, the conversation highlights the need for more aggressive action to achieve carbon reduction targets. The conversation explores the challenges and potential solutions related to carbon pricing and climate change. It discusses the initial shock of implementing carbon pricing, the viability of new technologies, and the need for global carbon pricing. 

Takeaways

Carbon markets and pricing mechanisms play a crucial role in incentivizing carbon reduction and mitigating climate change.

The EU ETS is the most developed compliance market, but there are also regional markets in the US, China, and other countries.

The carbon market is influenced by economic indicators, market sentiment, and expectations of future policy decisions.

Achieving global carbon reduction targets requires more aggressive action and a combination of technological solutions, policy changes, and international cooperation. Implementing carbon pricing may initially cause economic shocks, but it can lead to the viability of new technologies and accelerate the transition to renewable energy sources.

Global carbon pricing is necessary to avoid economic imbalances and ensure a level playing field for industries across different countries.

Bringing all countries on board with carbon pricing is challenging but essential for effective climate action.

Technology plays a crucial role in addressing climate change, and its unpredictable nature makes it a wildcard in the fight against global warming.

The conversation acknowledges the challenges and uncertainties but emphasizes the importance of taking action to address climate change.

Connect with us:

Guest: https://www.linkedin.com/in/haynpark/

Email us: info@climatetech360.com

Host: https://www.linkedin.com/in/samiaqader/

Bailey Morrow from HSBC Innovation Banking discusses the structure and mandate of the climate tech team, as well as the services they provide to startups. She explains the different types of debt financing they offer, including venture debt, equipment financing, and hardware as a service. She highlights the role of HSBC in connecting startups with corporates and the diligence process for debt financing, emphasizing the importance of business metrics and key performance indicators to qualify for funding.

Takeaways

HSBC Innovation Banking provides global banking services and lending solutions to climate tech companies.

They offer venture debt, equipment financing, and hardware as a service.

Project finance is challenging for early-stage companies, and bridging the gap between venture debt and project finance is a key focus.

HSBC acts as an ecosystem builder, connecting startups with corporates and facilitating collaboration.

Engaging with lenders early in the fundraising process and having a fully funded plan are important for debt financing. Understanding business metrics is crucial for securing funding in climate tech.

Connect with us:

Email us: info@climatetech360.com

Website: https://www.climatetech360.com

Host: https://www.linkedin.com/in/samiaqader

Guest: https://www.linkedin.com/in/bailey-morrow-b763565/

This conversation with Akshat Rathi explores the concept of climate capitalism and how capitalism can be a driving force for climate change mitigation. It discusses the modification of capitalism to align with climate goals as well as the challenges of partnering with fossil fuel companies in the context of climate hardware startups, the Breakthrough Energy model, enabling factors for climate technologies, the importance of storytelling in climate tech, and Akshat’s current focus as a senior reporter for Bloomberg News.

Takeaways

Capitalism can be a powerful tool for addressing climate change when it is modified to align with climate goals.

Understanding the limits and regulations imposed by nature is crucial in modifying capitalism for climate change.

Founders should carefully consider the potential benefits and drawbacks of partnering with oil and gas companies, taking into account the availability of climate tech funding and the skills needed for their startups.

Enabling factors for climate technologies include policy, finance, global diplomacy, shareholder activism, and effective storytelling.

Effective storytelling is crucial for climate tech founders to communicate their ideas in a simple, compelling, and memorable way.

Mentioned in the podcast:

Askhat’s book, Climate Capitalism: https://akshatrathi.com/book/

Breakthrough Energy: https://breakthroughenergy.org/

Connect with us:

Guest: https://akshatrathi.com/contact/

Email us: info@climatetech360.com

Host: https://www.linkedin.com/in/samiaqader