Greetings, Agents of Impact!
Call No. 37: Real-world effects of the rising price of carbon. With a ton of carbon fetching nearly $100 in Europe and prices rising in markets around the world, carbon is suddenly driving fund strategies, conservation financing, corporate accounting and crypto speculation. Join Emmanuel Lagarrigue of General Atlantic’s BeyondNetZero, Delton Chen of Global Climate Reward, and other Agents of Impact who are leveraging carbon finance for climate action. How are you seeing carbon pricing show up in deals and business plans? Let us know and we’ll call you up on The Call.
- Join The Call, Tuesday, Feb. 8, 10am PT / 1pm ET / 6pm London. RSVP today.
Featured: Climate Action
Deployment, deployment, deployment is the rallying cry as climate finance closes in on $1 trillion. Venture investments in climate tech grab the headlines. But spending for the energy transition by corporations, government and households is driving a far greater share of total climate finance and deployment. Purchases of renewable energy, storage, electric vehicles, heat pumps and other clean technologies jumped 30% last year to $755 billion. Investment in climate tech added another $165 billion. Together, spending and investments brought 2021 climate finance to $920 billion. BloombergNEF, which crunched the numbers, calls the estimate conservative. Last year’s increase in climate spending is all the more impressive given the commodity shortages and supply chain issues that have driven up costs for batteries, solar panels and other clean tech. Still, even record funding levels are not enough to stave off catastrophic global warming. “Governments will need to mobilize much more finance in the next few years if we are to get on track for net zero by 2050,” said BNEF’s Matthias Kimmel. What to watch:
- Growth markets. Solar, wind and other renewable energy made up the largest chunk of deployment spending at $366 billion. But electric vehicles and charging infrastructure, at $273 billion, grew at the breakneck pace of 77% over 2020, compared to 6.5% for renewables.
- Consumer demand. Businesses and households spent $400 billion on low-carbon purchases in 2021, surpassing spending by “supply side” energy producers for the first time. Consumer purchases of heat pumps, for example, grew 11% to nearly $53 billion. Businesses sunk capital into renewable power, charging infrastructure, hydrogen production, recycling, carbon capture and other projects. Led by Amazon and Microsoft, they also locked in more than 31 gigawatts of clean power through long-term contracts.
- Innovation investing. Venture investment, which BNEF calculates separately from commercial deployment, hit $54 billion last year. The biggest private hauls: Swedish battery maker Northvolt’s $2.8 billion raise, Commonwealth Fusion Systems ($1.8 billion), and Chinese battery producer SVOLT ($1.6 billion). Another $111 billion was raised by climate tech companies via SPACs, IPOs and other public offerings.
- Call to action. Dozens of businesses including Salesforce, Lyft and Danone North America have taken out a full-page ad in today’s New York Times calling on Congress and the White House to take immediate climate action. “We have the solutions to the climate crisis. Federal investment and policy will help bring them to scale,” states the ad, which was paid for by San Francisco-based Project Drawdown. See it here.
Keep reading, “Deployment, deployment, deployment is the rallying cry as climate finance closes in on $1 trillion,” by Amy Cortese on ImpactAlpha.
Dealflow: Follow the Money
Kula Bio raises $50 million to meet demand for sustainable nitrogen biofertilizer. A raft of biotech startups are helping farmers improve soil quality and rely less on synthetic nitrogen fertilizer, a major expense for farmers and contributor to environmental degradation and climate change. Similar to Pivot Bio and Ginkgo Bioworks, Somerville, Mass.-based Kula Bio plants microbes in the ground to capture nitrogen from the atmosphere and convert it to nutrition for crops. “Kula Bio’s drop-in replacement for synthetic fertilizer costs less, yields more and zeros out nitrogen runoff,” said Clay Dumas of Lowercarbon Capital, which led the round.
- Doubling down. Lowercarbon backed Kula’s $10 million seed round last year alongside The Nature Conservancy, Collaborative Fund and the Grantham Environmental Trust’s Neglected Climate Opportunities Fund. All four investors re-upped their investments in the latest round.
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Impact Engine backs The Helper Bees to keep seniors out of nursing homes. The vast majority of the more than 46 million seniors living in the U.S. wish to remain in their homes, rather than going to nursing homes or assisted-living facilities. Austin-based insurance tech startup The Helper Bees has built a network of long-term care and Medicare Advantage insurers to provide tools for aging adults who want to continue living at home. The company’s “aging-in-place” marketplace offers services such as home modifications and pest control for independent seniors. Chicago-based Impact Engine backed Helper Bees’ $12.8 million round. Northwestern Mutual Future Ventures and Trust Ventures also participated.
- Health equity. Impact Engine believes Helper Bees has the potential to improve health outcomes and reduce insurance claims and institutionalization rates of seniors from underserved populations. The Helper Bees provides “a solution that improves the aging process for older adults by focusing on the social determinants of aging,” wrote Impact Engine’s Sophia Friedman.
- Check it out.
Dealflow overflow. Other investment news crossing our desks:
- HSBC joins Breakthrough Energy Catalyst with a $100 million investment.
- Stockholm-based Norrsken Foundation raises $110 million for Norrsken22, a growth fund for African tech ventures.
- Equity Alliance, launched by former Time Warner CEO Richard Parsons, raises $28.6 million to invest in minority and female-led venture capital funds.
- L.A.-based MaC Venture Capital, a Black-led VC firm, launches its second fund. The firm raised $110 million for its first fund last year.
- Brazil’s Nilo Saude secures $10 million for software that streamlines data and communications for primary healthcare providers.
Agents of Impact: Follow the Talent
U.N. climate and finance envoy Mark Carney joins Macro Advisory Partners as senior counselor… Anne Schankin, ex- of CME Group, joins Catholic Impact Investing Collaborative as director… Beneficial State Bank appoints Surjit Chana to its board of directors… Atle Eide is appointed group chairman at Lake Harvest Group.
Airbnb seeks a carbon markets lead in San Francisco… Open Road Alliance is hiring a portfolio associate in Washington, D.C… Impact Engine is looking for a senior associate of economic opportunity in Chicago… Change Labs is accepting applications from Native entrepreneurs through Sunday, Feb. 20 for its business incubator… Registrations are open for ANDE’s investment manager training, Mar. 21-25.
Thank you for your impact.
– Feb. 1, 2022