When it comes to save the planet, Raj Kapoor, The former chief strategy officer and CEO of Lyft doesn’t think asking consumers (or the government) to change their habits is an effective strategy. Instead, he and Josh Felser, the co-founder of Freestyle Capital and a serial entrepreneur, are betting that the future of climate technology begins in the business.
“What we are seeing is that the company is completely changing its behavior,” said Kapoor. “By the end of 2021, the Fortune 500 will all have shared sustainability goals publicly and 65% of global GDP is committed to net zero carbon emissions by 2050.” Amazon, for example, is striving to have zero-carbon operations by 2040 – and recently plunged back into its $ 2 billion climate fund to support the startup of fast-charging technology for electric vehicles.
To capitalize on the awareness, Kapoor and Felser spent the last year working on Climactic, a early-stage venture capital firm that wants to explicitly invest in startups working to correct the climate from a business perspective. ‘business. Investors have backed eleven companies to date, cutting $ 50,000 to $ 100,000 using personal money. They declined to comment on any fundraising plan, but at this point Climactic has not filed any documents with the SEC indicating its intention to raise a formal investment vehicle.
Climactic’s main thesis is to help companies achieve their net zero emissions goals, followed by an interest in supporting new consumer products that won’t sacrifice value in the pursuit of being better for the planet. Felser said they are looking for startups that help businesses because they become a “captive base of customers who have all publicly raised their hands and asked for help with the innovative technologies they need to achieve their public goals.” .
Clean Tech 1.0 was more about scientific innovation, led by scientists and academics, while Clean Tech 2.0, which is happening right now, is about entrepreneurs creating vehicles or software ready to go to market sooner, Kapoor said. . The change means Climactic stays busy, investing in everything from technology in the hope of measuring and analyzing carbon emissions, to software that leads to a more efficient supply chain, and mobility technologies to transportation. and the goods.
“Just because it’s hard to quantify the impact of software on the planet doesn’t mean we shouldn’t fund it,” he said. “We can fix this problem, and the software will help in this battle.”
Kapoor, who was also chief executive of Mayfield, left Lyft in April 2021 after the transportation giant sold its autonomous vehicle unit to Toyota’s subsidiary Woven Planet Holdings for $ 550 million. Felser, meanwhile, launched a #climate app that aggregates climate change actions from leading nonprofits and matches them with social media influencers before eventually co-founding Freestyle Capital. The entrepreneurs ultimately teamed up through two catalysts: the dying planet and the realization that nonprofits weren’t going to change the planet, so there had to be a sustainable, for-profit solution.
Context in mind, Kapoor admitted that the climate knowledge specific to Climactic’s expertise is “light” compared to “OG climate investors”.
This is good news, as Felser said entrepreneurs are largely asking Climactic for help with the company’s sales, marketing and pricing; no detailed explanations on the limits of the marketing of cellular meat. The company employed a number of consultants who were former sales and marketing managers at other companies, which led to cross-pollination between scientists in charge of the breakthrough technology and people less in the know. weeds (and therefore better equipped to help market to the general public).
“Were [bringing] knowledge of sales, corporate sales and marketing, product expertise and general CEO coaching, ”said Kapoor. “And that’s what the climate business community is missing.”
Climactic is emerging at a time when many are launching funds focused on climate technology, including Lowercarbon Capital from Chris Sacca which just landed an $ 800 million fund, the new $ 312 million fund of 2150 and the launch of Wavemaker Impact. Kapoor is a sponsor of VSC Ventures, a company that also wants to help climate tech startups focus on storytelling through public relations advice. Across the table, newly opened electric vehicle maker Rivian raised $ 2.5 billion in one of the quarter’s biggest climate technology deals, and Redwood Materials, a battery startup launched by a Tesla co-founder, raised $ 700 million.
While a spotlight is positive for any emerging industry, climate tech investors need to engage in greenwashing, deceptive marketing that says products are sustainable when they are not.
“The word sustainable appears in many decks,” Felser said. The other day he spoke with the CEO of a circular economy company that creates materials for more sustainable clothing. “I looked at it and thought to myself, ‘Wait, the source of the material is not sustainable, the manufacturing process is not sustainable… it sounds like a sustainable marketing plan, not a sustainable business.’ . The offset world has also received quite a bit of criticism for startups that don’t have the proper offset checking before selling to companies, another red flag the co-founders are looking for.
The noise simply means that Climactic’s first bets will be subject to due diligence regarding impact, not claims. The bar hasn’t hurt the moonshots (literally): The Climactic portfolio to date includes Orca Mobility, a company of compact autonomous delivery robots, Rubi Labs, a service that turns carbon emissions into sustainable textiles, and Muon Space, which is building a multimodal satellite remote sensing systems.