Fusion frenzy & Trump's tariffs

Hi,

It’s snowing in Brooklyn as I write this and investors rained serious Series F funding on Helion, one of the front-runners to commercialize nuclear fusion energy this week. All that even as Deep Seek, which I covered on Thursday, kicked off the week by potentially 'deep sixing' a year's worth of hand-wringing about the AI-energy demand growth story. And then there’s the tariffs… Might as well get into it.

In today’s newsletter:

• One story in a sentence (and a chart)

• Climate tech and energy headlines from the week

• Climate tech fundraising announcements

♡ If you find this work valuable, you can support it here. I put a lot of time into it. ♡

THIS WEEK IN CLIMATE TECH & ENERGY

One story in a sentence (and a chart)

• Nat Bullard’s annual slide deck on energy transition trends is out. All 200 slides are highly worth a flip through, and it’d be impossible to pick a favorite, but as a semi-positive headline, I’ll give you this one, namely that ‘energy transition’ funding is rising and eclipsed $2 trillion in 2024 for the first time. Link.

15+ headlines

The good

• Also in Nat Bullard’s deck was a visualization that suggests oil demand in China may be in the process of peaking (coal or natural gas demand has not yet). Remember, EVs or plug-in electric hybrids now command more than 50% of new light-duty vehicle sales in China. Chinese press also predicts up to 20,000 gas stations could close this year due to falling demand. Link. Link. Link.

• Global solar and battery energy storage deployments also hit new records in 2024 (both charts also from Nat Bullard’s presentation. Solar posted a ~33% year-on-year increase whereas BESS grew closer to ~75%, albeit on a much lower denominator. Surprisngly to me, even wind grew globally (probably mostly in China), though not by as much as needed. In the U.S., solar and storage will likely claim the vast majority of capacity additions in 2025, as they did in 2024. Link. Link.

• Despite its overall business not growing as fast as investors and analysts would like, Tesla Megapack and Powerwall battery storage deployments jumped to 31.4 GWh last year, up from 14.7 GWh in 2023. I visualized quarterly sales growth for Tesla’s BESS products below, which reflect strong demand across both residential and utility-scale. Feel free to use my little data viz wherever you like. The company also announced it will build its third “megafactory” (it has one in Shanghai and one in California) Link. Link.

• Alongside dramatic cost reductions in batteries in general (some of which owes to oversupply), EV chargers are also declining in cost significantly. Link.

• Waymo is now testing its autonomous electric robotaxis in Los Angeles. Mind you, Waymo already does more than 100,000 rides in San Francisco per week. All well before any of Tesla’s robotaxis plans have materialized, mind you, though those may well be coming. Link. Link.

• Boom Supersonic’s XB-1 became the first civil aircraft to go supersonic (breaking the sound barrier) on Tuesday over the Mojave Desert in California. Supersonic flight wouldn’t necessarily just make flight faster; it could reduce its greenhouse gas emissions impact. Link. (Full disclosure: One of my employers, Climate Capital, is investing here.)

• Norway’s sovereign wealth fund, originally based on oil and gas and mineral profits, is now the world’s largest fund and is widely diversified beyond fossil fuels and extractive industries, setting a sound example of what oil-rich countries can do to help their own countries and the world transition. Link.

• The Indian state of Maharashtra may become the next jurisdiction to set a target date to ban sales of or even use of petrol and diesel vehicles, specifically in Mumbai city, to combat air quality issues. Some gas vehicles would still be allowed to drive in the city provided they meet certain specs. Link.

• GM also (surprisingly) approached ‘some’ proximity to profitability in its EV segment for the first time. Link.

• YardStick PBC, a company I follow closely, was published in Science Direct, exhibiting evidence that its soil measurement technologies are meaningfully more accurate and efficient at measuring soil carbon sequestration levels. Link.

• Electric Era, a business I first wrote about 18 months ago, launched the first NEVI-funded fast-charging EV station (Level 3) in New Mexico with SkyCharger and plans to launch 18 more sites with SKycharger alone this year. Link. (Full disclosure: one of my employers, Climate Capital, is invested here, and I also do contract work for the biz).

• Syzygy Plasmonics and Lotte Chemical commissioned and completed performance testing on the world's largest all-electric ammonia cracking system in Ulsan, South Korea. Ammonia “cracking” is valuable because ammonia (NH3) is a more efficient way to transport hydrogen if you can electrically and economically split off the “N”. Link.

The inbetweens

• One of the biggest stories of the week surrounded Deep Seek, a two-year-old Chinese startup that released a ChatGPT competitor that is impressive across a variety of dimensions, purportedly cost drastically less to train, and is dramatically more efficient than its Western competitors’ models and systems are. This would dramatically impact all those AI-demand growth stories everyone was obsessed with in 2024. I wrote about the more recent news and also pre-empted this story two months ago in this piece. But if you’re curious for more content, here are some more good reads: Link. Link. Link. Link. Link. Link. Plus, here’s a good quote from Jeff Davies, who writes here and knows energy markets 1000x better than I do:

• Deep Seek aside, for now, The Federal government plans to spend $500 billion developing energy and other physical infrastructure for data centers and AI. While some of the power will be provided by solar and batteries, it also includes an application for a 360 MW onsite natural gas plant (not massive, but substantial). The owner of that project component is reportedly data center energy startup Crusoe, a cimI like and wrote about as early as 2021. Ideally, the gas is mostly for backup purposes here. GE Vernova also noted it sees very robust demand for its natural gas turbines at the moment, so much so that it plants to pour $600 more into U.S. manufacturing expansion. Link. Link. Link.

• For more on the $2 trillion figure cited with respect to “energy transition” investment, it’s worth noting that China accounts for about two-thirds of the increase between 2023 and 2024, in keeping with what I penned on Thursday. As to whether that’s a good one, well, it depends on who’s askin’. Link. Link.

A massive, nearly $10 billion and 6 GW hydroelectric plant in Tanzania is nearing completion, though not without its share of controversy (including on the environmental front). The project is part of the ‘Sustainable Africa Scenario’ plan, which could see electricity sector investment increase fourfold from $30 billion to $120 billion by 2030 (we’ll see, I don’t put much stock in these forecasts in many). Link.

• Microsoft announced it will purchase 7 million tons of carbon credits from Chestnut Carbon in a 25-year deal to catalyze reforestation across 60,000 acres in Arkansas, Louisiana, and Texas. Link. Note: I only put this in the ‘inbetweens’ section because currently, there’s basically only one large-scale carbon removal buyer (Microsoft), even though there are now more than 500 carbon removal companies (per Nat Bullard, again):

The bad

• There’s far too much happening at the Federal policy level for me to distill here—as discussed in my piece here—that’s also an intentional strategy to flood all our newsfeeds with so much information, some of which is critical and terrible and some of which is pure distraction, to render focused action nigh-impossible. Here are at least a few things I’m tracking, though: Montana Renewables, which had previously been granted funding from the Department of Energy’s Loans Program Office to build e-fuels plants in Montana, received notice the (new) DOE will impose a “tactical delay to confirm alignment with White House priorities." on the $782 million loan guarantee. Here we go… Link.

• There’s plenty of other great coverage on related topics you can read here and here.

• Perhaps mostly importantly right now, Trump signed orders on Saturday night placing 25% tariffs on all goods imported from Canada and Mexico plus a lower, 10% tariff on Canadian oil, natural gas, uranium, and other energy sources. These could be dramatically impactful as Canada and Mexico are 2/5 of the countries the U.S. imports the most from.

These tariffs are also highly material to energy dynamics; while the U.S. is the world’s largest oil and gas producer, we do import a lot of oil from Canada. Because, well, even though oil is often seen as a ‘commodity,’ it actually comes in many ‘flavors,’ if you will. Some is light and sweet. Some is heavy and sour. The different ‘flavors’ lend themselves readily to different applications, as Robinson Meyer laid out well here. More links here and here.

Ideally, the President is trying to win some quick concessions here, but who the hell knows? Permanent tariffs at this level on our ostensible allies and neighbors would seriously bite. Basically the opposite of an Inflation Reduction Act.

• It’s not just the U.S.: Across the world, tariffs, while occasionally helpful to nurture domestic industries, impact the energy transition in countless ways. For instance, some Chinese EV exports to Europe are slowing after the EU hiked tariffs on them last year. Link.

• Nor are things going fantastically even in countries that otherwise exemplify the energy transition; in Norway, where almost all new car sales are electric (there was a month in 2024 where <50 new car sales were gas cars), the current government is collapsing. Link.

• Ÿnsect, an insect protein startup that raised almost $600 million over the years is in deep trouble and is looking for a buyer of really any path to survival. Link.

• Deep Seek aside again, oil majors are still capitalizing on the AI-energy demand growth story to build out more natural gas infrastructure (which has a long life and is unlikely to be deprecated earlier. On Wednesday, Chevron and Engine No. 1 announced a partnership to build up to 4 GW of data center capacity (that’s a lot!) powered by natural gas. In an ideal world, we’d be building more clean energy to meet data center demand, not energy that produces greenhouse gas emissions, as burning natural gas does. Link.

• California’s Public Utilities Commission voted on Thursday to allow So California Edison to raise electric rates on customers to help cover payments it owes to victims of the devastating 2017 Thomas wildfire, which Edison, the utility, played its own role in starting. I’m far from the first to yell “BIG BAD UTILITY,” but at a glance, there’s something, shall we say, ‘askew,’ when the utility recoups $1.6+ billion of the $2.7 billion it owes to 5,000+ fire victims from the rest of its customer base (and the remainder from its shareholders)… Link.

• As much as I’m a battery energy storage system (BESS) booster, two recent fires have highlighted that lithium-ion batteries do inherently introduce fire and explosion risks. And when big facilities burn, it’s really bad, whether for grids, the local environment, the energy transition, or whatever dimension you choose to focus on. Link. Link. Link.

• Volkswagen postponed the release of its ID.7 electric sedan in the U.S. More than that, actually: It canceled its plans to sell the model in North America altogether. Link.

• Last but not least, in an effort not to focus exclusively on the West, there’s deep instability politically percolating in the Democratic Republic of Congo, where 70% of the world’s cobalt comes from (which is used in many lithium-ion batteries). Worth keeping an eye on, as the conflicts are inherently and at least at some level driven by disputes about the cobalt reserves and ‘qui bono’ from cobalt mining. Link.

CURATED DEALS

Larger funding rounds

• Helion Energy, based out of Seattle, WA, raised $425 million in Series F funding at a valuation north of $5.2 billion for its fusion energy startup focused on a magnetic confinement approach. Lightspeed Venture Partners and the SoftBank Vision Fund joined existing investors in the round. The company has now raised over $1 billion. Its “Polaris fusion system” is expected (by some) to generate more electricity than it consumes as soon as this year. I’d be surprised (but happily so) if they hit that target. Link

• Veir, based out of Woburn, MA, raised $75 million in Series B funding to make superconductors that can replace traditional transmission power lines. Munich Re Ventures led. Link.

• Smart Wires, based out of Durham, NC, raised $65 million in equity funding for its grid-enhancing, maintenance and analytics technologies that help utilities manage capacity and load issues. BP Energy Partners and Keystone Group led. Link.

Medium-sized funding rounds

• UVeye, based out of Teaneck, NJ, raised $41 million in equity funding + $150 million in debt funding for its automated vehicle inspection systems that use AI to detect mechanical issues and anomalies across a variety of vehicle types. Woven Capital (Toyota) led the equity funding while the debt was structured by Trinity Capital. Link.

• Recycle Track Systems, based out of NYC, raised more than $40 million in funding (not sure exactly of what nature, though I presume growth equity) for its “traceability solutions for the waste and recycling industry.” Edison Partners led. Link.

• Mangrove Lithium, based out of Delta, Canada, raised $35 million in equity financing to refine raw materials into lithium compounds for batteries and build its first refining plant in Delta, British Columbia. Mitsubishi Corp, Asahi Kasei, Breakthrough Energy Ventures, BMW i Ventures, and others invested. Link.

• Stratus, based out of Larkspur, CO, raised $32 million in Series B funding for its “cloud-based software platform” designed to optimize mechanical, electrical, and plumbing (MEP) fabrication and construction management by integrating CAD software with to “reduce errors and boost efficiency.” Radian Capital invested. Link.

• Urban Sky, based out of Denver, CO, raised $30 million in equity funding to make “autonomous stratospheric balloons” that have earth observation imagery, weather data, and defense applications. Lavrock Ventures led. Link.

• Meteomatics, based out of St. Gallen, Switzerland, raised ~$22 million in Series C funding for its ultra-high resolution computer model to help companies and society in general anticipate and withstand extreme weather events. Amira Growth led. Link.

• Earth AI, based out of San Mateo, CA, raised $20 million in Series B funding for its mining exploration startup that focuses on discovering new mineral and metal deposits with software to locate them and the drilling tech to confirm findings. Tamarack Global and Cantos Ventures led. Link.

• iPronics, based out of Valencia, Spain, raised ~$20.8 million in Series A funding to make optical switches that use light to connect computer systems, ideally improving data center speed and energy efficiency. Triatomic Capital led. Link.

• Keey Aerogel, based out of Habsheim, France, raised ~$18.8 million in Series A funding to make green aerogel from construction waste. Bpifrance and Wind led. Link.

• Oxyle, based out of Zurich, Switzerland, raised $15.7 million in seed funding to develop technology to remove pollutants, like PFAS, from wastewater. 360 Capital led. Link.

• Bonsai Robotics, based out of San Jose, CA, raised $15 million in Series A funding to make autonomous robots that help harvest tree crops like almonds and walnuts. Bison Ventures led. Link.

• Omnitron Sensors, based out of Los Angeles, raised $13+ million in Series A funding to develop microelectromechanical systems sensors for use in autonomous vehicles and data centers. Corriente Advisors led. Link.

• Ocell, based out of Munich, Germany, raised ~$10.4 million in Series A funding to develop digital twins to advance forestry management. Capnamic led. Link.

• WeaveGrid, based out of San Francisco, raised an undisclosed amount of funding from Hyundai Motor and Kia for its software that optimizes EV charging, among other things. This follows a $28 million raise from Woven Capital (Toyota). Link.

Smaller funding rounds

• Le Fourgon, based out of Marquette-lez-Lille, France, raised ~$8.5 million in Series A funding for its reusable glass deposit system it operates across France to reduce plastic waste. Existing investors like ID4 Ventures led. Link.

• Niko, based out of Mexico City, raised $8 million in equity funding for its residential solar installation business and to build Mexico’s first virtual power plant that will aggregate solar and battery energy storage systems to feed power back to the grid and provide ancillary grid services (via the batteries, solar and wind can’t do that). QED Investors led. Link.

• Sightline, based out of London, raised $5.5 million in seed funding for its data and market intelligence platform designed to bring “clarity to the new climate economy” (to use their words directly instead of mine. The Westly Group and Molten Ventures co-led. Link

• Voltiris, based out of Lausanne, Switzerland, raised ~$5.2 million in seed funding to optimize solar energy usage for greenhouses. EquityPitcher Ventures and 3M Ventures led. Link.

• Avisomo, based out of Gardermoen, Norway, raised ~$5.2 million in grant and equity funding from Innovation Norway and insiders for its “no-hands” automated vertical farming technologies. Link.

• Rynse, based out of Los Angeles, raised $5 million in equity funding for its fleet management platform that connects fleet operators to service providers like maintenance shops and fueling stations. Autotech Ventures led. Link.

• Laiier, based out of London, raised $4 million in extended seed funding for its liquid leak detection service for commercial and industrial buildings. Closed Loop Partners led. Link.

• Nala Earth, based out of Berlin, raised ~$3.9 million in equity funding for its corporate nature and biodiversity management and compliance software. IRIS led. Link. 

• OneThird, out of Enschede, Netherlands, raised ~$3.6 million in Series A funding to build AI / infrared technology designed to help farmers, distributors, and retailers reduce food waste by more accurately predicting produce shelf life. Invest International led. Link..

• Gridio, based out of Tallinn, Estonia, raised ~$2.5 million in seed funding for its software platform for “smarter” EV charging. Neoinvesteeringud led. Link.

• Hybrid Energy, a Danish startup, raised ~$2.5 million in equity funding for its software that monitors electrical panel electricity usage to help businesses with energy efficiency. BackingMinds and Transition VC co-led. Link.

• Agurotech, based out of Amsterdam, raised ~$2.4 million in equity funding for its hardware and software products, like sensing technology, weather systems, and software that offer farmers more precise data across metrics like soil health. Navus Ventures led. Link.

• Gryd Energy, based out of London, raised ~$1.25 million in pre-seed funding that offers a subscription service for homeowners to adopt solar panels and battery systems with no upfront cost. Black Seed VC and Oasthouse Ventures led. Link.

• Visibuilt, based out of TK, raised ~$1.1 million in pre-seed funding for its visiBIT technology, purportedly “disrupt the asphalt industry with visiBIT, the world’s first fermentation-based binder for pavements” to make asphalt (typically petroleum based [yes, the very roads you drive on are also made out of “gas,” effectively]) more sustainably. A consortium of angel investors led. Link.

• Pleevi, based out of Brussels, Belgium, raised ~$1 million in equity funding for its AI-enabled EV charging technology designed to optimize things like energy management. Angelwise, Seeder Fund, Noshaq Energy, and QBIC invested. Link.

• Adsorbi, based out of Gothenburg, Sweden, raised ~$1 million in equity funding to make bio-based material that removes air pollutants and odor from ambient air. Metsä Spring led. Vinnova, Sweden’s Innovation Agency, also added grant funding. Link.

Other funding rounds

• Encore Renewable Energy, based out of Burlington, VT, raised $389 million in financing (a mix of financing facilities, construction-to-term debt, a tax equity bridge, and a preferred equity facility for tax equity) from Brookfield to build commercial social and battery energy storage projects. Link.

• INERATEC, based out of Karlsruhe, Germany (close to where my Grandma lives!), raised ~$72.8 million in debt and grant funding to make e-fuels. It plans to use the funding to build Europe’s first large e-fuels plant. The European Investment Bank led the debt funding, while Breakthrough Energy Catalyst structured conditional grant funding. Link.

• Liberation Labs, based out of Richmond, IN, raised $31.5 million in convertible note funding and $19 million in “bridge note” funding from existing investors to build its first biomanufacturing / precision fermentation plant. NEOM Investment Fund, Galloway Limited, Meach Cove Capital, and others invested. Link.

• Samotics, based out of Leiden, Netherlands, raised ~$20.7 million in debt funding from the European Investment Bank for its electrical data analytics technologies for water utilities and sewage infrastructure. Link.

New funds

• Shift4Good, based out of France and Singapore, raised ~$228 million in a debut venture fund focused on sustainable transportation. Renault Group, BNP Paribas Group, EIF, and others invested. Link.

• Algebris Investments, based out of London, held a first close for its first climate tech venture capital fund to the tune of $62 million. Link.

• Lever VC, based out of New York City, held a first close of its second fund focused on early-stage agrifoodtech startups to the tune of $50 million. Link.

Bye for now,

– Nick