Which Startups Could Benefit from Biden’s Infrastructure Bill?
Congress finally passed a pared-down version of President Joe Biden’s Infrastructure Investment and Jobs Act of 2021 (IIJA) last month that will designate more than $1 trillion to repair roads, airports, and railways, expand access to high-speed internet, tackle the climate crisis, and address other critical aspects of the nation’s crumbling infrastructure. Many startups, including some of our portfolio companies, closely monitored the bill’s passage to see how it would impact their respective industries. Here are some of the key provisions that clean energy, transportation, and infrastructure startups should be aware of:
- $65 billion for expanding internet access — The pandemic has highlighted how critical broadband internet is to modern society. Millions of people remain unable to access adequate internet for work, school, or connecting with family. This investment in broadband infrastructure is exciting for startups looking to expand fixed wireless networks or develop 5G applications. Perhaps most importantly, this investment could bridge the digital divide for the more than 21 million Americans (including millions of children) in rural communities or underserved areas who do not have broadband access. We are excited to see how solutions like Tarana’s fixed wireless network could transform the nation’s broadband infrastructure in the years to come.
- $110 billion to repair roads, bridges, and other major transformational projects — This funding represents the single largest investment in road repairs since the construction of the interstate highway system in 1956. The funding is unique because of its focus on climate change’s pending impact. More than $50 billion is designated for projects that protect against droughts, heat, floods, and wildfires. At Prime Movers Lab, we recognize these threats, which is why we invested in ocean infrastructure startup Oceanix to help coastal communities prepare for rising sea levels.
- $7.5 billion for a national network of electric vehicle (EV) chargers — The US’s market share of plug-in EV sales is one-third the size of the Chinese EV market. Even when you control for the population difference between the two countries, it’s clear the US needs to make rapid investments in its EV infrastructure to encourage the adoption of electric vehicles. This is an exciting first step that will empower many local communities to modernize parking facilities by equipping them with chargers and battery systems.
- $65 billion for clean energy improvement and technology — The legislation invests in smart grid technologies that will make our nation’s electric grid more flexible and resilient. It also invests in next-generation technologies like advanced nuclear reactors, carbon capture, and clean hydrogen, which are critical for breakthrough innovations capable of creating abundant clean energy for centuries to come. At Prime Movers Lab, we are particularly excited about this sector, so we are making investments in fusion energy (Commonwealth Fusion Systems and Focused Energy), carbon capture (Carbon Capture), and green hydrogen (Heliogen, whose tech is being used by Bloom Energy to create green hydrogen).
On the Horizon
The other major piece of legislation that could impact the startup ecosystem is the Build Back Better bill (a.k.a. the “social spending bill”). The final price tag and path forward for the bill remain unclear. The key senators who are needed to reach a simple majority to pass the bill via the reconciliation process are still holding out, and the rules in the Senate are more stringent than in the House, which means some provisions will be eliminated. If the Senate makes any changes to what the House passed in November (which is almost certain), then it will have to resolve differences to produce a uniform bill that President Biden can sign.
Unlike the infrastructure bill, which had just enough bipartisan support to allow for a few Democrats to vote against it, the BBB bill will likely face uniform opposition from Republicans, meaning Speaker Nancy Pelosi and Majority Leader Chuck Schumer will have to come up with something that both the moderates and progressives in their respective caucuses can support. When you add in midterm election year political antics, the window for passing such an ambitious bill gets smaller and smaller. Bottom line here: Before this bill is in a position to be signed into law, what is “in” and “out” will change almost on a daily basis going forward, so stay tuned for updates.
Regardless of your political affiliation, this is an exciting time to be investing in breakthrough science startups. We’re on the verge of major innovations in energy, transportation, infrastructure, manufacturing, agriculture, and human augmentation. Much of the funding in the infrastructure bill could accelerate breakthroughs like the ones outlined in our Breakthrough Science Roadmap, which has us inspired and excited about a future of improved human wellbeing and societal transformation.