Climate Tech Trends and Pioneers
At Plum Alley Investments, we have been investing in disruptive innovation for five years, and we specifically look at advanced technologies creating generational impact. Our investment areas include the future of industry, frontier health, equitable economies and climate innovation. Within climate innovation, we see a moment of real opportunity as founders are bringing novel and scalable solutions to mitigate and adapt to the climate crisis. We have already deployed nearly 25% of our $50M invested capital to six climate innovation companies, and this is just the beginning.
As a leading venture firm investing in gender diverse founders, we feel it is our duty to make sure that the next generation of climate tech companies capitalize on a rich, diverse set of perspectives around what technologies we bring to market, how achieve environmental justice and how we ensure equitable access to capital and returns with the climate revolution.
Plum Alley’s Climate Innovation Perspective:
At Plum Alley, we back kickass companies with incredible women founders making real money to create generational impact. Climate is no different. We have been investing in gender diverse founders building innovative climate solutions since 2018. Our focus within climate has been supporting companies using novel technologies to slash C02 emissions, clean up our air, water and food and use big data to prepare the world for living with the realities of climate change while we try to hit ZERO emissions. Our expanding climate thesis spans a few key areas in the following companies.
Climate Tech Investing Trends & Pioneering Women Founders
To raise the visibility of the phenomenal women innovators in climate tech and to explore the exciting new areas of climate innovation ripe for venture investment, Plum Alley partnered with Silicon Valley Bank to host a special Inside View session on Climate Innovation last week. We were honored to talk with three pioneering women founders about their innovative new areas of innovation. Silicon Valley Bank’s Mona Maitra shared key highlights from their 2021 Future of Climate Tech Report.
You can watch the full session HERE, and here are our takeaways.
3 Women Pioneers in Climate Tech to Watch:
There is no shortage of brilliance among the women founders of Air Protein, One Concern and Sublime Systems who joined us for the discussion. All three women are leading scientists and technologists in their respective fields with deep passion and conviction for building scalable solutions to help combat climate change. They are respectively advancing how we decarbonize our food system, reimagine cement production and use technology to build resilience for our companies and cities amidst the realities of rising natural disasters. Full disclosure: Plum Alley is already an investor in Air Protein and One Concern.
- Dr. Lisa Dyson, Founder & CEO of Air Protein. Air Protein is at the forefront of carbon sequestration. Dr. Dyson and her team of scientists have reinvented fermentation using carbon transformation (a NASA inspired technology) to grow proteins creating an entirely new category of meat alternatives.
- Nicole Hu, Founder & CTO of One Concern. Nicole and her co-founder Ahmad Wani have built the first resiliency platform to help global companies and governments reveal hidden risks across built and natural environments posed by natural disasters.
- Leah Ellis, Founder & CEO of Sublime Systems. Leah has taken her PhD from MIT to incubate an entirely new approach to cement production for low-carbon lime and cement using off-peak renewable electricity.
Future of Climate Tech Takeaways:
The Bad News:
- The number of $1B disaster events (severe storms, flooding, tropical cyclones, drought, etc.) has increased 4x in the last 20 years.
- We have now reached 50% of days with above normal temperatures, up from 25% in 2000.
- Bottom line: to combat climate change, we need to reduce GHG emissions from 51B tons / year to ZERO.
The Good News:
- We are amidst the onset of a tremendous climate innovation and transformation period, as our mandate is to change virtually every activity from transport, food production, manufacturing, to how we power society.
- The investments in Cleantech 1.0 helped dramatically reduce the cost of energy from renewable sources. The significant reduction in the “green premium” for renewable energy is driving a more rapid share of installed capacity for renewable solutions.
- Equally important has been the rapid adoption of enabling technologies like AI/ML, advanced manufacturing, robotics, and IoT which are unlocking a whole new level of potential innovation to address climate change.
The first wave of cleantech technologies like solar, EV, smart meters, among others are reaching a plateau of productivity with wider market adoption. Transportation and logistics have been the most active sector with venture funding surpassing $12B in 2020. This is not surprising as we have an entire infrastructure in need of full digitization and transformation in order to support electrification. Emerging areas of innovation where we will likely see more activity and venture funding include alternative proteins, carbon capture, battery recycling and smart grid technologies. Venture investments in Ag & Food reached $4B in 2020 and are on pace to surpass that level in 2021 while venture funding in Energy & Power reached $3.5B last year.
Investing in What Matters: With billions of new capital commitments to fight climate change, we took a look at whether investors are backing technologies that have the highest potential to drive down GHG emissions. Our friends at @SVB offered a glance at the share of GHG emissions by sector and the potential impact for decarbonization through technological disruption. Transportation is a top contributor with nearly 30% share of the US GHG emissions followed by the electricity generation and industry respectively contributing 25% and 23% of GHG emissions. Sustainable agriculture and building energy efficiency also play an important role in reducing GHG emissions albeit smaller than the other sectors. SVB highlighted that the trends around funding generally map to the most advanced stages of technological innovation where the green premium is on the decline, the market has shown readiness for adoption and the potential for decarbonization is impactful.
At Plum Alley, we are energized by the tremendous influx of capital and rapid pace of innovation focused on climate change. We are optimistic that collectively we can transform our systems for a healthier planet. We are now at a critical moment where investing in these technologies will serve the market, both enterprise and consumer, while simultaneously putting climate first. We need to ensure diverse founders have a significant role in building a cleaner future that is also inclusive, and that the climate revolution has diverse investors invited to participate in the journey.
