Tag: climate tech

How Bill Gates’s fellowship program is adapting to global uncertainty

Posted on by faz_business


There’s plenty of uncertainty to go around this year, including a global trade war, shifting policy priorities, and an economy that’s starting to stumble. Breakthrough Energy, a climate tech organization founded by Bill Gates, has also been shifting in response.

The group always placed long bets, though it appears to be reappraising some of them. Its policy team was scrapped in March, for example, and it didn’t continue funding a publication that covered the climate tech world. Still, its investments in startups continue, as does its longest bet, a fellowship program for budding entrepreneurs.

Breakthrough Energy Fellows, as the program is called, is announcing a new cohort today, TechCrunch exclusively learned. It consists of 45 fellows at 22 different startups, and its makeup reveals how the program is evolving both in response to its own data and to global uncertainty.

“It’s the most global [cohort] that we’ve had to date. Fifty percent of the teams are based outside of the U.S.,” Ashley Grosh, vice president at Breakthrough Energy, told TechCrunch.

Grosh and her colleagues had to sift through around 1,500 applications and referrals, making the program more selective than the world’s top universities. Eleven teams are based in the U.S., six are in Asia, and the remainder are in Canada, Germany, the U.K., and South Africa.

Part of the international focus was driven by a new hub for the fellowship program in Singapore, which the organization opened in August 2024 with Temasek, the country’s investment fund, and Enterprise Singapore, a government agency. 

But it’s also a recognition that climate change, being a global problem, will require solutions from around the world. 

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“What are local needs, right? What are the local challenges?” Grosh said. By way of example, she points to the fact that several cohort members are working on hydrogen.

In Asia, “there’s a lot of interest in the hydrogen economy,” Grosh noted. Circularity, or recycling materials back to their original form, or better, is also a priority for the region, given its role as a global factory and all the waste that entails.

The new cohort also has startups working on critical minerals, agriculture, and grid modernization.

Beyond its more global focus, the Breakthrough Energy Fellows program has also shifted its curriculum. Based on observations and feedback from previous cohorts, it is encouraging the new group to think early and often about the economics of the technology they’re developing. Using a framework called techno-economic analysis, they work with “business fellows” — often entrepreneurs with relevant experience — to determine whether and where their idea can find product-market fit. If not, they’ll be nudged to pivot.

“We were seeing a lot of companies come in thinking that they’re going to do one thing, and then they pivot,” Grosh said. “They’re more venture bankable once we’ve helped them through that pivot and validated it.”

Grosh said that nearly all of the teams from the previous four cohorts have raised follow-on funding, and one, Holocene, has already exited. “That’s a huge measure of success for us,” she said.

Hardware companies dominate a list of promising climate tech startups

Posted on by faz_business


What will it take for a startup to make a dent in climate change?

The most promising candidates tend to be hardware startups that have spent years developing and proving their technologies, according to a new report. Oh, and it helps to specialize in energy or raw materials.

The report, published by Congruent Ventures and Silicon Valley Bank, surveyed over 50 experts in academia, finance and private sector businesses to assemble a list that was then whittled down to 50 North American companies in four categories: agriculture and food, energy, buildings and mobility, and manufacturing and materials. 

The majority of the final 50 were manufacturing and materials startups (18), with energy startups not far behind (13). Agriculture and food were not well represented, despite the sector being responsible for about a third of carbon emissions, suggesting that the space still has plenty of room for new founders and investors. Nearly all of the startups focus on hardware, cutting against most generalist VC’s preference for software.

That promising climate tech startups are mostly hardware companies may not come as much of a surprise. Climate change is a real world problem. Software can only change so much about the way people interact with their physical world; if the hardware still relies on fossil fuels, then software can only nibble at the margins.

The average startup in the report is 7 years old and has raised $374 million. The latter figure is skewed by some particularly well-funded startups like Commonwealth Fusion Systems, Impossible Foods, Redwood Materials, Sila and TerraPower, which have each raised north of $1 billion. The median company is a bit different, though, having been founded six years ago and having raised $114 million.

The split between the mean and median is reflected in the fact that the majority of companies on the list sit on either side of the so-called commercialization valley of death. Early stage climate tech startups might be successful in proving their technology works, but when they move to commercialize it, the cost of a first-of-a-kind facility is often far greater than many investors are willing to stomach. In the Congruent/SVB report, 28% of companies have raised less than $50 million while the same proportion have raised over $500 million. In other words, if companies are successful in crossing the valley, investors often reward them for it.

It’s also unsurprising that the typical company on this list has been around for the better part of a decade. Early stage climate tech startups frequently have to prove the science that underpins them, a process that takes a while. After that, hardware can take years to build and refine. The end result is that climate tech startups can take longer to mature than classic software startups.

For investors who don’t specialize in climate, placing long, expensive bets on risky hardware startups can be a tough pill to swallow. But the potential upside is significant: A McKinsey partner recently noted that the market for climate tech is already $1 trillion and is expected to double every decade. As the specter of climate change looms, companies that have the best shot at reducing emissions could snag a significant portion of that market, and their investors stand to benefit.