Survival tech investments - to the moon! #3

This masterpiece is showing off my photoshop skills (and is actually done in PowerPoint)

Hello Human,

An astronomical welcome to this week’s Expedition! This week, we take a deep dive into the field of climate tech investments.

For those who already had enough of molecules and science, this is my gift to you. Enjoy the numbers and finance sutff for once! For those who were waiting for that quantum physics awesomeness, my schedule broke, and this is what I could pull off yesterday evening and this morning. Finance and investing maybe not be as cool as science, but they are still super relevant in this capitalist world to get things rolling!  

Before we start, if you are not familiar with Venture Capital (VC), take a short moment and get acquainted with this bizarre and amazing asset class with this video and/or drop me a note for more resources.

Another note: In this article, I also use the term survival tech when referring to climate tech. I find that survival tech captures better the fact that this is about our humankind's survival, not about something abstract and innocent.

VC investments in survival tech - to the moon!

The State of Climate Tech 2020 report by PwC reveals some juicy facts about investments into climate tech startups over the past years.

I’ve collected here the juiciest bits for you:

1. Venture Capital (VC) investments into climate tech grew by a whopping 3750% between 2013-2019.
2. That 3750% increase in investments is on the order of 3 times the growth rate that AI experienced during its peak years.
3. The world’s climate tech startups got $60B of funding between 2013-2019.
4. In 2019, climate tech investments still only represented 6% of the total annual provided VC funding.  
5. Climate tech investments were led by North America ($29B), followed by China ($20B), and Europe ($7B).

The wave of new climate and impact funds

This to-the-moon growth rate of VC investments in survival tech is supported by many news that I’ve been following over the past few years.

Several new funds focused purely on climate or more generally on impact have been recently announced. Here is my compilation of announcements of new climate and impact funds:

I am missing whole continents on the list: Africa, Asia, South America… What announcement of new climate or impact funds did I miss? Share the article, tag Survivaltech and comment!

The rising interest from renowned generalist VCs

Not only are new climate and impact tech focused funds emerging but some of the most established generalist VCs are also turning to climate tech.

Sequoia, the superstar of the VC world behind multiple unicorns like Apple, Google, Stripe, GitHub, and Nvidia, announced in January 2020 that they are actively investing in climate tech and sustainability.

Andreessen Horowitz invested into a carbon offset API developer Patch in February of this year.

EarlyBird, one of the oldest and largest European VC funds, formed a ClimateTech division in August 2019.

Wondering, who else is investing in climate tech? Check this comprehensive list of climate tech investors by Climate Tech VC.

Attention from the business world’s rockstars towards climate

Interestingly, the rise of VC investments into survival tech is coupled with investments from some of the world’s most powerful humans.  

Elon Musk placed a $100M prize for the best carbon capture technology in January 2021.

Jeff Bezos, the founder and CEO of Amazon, announced the $10B Earth Fund in February 2020.

Bill Gates founded Breakthrough Energy in 2015 to support (and invest in) innovations that will lead the world to net-zero emissions. In February this year, he published a book on climate change called How to Avoid a Climate Disaster.

The investment opportunity of a lifetime

Survival tech is about the survival of humankind. It is a once in a lifetime investment opportunity.

Energy Impact Partners’ EIP Climate Tech Index reveals some impressive insights about climate tech companies. Starting at the beginning of 2020, climate tech companies have been beating companies at Nasdaq.  

The EIP Climate Tech Index tracks the performance of public companies that are “primarily involved in providing technology that supports global decarbonization”. It is an equal-weighted index, meaning that the index’s performance is equally dependent on all stocks in the index and not weighted on market caps.

The trend in EU ETS (Emission Trading System) Allowance Prices shows another great signal for climate tech investments. The Allowance Price is now at an all-time high.

EU ETS is a carbon market, where emission allowances are traded between “installations”. These installations are, for example, electricity and heat providers emitting CO2 emissions. See the list of covered sectors and gases here.    

Newsletters to stay up-to-date about climate tech investments

• Climate Tech VC: a weekly newsletter about climate tech startups, funding rounds, interviews with founders and investors. US focused.
• Sustain by Sifted: a weekly newsletter about circular economy, sustainability, and climate startups, funding rounds, articles. Europe focused.

The time is rife for survival tech. Never has there been more funding for climate tech companies. Seems to me like the perfect timing to start a survival tech startup from both business and humanity perspectives!

If you enjoyed this deep dive, share this Expedition with your friends, family, and social media. We need more people join us to save the humankind!

I would love to hear feedback, comments, and suggestions. Be in contact via pauliina@survivaltech.club or at Twitter. Until next week!

Best, Pauliina

Sources:

• Gates, B. My new climate book is finally here. Link
• Climate Tech VC. Weekly newsletter. Link
• EIP Climate Tech Index. Link
• EU Emissions Trading System (EU ETS). Link
• ICAP. Allowance Price Explorer. Link
• Jeff Bezos. Announcement of Earth Fund: Link
• Klemm, P. EarlyBird & ClimateTech: Intertwining Impact and Financial Returns. Link
• Musk, E. (2021). Announcement of the prize for the best carbon capture technology. Link
• PwC. The State of Climate Tech 2020 report: Link
• Sanderson, H. (2021). Clean tech 2.0: Silicon Valley’s new bet on start-ups fighting climate change. Financial Times. Link
• Schieber, J. The carbon offset API developer Patch confirms a $4.5million round led by Andreessen Horowitz. Link 
• Sequoia’s announcement on investing in climate tech: Link
• Sustain by Sifted. Weekly newsletter: Link