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BP and Shell-backed accelerator looks for the Teslas of climate tech

Climate tech needs to create "two or three Teslas every year" to make a difference.

By Freya Pratty

Ten corporations, including BP, Shell and Microsoft, are setting up a climate tech accelerator to channel more funding to sustainability startups, which often struggle to raise investment.

According to Jon Creyts from the Rocky Mountain Institute, the US-based environmentalist think-tank that will lead the accelerator, investors are so put off funding climate change tech that there’s only been one hard tech company in the last decade to secure enough funding to be successful.

“There has only really been one — Tesla,” Cretys says. “But we will need two to three Teslas every year for the next decade to address climate change.”

The time wasted waiting for climate tech to secure funding is something we can’t afford, he says.

“We can’t wait for some massive government stimulus or the odd Innovator who already had a load of cash from his internet startup. Those aren’t odds we can bet the planet on.”

To try and fill the gap, Third Derivative, in conjunction with the Rocky Mountain Institute, is developing a new fund for climate tech.

The institute has gathered together the money of 10 corporate partners, including BP, Shell and Microsoft — with a combined market cap of $3tn — as well as VCs from around the world with combined funds of $2bn, to fund 47 climate tech startups from around the world.

The initial investments will be small — each startup will receive $100,000 -150,000 from the fund. But there is  $880m available for follow on investments.

These larger sums will be needed if the accelerator is serious about creating a climate tech Tesla. Part of what helped keep Tesla afloat in its early days was a substantial investment from Daimler and a $465m loan from the US government.

The “death valleys” of climate tech

The money is designed to help climate tech startups get over the various hurdles that often stop them bringing tech to market.

“Startups hoping to transform our energy future face enormous challenges. Many succumb to a gauntlet of multiple valleys of death,” says Bryan Guido Hassin, CEO of Third Derivative.

Startups working on climate tech have more significant capital needs than software startups, as well as longer paths to market, meaning they can be less favoured by investors.

As well as this, climate tech startups often have to rely on slow-moving, risk-averse corporations as customers and navigate regulatory and policy landscapes that favour incumbents and challenge disruptors.

The solution

Third Derivative’s aim is to help startups overcome these problems through a combination of the funding and expert guidance on how to hone and scale the solutions — hoping to bring solutions to market in half the traditional time.

For David Hayes, chief investment officer from BP Ventures, initiatives like Third Derivative’s are critical to helping build climate tech.

“Initiatives like Third Derivative are important, in my view,” he said, “to help speed up the transition to a cleaner more sustainable energy future by enabling collaboration between companies and across industries to accelerate innovation and to help scale low-carbon energy and climate solutions.”

However, the participation of multinational oil and gas companies in funding young climate tech startups could feed into accusations of the company’s looking to ‘greenwash’ their public image and move attention away from their own emissions.

The startups

The startups cover a range of solutions aimed at reducing the effects of climate change, or reducing greenhouse gas emissions. There are startups focused on carbon capture, renewable energy, lower-emission transportation and cleaner batteries.

The startups come from 11 different countries, and five of them are from Europe. These are:

Mootral

Swiss agritech Mootral creates feed supplements for cattle and other farm animals, aimed at reducing the methane they produce.

The supplement is based on compounds from garlic and flavonoids derived from citrus. The company’s research suggests that feeding it to animals could reduce methane emissions on farms by 38%.

Mission Zero Technologies

UK-based startup Mission Zero creates direct air capture technology to remove CO2‎ from the atmosphere. It’s aim is to produce the tech in a way that’s affordable at scale.

OneWatt Solutions 

Dutch startup OneWatt Solutions uses artificial intelligence to predict when industrial technology will need maintenance, thereby aiming to save the energy and money needed to fix faults in machinery when they’re allowed to become more serious.

Energy Dome 

Energy Dome, based in Italy, is developing renewable energy through a thermodynamic transformation method – manipulating CO2 between its gaseous and liquid phase and storing the energy produced.

Betteries

German startup Betteries provides mobile, modular, and multipurpose power systems based on upcycling EV batteries to enable the transition to renewables.

 

Freya Pratty covers news at Sifted. She tweets from @FPratty

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