Climate tech heats up in the Pacific Northwest as startups raise more than $ 1 billion since 2020
The Canadian company that set the country’s record for going from launch to unicorn status in the shortest possible time is not in the software. It’s not even in fintech or biotechnology. It’s in climate technology, and more specifically, it’s working to green the construction industry, reducing the carbon footprint of buildings occupied by Starbucks, Popeye’s, Marriott Courtyards and others.
Nexii, which this month announced that it had raised $ 45 million and reached a valuation of $ 1 billion, is just one of the latest examples of a climate technology company to hit the heights.
The Pacific Northwest – home to established tech heavyweights including Amazon, Microsoft and Boeing – now fosters the growth of emerging climate tech powers. Climate tech firms in Washington, Oregon and British Columbia have raised about $ 2 billion in venture capital, according to GeekWire analysis. More than half of this amount has been collected since the start of 2020.
Nexii, based in Vancouver, British Columbia, has secured total funding of $ 128 million since its launch in 2019. It has 350 employees.
“Nexii is part of this wave of change to make the [construction] industry more efficient, greener and affordable, ”said Gregor Robertson, executive vice president of strategy and partnerships. “We have to achieve all of these goals together to truly change the industry successfully.”
The construction industry is not alone in meeting this challenge. As the world strives to stem carbon emissions from all possible sources – construction, transport, electricity and agriculture included – essentially every industry will have to embrace its own “wave of change” and find ways to operate that preserve the environment. planet. Experts around the world agree that we must achieve carbon neutrality by 2050 to avoid the most cataclysmic effects of climate change.
And investors are mobilizing to support the field like never before. In the first six months of 2021, cleantech companies globally received $ 14.2 billion in capital – slightly lower than the total venture capital for all of last year, according to a PitchBook study.
The local climate technology companies that have raised the most capital since launching are:
- ESS Inc., an Oregon company that manufactures long-life iron flux batteries that went public in May through a merger with a Special Purpose Acquisition Company (SPAC); the company was valued at over $ 1 billion
- General Fusion, a BC company developing a commercial-scale fusion power plant, which has raised $ 260.7 million
- NuScale Power, a Portland, Oregon-based company that builds small modular nuclear reactors with $ 236 million from investors
- Rad Power Bikes, a Seattle-based e-bike startup that raised $ 175 million
- Svante, a British Columbia company with technology capable of capturing carbon from industrial sources, which has raised $ 150 million
GeekWire has found over 30 companies developing climate-friendly technologies that have landed venture capital.
Executives in climate technology companies say a range of factors drive success. Their innovations reduce carbon emissions, but just as important, they lower costs for their customers. Add to this consumer pressure to reduce environmental impacts and stricter climate policies.
This is just the start of the fundraising wave. Venture capitalists, private equity firms, and large corporations all raise millions or billions of dollars in climate technology funds to support businesses in space.
While the sector is experiencing tremendous growth in investment, it still represents a modest fraction of venture capital. Pitchbook reports that in the United States, climate technology represented only 2% of VC technology transactions and 7% of allocated capital.
More than a dozen other climate technology companies are being developed in the Pacific Northwest, but have not raised any venture capital dollars.
Climate technology “is very much in the mainstream, at the forefront of investor minds – sustainability investors or traditional venture capital firms,” said Bryce Smith, Founder and CEO of LevelTen Energy. “It is considered a kind of must-have space for most investors these days, which is very different from five years ago.”
LevelTen, a Seattle-based company launched in 2016 that facilitates the purchase of renewable energy, recently announced a new round of venture capital that brought its total funding to $ 62.3 million.
Part of what is striking about the region’s climate technology companies is the range of innovations being developed and commercialized. Some are based on the historical assets of the North-West, in particular aviation and maritime domains. Others come from institutions like the University of Washington, Washington State University and the Pacific Northwest National Laboratory. Some startups reflect areas of expertise on these sites, including batteries, software engineering, and agriculture.
“If there’s anything I could say about the group collectively, it’s how different and diverse the solutions people are developing,” said David Kenney, executive director of VertueLab, a non-profit organization. Portland-based profit-making organization that supports early stage climate technology startups.
Columbia Power Technologies, or C-Power, is a wave energy company spun out of Oregon State University. The company, which was formed in 2008, originally aimed to create large-scale offshore wave farms that would power the grid, a vision that has proven to be too ambitious.
Five years ago, C-Power began work on a project to generate smaller amounts of clean energy that could recharge offshore vessels, underwater vehicles and equipment.
“The ocean is a wasteland of power,” said CEO Reenst Lesemann.
C-Power therefore wants to create energy oases in the marine environment. Its new focus includes combining data servers and transmission capabilities with clean power generation. This fall, the company is deploying one of its autonomous offshore power systems for sea trials at a US Navy test site in Hawaii. Lesemann is also trying to raise venture capital (C-Power has raised $ 10.2 million in the past, plus $ 30 million in grants from federal agencies). The company takes its first orders from commercial customers.
“The pipeline is definitely starting to fill up,” Lesemann said. “It’s the confluence of decarbonization and having a value proposition to reduce operational costs. “
David Grest, Managing Director of Seattle-based SJF Ventures, has been investing in impact-driven businesses for more than two decades. He sees a lot of companies in the climate technology arena with solid business models and a solid economy – companies like C-Power, LevelTen, and Nexii who find a confluence between financial success and decarbonization.
Among local businesses, SJF Ventures has invested in Novinium, a Kent, Wash., Based company that revives underground cables and reports that it has saved 660,000 tonnes of carbon emissions. The innovation Griest sees in climate technology companies makes him optimistic for the future of the planet.
“I’m falling on the optimistic side,” Griest said. “I continue to be inspired every day. That’s what turns me on, just seeing what emerges and all these great new ideas. Entrepreneurs continue to inspire us.