Let’s say you’re a founder and you’ve built a company based on a revolutionary technology that can make hydrogen cheaper and faster than anyone else – so much faster and cheaper that you’ve succeeded in your first fundraising, bringing in tens of millions of dollars. dollars to prove that it works. And it’s even better than expected.
Now all you have to do is build a commercial-scale factory, what’s called a first-of-its-kind facility. Some call it the “commercial valley of death,” and it’s the point where many climate tech startups struggle. Because no one has yet undertaken such a project, usual financiers tend to hesitate; there are too many unknowns.
Prime Coalition, a climate nonprofit, hopes to bridge the valley with a new program, Trellis Climate.
Prime Coalition has long taken a different approach to climate finance compared to its for-profit brethren. It makes the usual venture capital-style investments in startups through its Prime Impact Fund and also helps philanthropists direct their money toward climate-related projects it deems high impact. Trellis Climate follows the latter model by focusing on the intermediate stages, where capital becomes scarce.
“There are more and more philanthropists who are really interested in solving the climate problem,” Lara Pierpoint, director of Trellis Climate, told TechCrunch.
“The best way to use philanthropy is to try new ideas, to really tackle things that have very high impact potential,” she added. “This is the most flexible and potentially riskiest set of dollars there is.”
For climate tech founders, this type of funding is probably good news. Startup founders have a wide range of capital to tap, from numerous venture capital funds to federal grants. That may not be enough to stop the planet from warming more than 1.5 degrees Celsius, but so far it’s been enough to prime the pump and keep climate technology investors busy.
It was assumed that once climate technologies were proven, “then business and industry could scale these technologies,” Pierpoint said. “On the corporate side, many companies are really pushed to take actions that create immediate value for shareholders. » As a result, the gap widens in the middle.
“We strongly believe that philanthropy is the catalyst, but the goal is to attract infrastructure investors who are willing to take a little risk,” she said.
The program’s first investments include Ample Carbon, a startup that converts old coal-fired power plants to bioenergy with carbon capture and storage, and Ebb Carbon, a marine carbon removal startup.
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