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“How inappropriate to call this planet ‘Earth,’ when it is clearly ‘Ocean.’” ― Arthur C. Clarke
Today, does private equity look more like public equity investing? Can hardware companies grow as quickly as pure software companies? Will we really come back to the office, or will remote work remain the default? Has the VC ecosystem finally embraced debt? Can we 10x the number of high-quality introductions for founders to customers and investors? What does UU have planned for ʼ22? We answered these and other questions in our annual LP meeting.
Climate and Cities Solar looks set to be a central pillar of decarbonization, perhaps up to 50% of renewable energy generation. And this is despite supply chain issues and before we’ve fully unlocked our ability to shift demand with solutions like Flair, Sapient, Gradient, Plentify and Carbonara. Jenny Chase, author of Solar Power Finance Without the Jargon, shared a fantastic thread on the state of and outlook for solar.
Solar project financiers, along with almost everyone else, are just starting to understand the new operating challenges in a world with more hurricanes, fire, floods, and hailstorms. For example, the cost of solar used to be compared to other types of generation, but how do you value a home solar + battery system when the current grid is increasingly unreliable as a result of climate change? Yes, the weather this summer made the climate crisis much harder to ignore.
Despite all of this, and while climate change continues to get real, it appears the US is going to fall well short of initial hopes for climate policy, most likely because the final hopes for the fossil fuel industry lie with delayed policy action. But this policy shortfall will hurt in other ways. Let’s say you’re working on hydrogen solutions for industrial heat. You’d most likely want to deploy in the EU, China or South Korea, or perhaps Japan, Australia and Canada. The US lags far behind in ease of deployment of emerging renewable heat, according to the latest BloombergNEF analysis. And beyond industrial, gas boilers fuel millions of homes. Here’s how we can replace them.
Startups and Venture Venture investment continues to set records. But a lot of the funding surge has concentrated in a few areas like fintech and e-commerce and D2C. It’s true that there is more interest in climate investing; Urban Us tracked an approximately 50% increase over the last 12 months, in funds expressing specific interest in climatetech. But they tend to be earlier stage, and so we likely have a few years to wait for an onslaught of climate unicorns. One of the interesting trends we’ve tracked is how much private investing is starting to look like public market investing. As private firms generate more data, especially related to their revenue, it’s easier for more investors to find and evaluate them. As the team at Wing VC pointed out, in the last 10 years, there has been a 3x change in series A teams generating revenue and even a 2x change for series B.
Finding your first customers and revenue is an art. The best way to learn is by doing. Second best is learning from founders who share hard-won insights like “...never involve people who you personally know in the customer development process”. The rationale? If you can cold email a prospect and promise to solve a key pain for them, they will make the time to respond. Urgent climate action is likely leading us to some counterintuitive customers, as these researchers discovered in Hoping for the Worst? A Paradoxical Preference for Bad News.
Jobs and Opportunities Near Space Labs is hiring for multiple roles and wants unique perspectives on the team. Urbint is hiring Senior SREs to take charge of services, deployments and systems. Climatebase is looking for full stack engineers. And there are another 475 opportunities with 70 companies.
If you’re a startup, there are opportunities to work with cove.tool on carbon positive affordable housing, the State of Michigan on mobility and electrification, and New Energy Nexus on scaling EV charging in the US.
If you invest in startups, Oonee is raising on Republic to build out a critical piece of micromobility infrastructure – secure parking for electric and human-powered bikes, boards, scooters, and onewheels. Portfolio Updates Versatile raised $80 million from Insight Partners and Tiger Global to optimize construction and industrial processes. Urbint raised $60 million from a group that includes utilities to cut climate risk and prevent wildfires. LOOP closed a $21M Series A round led by Foundry Group and 01 Advisors to deliver a new kind of auto insurance. Near Space Labs raised $13 million from Crosslink and Toyota to provide fast, high-res earth imaging for insurers, governments, and disaster recovery. Urbio raised $2 million to help utilities navigate the energy transition by automating the analysis of new investments. And Blueprint Power was acquired by BP, which will accelerate their work to turn commercial buildings into virtual power plants.
Plus there have been exciting product breakthroughs and awards for Wright Electric on zero-emission aircraft, cove.tool on HVAC design, Blokable on housing design, and Near Space Labs on infrastructure and nature image requests. Wast*ed built their first unit to revolutionize above-ground sanitation. Lunewave won an SBIR phase 2 grant. Jimmy and Scott of EvolOH, Inc were named Breakthrough Energy Fellows.
UU News We’ve been working on credit and asset finance for more than three years, but in the last 12 months, we’ve seen a surge in demand for non-equity funding, especially from hardware-enabled teams. It’s an essential way to expand funding options for climate action. One very important milestone is now public – we’re partnering with Encina to massively increase our capacity to provide asset-backed finance to early-stage teams.
Edited by: Shaun With support from Shilpi, Stonly, Mark, Zeev, Ashtynn, and Yana
How did we create this update? The content comes from our slack channels where we review contributions from people like you. So you can wait for this newsletter or join us on Slack. You can find our previous updates here.
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