5 big deals this week

Hi there,

Happy long weekend to all the U.S.-based W2 warriors out there. Hope it’s been a delight. 

We’re trying to make Sunday’s newsletters more digestible. Let us know how we did.

In today’s email:

• 5 big ‘deals’ from the week in climate and energy

• More climate tech fundraising announcements 

• More climate tech and energy headlines

5 BIG ‘DEALS’

🛢️ Natural gas isn’t going anywhere

Lest we forget, the U.S. is the world’s largest producer of oil and natural gas (by wide margins). Chesapeake Energy, based out of Oklahoma City, and Southwestern Energy, based out of Houston, are merging via an all-stock deal that values Southwestern Energy at $7.4B. Chesapeake and Southwestern operate in the same oil basins, which could spark cost synergies. The combined company’s market cap will be $17B, and the combined entity will be the largest U.S. producer of natural gas. This follows a wave of oil and gas consolidation. 

You may rightfully ask, Nick, what does this have to do with making progress on climate change? Well, my first answer is nothing, per se. It just bears remembering that natural gas is an entrenched, global commodity. While transitioning from coal to natural gas in the power sector has helped reduce U.S. greenhouse gas emissions modestly (while preserving GDP growth), displacing natural gas use will require a generational effort.

📉 U.S. greenhouse gas emissions did fall in 2023, while GDP grew

Reporting from Rhodium Group reveals that U.S. greenhouse gas emissions fell close to 2% in 2023. That’s good news! 

Again, building on the section above re: natural gas, much of this owes to coal to natural gas switching in the power sector, as well as growth in renewable energy. I also have some concerns about how accurately greenhouse gasses beyond carbon dioxide, like methane and nitrous oxide, from sources like agriculture, are measured. It’s possible that while headline greenhouse gas emissions numbers are falling, the way other greenhouse gasses drive short-term warming could mean the U.S.’s contribution to global warming isn’t really falling.

🏭 Manufacturing build-out

As identified in our focus areas for 2024 coverage, how and whether announced lower-carbon manufacturing and industrial plants come to fruition over the coming 5-10 years is a hugely important story. This week, it’s worth noting there was a wave of additional, newly announced plants. We’ll add these to our list of projects we will track for you all.

• EVs: Vietnamese EV manufacturer VinFast will invest $2B to build a new manufacturing plant in India. The company aims to produce up to 150,000 cars annually at the plant. LG also announced it will build an EV charging factory in Texas.

• Greener ammonia: 8 Rivers announced it will build a $1B ‘blue’ ammonia plant in Texas. The plant is a first-of-its-kind (FOAK) project to deploy carbon capture technology in hydrogen and ammonia production. 8 Rivers aims to produce 880,000 tons of ammonia and capture 1.4M tons of CO2 per year at the plant annually and to break ground on the plant by 2025. We’ve covered 8 Rivers on our podcast previously (listen in here).

• Cement: Sublime Systems, a low-carbon cement manufacturer, has acquired a location in Holyoke, MA, to build a first-of-its-kind (FOAK) commercial-scale plant.

• Steel: Erdemir Group, which includes Turkey’s two top steelmakers, announced plans to build a $3.2B plant where it will use hydrogen, electric arc furnaces, and more solar generation capacity to reduce the emissions intensity of its steel production.

⚡ China continues to lead the ‘charge’

Chinese state-owned Jinneng Holding Group Co. broke ground on a ~$7.7B low-carbon energy project that combines wind turbines, solar panels, and battery storage. The company aims to onboard 6 GW of wind & solar capacity + 3.4 gigawatt-hours of energy storage (these are huge numbers) and to connect the project to the grid by the end of 2025.

Whatever else may be true about China and its climate efforts, the country is far and away the leader in low-carbon energy deployment right now, as visualized in the above graphic.

💸 Eyes on early-stage innovators

In keeping with our 2024 focus on food and ag, here are some interesting early-stage deals that stood out to me this week: 

• FA Bio, based out of Harpenden, U.K., raised ~$6.8M in equity funding to use soil microbe-based innovations to drive more sustainable agricultural outcomes.

• GeneNeer, based out of Yehud, Israel, raised $1M in seed funding for its gene editing and discovery technologies targeted at innovations in crops and agriculture. 

• Enifer, based out of Espoo, Finland, raised ~$13.2M in grant funding to build its first commercial-scale mycelium factory to make a “fungi-based protein with neutral taste and color.”

DEAL HEAT

Larger funding rounds

🔋 NineDot Energy, based out of New York City, raised $225M in equity funding to install more batteries in and around New York. ManuLife Investment Management led. More here. (U.S., Energy)

🔌 FINN, based out of Munich, Germany, raised ~$110M in equity funding for its car subscription startup that’s increasingly focused on electric vehicle options. Specifically, it aims to make 80% of its inventory electric by 2028 (from 40% today). Planet First Partners led. More here. (Germany, Transportation)

Medium-sized funding rounds.

💧 120Water, based out of Zionsville, IN, raised $43M in growth equity funding for its cloud-based water management software. Edison Partners led. More here. (U.S., Industry)

📊 Vortexa, based out of London, raised $34M in Series C funding for its energy and freight-focused software and data intelligence business. Morgan Stanley Expansion Capital led. More here. (U.K., Data Providers)

🔋 Cactos, based out of Helsinki, Finland, raised ~28.5M in equity funding to deploy more of its battery energy storage systems that leverage recycled EV batteries. OP Finland Infrastructure LP and the Finnish Climate Fund led. More here. (Finland, Energy)

⚡ RedoxBlox, based out of San Diego, CA, raised $8.9M in grant funding from the California Energy Commission and $6.7M from the DOE alongside a $9.4M Series A fundraise ($25M total) to demonstrate and continue to develop its thermochemical long-duration energy storage technology. Khosla Ventures led the Series A. More here. (U.S., Energy) 

🤖 Burro, based out of Philadelphia, raised $24M in Series B funding for its autonomous robotics and mobility business. Catalyst Ventures and Translink Capital co-led. More here. (U.S., Industry)

🔌 Recurrent, based out of Seattle, raised $16M in Series A funding for its EV battery reports on used electric cars. ArcTern Ventures led. More here. (U.S., Transportation)

📊 SynMax, based out of Houston, raised $13M in equity funding for its data intelligence platform focused on maritime and energy sector intelligence. Bill Perkins led. More here. (U.S., Energy)

🍄 Sqim, based out of Grassina, Italy, raised ~$12M for its mycelium / biomaterials-based development business targeting applications in the automotive, fashion, and interior design industries. CDP Venture Capital and ECBF VC led. More here. (Italy, Materials)

Smaller funding rounds

🦠 FA Bio, based out of Harpenden, U.K., raised ~$6.8M in equity funding to use soil microbe-based innovations to drive more sustainable agricultural outcomes. Clean Growth Fund and Pymwymic led. More here. (U.K., Food & Agriculture)

♻️ Resynergi, based out of Rohnert Park, CA, raised $6.4M in Series B funding for its plastic recycling technology. From their website: “Our process converts non-ideal plastic waste into fresh chemicals for new plastics, keeping garbage out of our oceans and landfills.” Transitions First and Lummus Technology co-led. More here. (U.S., Industry)

🍄 Mush Foods, based out of Chicago, raised $6.2M in seed funding for its more sustainable hybrid protein blends (which combine mushroom root blends produced with mycelium production technology with ground beef and other meat). Viola Ventures led. More here. (U.S., Food & Ag)

🚢 PierSight, based out of Gujarat, India, raised $6M in seed funding for its satellite surveillance technology targeted at the maritime industry. Alpha Wave Ventures and Elevation Capital co-led. More here. (India, Transportation) 

⚡ Parallel Carbon, based out of Manchester, U.K., raised $3.6M in seed funding to build its technologies and system that integrate carbon capture with hydrogen production. Aramco Ventures led. More here. (U.K., Industry)

⚡ tibo energy, based out of Eindhoven, Netherlands, raised ~$3.3M in seed funding for its energy management software for commercial and industrial clients. SET Ventures led. More here. (Netherlands, Energy)

💳 Karma Wallet, based out of Raleigh, NC, raised $2M in equity funding and launched its ‘Karma Wallet Card,’ a debit card that offers cashback on “sustainable spending.” Tweener Fund participated. More here. (U.S., Finance)

👚 Veo, based out of Manchester, U.K., raised ~$1.8M in seed funding for its life cycle assessment technology designed for the fashion sector. Innovate UK led. More here. (U.K., Industry)

♨️ Enerdrape, based out of Vaud, Switzerland, raised ~$1.5M in seed funding for its prefabricated geothermal panel technology, which is designed to provide a more renewable heating solution for buildings. More here. (Switzerland, Built Environment)

🔌 EVify, based out of Surat, India, raised $1.3M in pre-Series A funding for its EV logistics business. GVFL and Piper Serica led. More here. (India, Transportation)

🔋 Rincell, based out of San Francisco, raised $1.2M in seed funding for its silicon-graphite and lithium manganese iron phosphate battery cell manufacturing business. Sandiip Bhammer (Green Frontier Capital and NextGen Battery Chem Ventures) led. More here. (U.S., Energy)

🌾 GeneNeer, based out of Yehud, Israel, raised $1M in seed funding for its gene editing and discovery technologies targeted at innovations in crops and agriculture. Tall Grass Ventures and 2b AHEAD Ventures led. More here. (Israel, Food & Ag)

🔌 Flexecharge, based out of Copenhagen, Denmark, raised an undisclosed amount of seed funding for its energy management and charging solutions for e-mobility applications. Greencode Ventures, Link Capital, and Vireo Ventures participated. More here. (Denmark, Transportation)

Other funding rounds

In debt funding:

💸 Brookfield Renewables, technically based out of Bermuda (lol), issued ~$300M in debt to invest in more low-carbon energy projects. Brookfield Renewables actively invests in North American energy projects, as well as other global energy projects. More here. (U.S. / Canada, Energy)

In acquisitions (and mergers):

🛢️ Chesapeake Energy, based out of Oklahoma City, and Southwestern Energy, based out of Houston, are merging via an all-stock deal that values Southwestern Energy at $7.4B. Chesapeake and Southwestern operate in the same oil basins, which could spark cost synergies. The combined company’s market capitalization will be $17B and the combined entity will be the largest producer of natural gas in the U.S. This deal follows a wave of consolidation in oil and gas in the U.S. More here. (U.S., Energy)

In grant funding:

🍄 Enifer, based out of Espoo, Finland, raised ~$13.2M in grant funding to build its first commercial-scale mycelium factory to make a “fungi-based protein with neutral taste and color.” More here. (Finland, Food & Agriculture)

New funds

💵 Venrock, a large venture capital firm based out of New York that includes several climate tech companies in its portfolio, raised $650M for its tenth fund. It will focus in part on supporting existing portfolio companies with this capital. More here (paywall). (U.S., Funds)

💰 Ben Eidelson is launching a new venture capital fund, Stepchange, based out of Seattle, to invest in software solutions that support and accelerate climate technologies. From their site: “We partner with founders at the very beginning, making $100-200K investments in the first round of funding.” Go Ben! More here. (U.S., Funds)

ELSEWHERE IN CLIMATE TECH & ENERGY

For more key headlines from the week, don’t skip the first section of this email.

📈 By the numbers: The IEA is out with new projections for renewables, forecasting that "Over the coming 5 years, several renewable energy milestones are expected..."

• 2024: Wind & solar together will generate more electricity than hydropower.

• 2025: Renewables (of all types) will surpass coal use for electricity generation.

• 2025 & 2026: Wind and solar will each surpass nuclear electricity generation, respectively.

• 2028: Renewable energy will account for 42%+ of global electricity geneneration, with wind & solar capacity (taken together) doubling from 2023 levels to 25%.

🤝 Domestic deals: Microsoft and Korea-based Hanwha Qcells inked a deal for QCells to supply Microsoft with 12 GW of domestically-made solar panels through 2032. This is one of the largest deals of its kind ever. Qcells is building a $2.5B solar panel factory in Georgia.

💵 Federal funding: The U.S. Transportation Department announced $623M in grant funding for cities and rural areas to install more EV charging ports.

The British government also announced plans to invest ~$380M to develop more technology and capacity to provide enriched uranium for next-generation nuclear reactors.

⛏️ Supply chains: China Molybdenum Company is now the world's largest cobalt producer, based on its 2023 production data (released last week). The company produced 55,526 tonnes of cobalt, an almost twofold increase over its 2022 production. Most of this increase is attributable to one mine in the Democratic Republic of Congo, where most cobalt comes from. (H/t to Teddy Feldmann on this beat; check out his excellent mining newsletter here.)

📉 Not all roses: Norway became the first country to allow for seabed mining exploration. A portion of the Norwegian Sea between Norway and Greenland is now open to commercial mining for battery materials. While helpful for supply chains, this could be massively disruptive to biodiversity and the ecosystems in and around the seafloor. Feels like a big risk, tbh.

🚫 so good news: 2023 was the hottest year on record. Temperatures rose to 1.48°C above temperature baselines from past centuries. While we're already close to crossing the 1.5°C threshold that so many people focus on, folks won't consider that threshold breached until the average temperature anomaly has held for multiple years.

Elsewhere, the SEC filed a claim for $45M in Lordstown Motors' Chapter 11 bankruptcy proceedings. This could be the most significant penalty for an EV startup since hydrogen trucking company Nikola settled for $125M in 2021 (& could put Lordstown's creditors at risk).

🌞 Closing on good news: Xcel Energy, a U.S.-based utility, is retiring one of the three coal plants at its Sherco project in Minnesota. To replace the lost generation capacity, it is building 710 MW of solar alongside additional battery energy storage to service grid reliability.

Further, a massive, new 185 MW/565 MWh battery energy storage system also began operations on Oahu to help replace lost capacity from Hawaii's last coal plant, which was retired in 2022. 

Finally, wind power generated more electricity than coal burning did in Europe in 2023.

Ciao,

– Nick