Our investment in Sirona
Humanity’s collective climate record keeps getting worse. We are very much on course to significantly overshoot the 1.5C/2C threshold for warming set by the Paris Agreement, and every year that goes by represents a new peak in both global emissions and temperatures.
In this context, technologies that were once fringe ideas have become a key part of any climate mitigation plan. Chief among them is DAC: direct air capture, achieved by machines sucking air through fans and then trapping CO2 with specialised filters. There have traditionally been several concerns that, despite progress made by start-ups like Climeworks and Global Thermostat, have held us back from making an investment into this category. Then we met Thor and the team at Sirona, with an ambitious approach to finally address these head on.
Traditional Concern #1: It’s hard to find the right DAC technology
We’ve met with many teams over the years piloting new technologies for carbon capture, from solvent-based, to sorbent-based, to electrochemical systems. Like in other deep tech categories, it can sometime feel that the right investment is in a specific technical innovation found after a thorough survey of the entire landscape, perfectly timed on the TRL development roadmap. Our deep tech investments have taught us that can be a red herring, and that not too differently from our software portfolio, it is often true that amazing founders win over amazing technical moats. Sirona’s approach is a reminder of that. We’re not betting on a technology we’ve never seen before, but on an approach that prioritises fast iterative cyles and a modular build, where different technologies, whether developed in house or by external parties, can be swapped in and out depending on their changing techno-economic profile. We love to back teams that are dogmatic about the goal, but pragmatic about the way there.
Traditional Concern #2: DAC is too slow and costly to scale
The focus on iteration, inspired by Thor’s former workeplace Tesla, also means the Sirona team has an edge in speed to market. While most other companies in the space create a new version of their machines on average every 18 months, this team has shipped 3 prototypes in the last 12 months, each capturing 10x more CO2 than the last, and a 4th prototype is going live in the next few weeks. Each prototype brings new decisions to reduce the ultimate cost of carbon removal. Sirona’s modular machines also mean their technology is not just faster to market, but faster to scale. Cheaper modules can be tagged on in response to new demand.
Traditional Concern #3: DAC has no co-benefits
One thing we love from nature-based solutions for carbon removal is co-benefits. For example, projects aimed at ecosystem restoration such as the ones developed by our portfolio company ERS work in close cooperation with local communities. An important part of Sirona’s strategy is the deployment of its DAC machines in Kenya’s Great Rift Valley. There are many reasons why this is an attractive place for DAC. The deployment of these machines there means better energy access for local communities (whose needs would otherwise be insufficient to justify investment in new renewable capacity).
Traditional Concern #4: The DAC buyer pool is too small
Addressing the above concerns really matters: de-risked technology, lower cost, faster time to market and scale, modular designs that are easier to fund, and co-benefits for local communities are all essential to grow the buyer pool for DAC beyond the current community of climate-positive tech companies (something that our portfolio company Supercritical is also on a mission to do!) This is the kernel of this bet: that a Tesla-level-of-ambition team can make DAC technology mundane, affordable and ubiquitous.
