Blackrock goes big on climate with Temasek #52

Happy Monday!

A lot of announcements (commitments, new funds) are being made ahead of Earth Day and Biden’s Climate Summit, making this week one to watch for climate happenings:

Our predictions - what we’re hopeful for:

• More major corporates (e.g. Facebook?) dipping their toes into carbon removal funds
• More “energy transition” commitments from O&G majors (to keep big investors happy)
• Biden to push up US’s commitment to 50% emissions reduction by 2030
• A sweeping order mandating climate related risk disclosures

What do you expect to hear on Earth Day (Thursday)? We’re keen to hear your predictions.

Tell us your prediction

As a reminder, this week’s feature is dropping later this week (for an Earth Day surprise!) with Reilly Brennan from Trucks, who takes us on a ride of investing in mobility, logistics, and vehicles - among other transportation pun jokes.

We’ve got tons of deals this week, including Hazel’s produce shelf extension, Persefoni’s carbon accounting, and Carbo Culture’s biochar-based carbon removal.

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Blackrock and Temasek team up for decarbonization

In his January 2021 shareholder letter, Blackrock CEO Larry Fink wrote “no issue ranks higher than climate change on our clients’ list of priorities.” In a striking shift from Blackrock’s poor record on pro-climate shareholder support, the world’s largest asset management firm is finally putting money behind its mouth. BlackRock is teaming up with Temasek to establish a net zero investment partnership called Decarbonization Partners. The two financial heavy-hitters will contribute a combined $600m with third-party investors topping up to reach their $1B target. The partnership will launch a series of late-stage venture capital and early growth-stage private equity funds focused on advancing decarbonization solutions to reach a net-zero economy by 2050. In particular, their funds target "proven, next-generation renewable and mobility technology" as well as tech that helps decarbonize buildings and manufacturing.

🎉 Blackrock is on a climate roll. After last year’s dismal performance on climate shareholder resolutions, Blackrock seems to finally be following through on its CEO’s call for climate leadership. Three weeks ago, Blackrock hired Paul Bodnar, the former Chief Strategy Officer at the Rocky Mountain Institute, as the head of sustainable investing. Two weeks ago, Blackrock announced it closed $4.8B for its third Global Renewable Power fund investing in climate infrastructure assets. Last week, the firm launched a new green ETF – the Carbon Transition Readiness ETF (NYSE: LCTU), luring more than $1B in assets on its first day from CalSTRS, Temasek, and other big institutional investors. And now, the money manager is rounding out its climate agenda with this decarbonization fund.

🌎 A global partnership spanning East and West. US-based BlackRock is the largest asset manager worldwide with $9T in AUM and Singapore-based Temasek is a leading investment company in Asia with $200B in AUM. Their regionally distinctive partnership not only indicates global investor interest in climate tech but also allows for more opportunity to capture climate demand in both sides of the world.

☀️ Signaling for investor demand. With earlier funds having de-risked and demonstrated returns in climate tech, large institutional investors like BlackRock and Temasek are now stepping in and signaling investor demand for decarbonization technologies at scale. We expect this will be the first of many BlackrockxTemasek announcements, with the expectation already set to eventually “manage billions across multiple funds” in climate tech.

🌊 The climate money keeps flowing. Decarbonization Partner’s $1B fund is part of a broader wave of capital (venture equity, project finance, and debt) flowing into funding climate tech. In the last three weeks, we’ve tracked ~$1.7B in newly announced funds targeting climate-related assets (not even counting Blackrock’s $4.8B renewables fund). Capital tends to compound, and we’ll likely see the genesis of many more climate tech funds catalyzed by Blackrock and Temasek’s involvement.

⚖️ Beware the supply-demand imbalance. While the pool of climate capital is starting to overflow, the number of companies that currently fit the bill for late-stage venture to growth-stage private equity is still quite small. It takes years to build a Series B+ company, and only months to raise the capital to fund multiple startups. Not to mention that many climate-related names that are moving toward later letters in the Series alphabet have been already heavily targeted by the SPAC market.

Deals of the Week (4/12-4/18)

🚗 Polestar, a Sweden-based EV company owned by Volvo, raised $550m in its first external round from Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding, and Zibo Hightech Industrial Investment.

🍎 Hazel Technologies, a Chicago, IL-based agtech company focused on food waste, raised $70m in Series C funding from Pontifax AgTech, Temasek, S2G Ventures, Pangaea Ventures, Rhapsody Ventures, and others.

🥩 Atlast Food Co. a Green Island, NY-based producer of plant-based meats, raised $40m in Series A funding from Viking Global Investors, 40 North, Stray Dog Capital, and Footprint Coalition Ventures.

🏠 dcbel, a Canada-based producer of smart home energy appliances, raised $40m in funding from Coatue, Real Ventures, WTI, and Narrative Fund.

🔋 Battery Resourcers, a Worcester, MA-based recycler of lithium-ion batteries, raised$20m in Series B funding from Orbia Ventures, At One Ventures, TDK Ventures, and InMotion Ventures.

🛥️ X Shore, a Sweden-based electric boat maker, raised $18m in Series A funding from Team Europe.

🍎 Mori, a Boston, MA-based food tech company focused on reducing waste, raised $16m in Series B funding from Drawdown Fund, Acre Venture Partners, The Engine, Prelude Ventures, Refactor Capital, and Closed Loop Partners.

💨 Persefoni, a Tempe, AZ-based carbon accounting and management platform, raised $9.7m in Series A funding from Rice Investment Group, NGP ETP and Sallyport Investments.

⚡ Standard Energy, a South Korea-based developer of vanadium ion batteries, raised $8.9m in Series C funding from SoftBank Ventures Asia.

💵 Clim8 Invest, a UK-based an investing app focused on combating climate change, raised $8m in Seed funding from 7pc Ventures and British Business Bank Future Fund.

💨 Carbo Culture, a Finland-based biochar-based carbon removal startup, raised $6.2m in Seed funding from True Ventures, Cherry Ventures, and Übermorgen Ventures.

⚡ SHYFT Power Solutions, a Nigeria-based maker of software optimizing energy resources in emerging markets, raised $3.1m in Seed funding from SoftBank Vision Fund’s Emerge Program, Total Carbon Neutrality Ventures, Samurai Ventures, and Urban Us.

💵  EcoCart, a San Francisco, CA-based e-commerce enablement startup offering carbon offsets, raised $3m in Seed funding from Base10 Partners, Sugar Capital, and angel investors.

Later-Stage Fundings / New Funds:

Energy Transition Ventures closed a $75m fund, making it the first VC in Texas dedicated to investing in energy transition technologies.

Pale Blue Dot, an early-stage venture firm focusing on climate tech primarily in Europe, raised an additional $40.7m in new capital commitments for its debut $100m fund.

Finistere and New Zealand Growth Partners launched a $28.6m new agrifund.

In the News

JPMorgan and Citigroup have set goals to direct $2.5T and $1T respectively to “initiatives that combat climate change and advance sustainable development” over the next 10 years. TBD on what these initiatives entail but the big “T” is undoubtedly headline-grabbing.

New Zealand will become the world’s first country to introduce legislation requiring all financial firms to disclose the climate impact of not only their own investments but also the companies that they lend money to.

The radically transparent hedge fund, Bridgewater, has launched a Sustainable Investing venture and appointed key investing talent to the group, including the head of its’ China initiatives.

Apple puts down roots with a reforestation-focused carbon removal fund. The $200m Restore Fund also “generates a financial return for investors”; meanwhile there’s still more to iron out with NBS verification, measurement, and reporting.

On the heels of CDP and Breakthrough’s carbon accounting announcement, Columbia SIPA announced a new project led by Dr. Julio Friedmann to study measurement and accounting methodologies for early stage GHG-reducing technologies.

Taking parallel approaches, the US Department of Energy announced two multi-million programs funding innovation to decarbonize “hard to electrify transportation” segments - $61m for biofuels to power aviation and shipping, and $162m for electrifying medium and heavy-duty vehicles.

LG Chem and SK innovation are battling for battery market share in the US. The pending US trade dispute between the two South Korean battery manufacturers was resolved - saving SK’s $2.6B battery plant and 2,600 jobs in Georgia. Meanwhile, LG just announced its second $2B battery facility for GM’s 30 upcoming EV models in Tennessee.

California’s fire season already looks bleak. The state’s forests are recording historically low fuel moisture content, a measure of vegetation dryness. Gov. Newsom proactively signed a $536m wildfire package to invest in resilience.

All eyes on Rep. Sean Casten’s Twitter for more details on the Climate Risk Disclosure Act.

Pop-up

It sounds like a Bond plot for saving climate. The price of admission? $3m. A climate superyacht that runs on m-MSR nuclear power is being dubbed the “Olympic torch” of global science. Launching in 2025, the Earth 300 will stow 160 scientists, 20 students, and 40 (uber) wealthy eco-tourists. Just in time for Bezos’s first Chairman vacation.

Speak of the devil - Jeff Bezos’ last Amazon shareholder letter as CEO features Pachama, Redwood, Turntide and other climate investments.

Glacial surges caught on camera: The Muldrow Glacier in Alaska speeds at 100x its usual pace.

An exceptionally clairvoyant conversation between Ezra Klein and Brian Deese on climate’s omnipresence within the Administration as a political problem (not an economic one).

A haunting video from behind the scenes of TIME’s “Climate is Everything” cover.

Just in time for Earth Day, a time lapse feature from Google Earth that visualizes climate change’s impact on our planet over the past 37 years.

A Twitter thread of landmines from Adam McNamara on retrofitting a new build home to net-zero. We’re now considering our own decarbonization crusade, primarily to buy a 48” induction AGA range!

Opportunities & Events:

💡 URBAN-X Cohort 10 Accelerator: Apply by April 30th to be considered for the URBAN-X accelerator’s 10th cohort. Bonus: they just moved into Newlab’s cool Brooklyn digs!

🗓️ Carbon to Value Kickoff: Tune in to the C2V Initiative between Urban Future Lab, Greentown Labs, and Fraunhofer on May 6th as they announce their first cohort of carbontech startups.

🗓️ Elemental Excelerator Interactive 2021: Don’t miss the interactive virtual climate summit from May 19-21 that converges technology, policy, markets, and community innovation through film, deep conversation, and inspired action.

Jobs

Associate @MUUS

Associate @G2VP

Investment Associate @Modern Energy

Mechanical Engineer @Symbrosia

Multiple engineering roles @Parallel Systems

Director of Facilities and Equipment @Antora Energy

Operations Manager @Heirloom

Technical Program Manager @Climate Neutral

New Projects Development Associate @Incite.org

Programs and Development Associate @Keeling Curve Prize

Business Development Manager @Resonant Link

Feel free to send us new ideas, recent fundings, or general curiosities. Have a great week ahead!