VC funds, Hollywood stars invest heavily in climate change innovation

CHICAGO, Illinois, 18 May 2021: The year 2021 has already seen multiple climate-focused fund launches. London-based One Planet Capital launched a fund for green tech, fintech and sustainability-based B2C businesses, while Hollywood ‘Iron Man’ actor, Robert Downey Jr has founded FootPrint Coalition Ventures to invest in high-growth, sustainability-focused companies.

The financial world used to think environmental issues couldn’t generate viable rewards, but another climate-focused fund, Congruent Ventures, believes a tipping point has been passed. 

Congruent raises investment specifically for Climate Change solution start-ups and, with USD 300 million under management after closing its second fund at USD 175 million, Managing Partner and Co-Founder, Abe Yokell, said: “If you brought up the word ‘cleantech’ to any institutional investor allocating to venture 10 years ago, they would do their best to avoid the meeting, but now, there’s a fundamental belief there will be significant financial returns investing broadly in climate tech over time.”

Congruent’s portfolio includes electric vehicle-charging provider, Amply, which raised USD 13.2 million last year from investors, including Soros Fund Management and Siemens. Digitally controllable electrical panel company, Span raised USD 20 million in January through Congruent, with investors including Munich Re Ventures’ HSB Fund and Amazon’s Alexa Fund.

And Congruent itself is well-founded, with investors including UC Investments, the Microsoft Climate Innovation Fund, Three Cairns Group, Jeremy and Hannelore Grantham Environmental Trust and Surdna Foundation, among other institutions, foundations and family offices.

Regulation A+ crowdfunding companies are also seeing investment, such as digital twins company, Cityzenith, who recently launched their international ‘Clean Cities, Clean Future’ campaign as part of the Race to Zero movement.

Cities worldwide generate 70% of the world’s carbon emissions, but Cityzenith’s AI Digital Twin platform technology can help property asset management groups, city planners and developers reduce emissions and move to carbon neutrality in the next 10 years. 

Michael Jansen, CEO, Cityzenith, said at the launch of the ‘Clean Cities – Clean Future’ initiative: “We have to help the most polluted urban centers become carbon neutral, and we plan to do this by donating the company’s Digital Twin platform, SmartWorldOS to key cities, one at a time, after every USD 1 million we raise. We’re able to do this because of the recent surge of investment we’ve had as part of our USD 15m raise.”

Cityzenith is already benefiting from the funding shift, reportedly attracting USD 2.5 million in investment since late 2020 through Regulation A+ crowdfunding and a surge in shares from USD 0.575 to USD 1.50 in just five months. The US company has raised USD 10 million to date.

Jansen said: “In the past decade, investors struggled to justify backing Climate Change solutions, but global demand for net-zero carbon by 2050 and a sustainable future means a tipping point has been passed.

“Products, such as our own SmartWorldOS™, which monitors and collects data on future and existing building assets, so construction and maintenance can occur at optimal efficiency, will be essential to reducing carbon emissions and energy waste. We must invest in climate solutions now so that we can protect our planet sooner and more effectively.

“We’ve seen a significant amount of interest in our current USD 15m raise from accredited investors in recent months, as there are tangible, financial upsides in the built-environment to going climate-friendly, and carbon credits are going to become an enormous part of this in the next few years.”

European-based fund 2150 also launched this year, investing €200m (USD 240 million) into start-ups developing sustainable technologies to lower carbon emissions in Europe’s cities.

Co-founder Christian Hernandez has seen a shift in perceptions, too. He said: “There are enough proof points now that those two (profitable investments and investing in climate solutions) can coexist.”

Islington and Clapham

As we bid goodbye to 2020 and gingerly step into 2021, the feeling is not of relief, because the virus is still on the prowl. It must be added, though, that we have reached an inflexion point with the early promise being shown by some of the vaccines that have been deployed.

Now, amidst the carnage of 2020, we have been witness to heartwarming instances of human endeavour – of the medical fraternity putting their lives at risk to save others, of boffins hard at work harnessing the power of science and engineering to provide relief to not only healthcare workers but also numerous other sectors.

Away from the COVID scene, there are other instances that have stood out. Like the Bunhill Heat and Power Network project, in central London, which uses waste heat from the London Underground network to supply heat and hot water to nearly 1,500 homes and other facilities in the Borough of Islington, in a bid to lower indirect carbon emissions and to achieve carbon neutrality by 2030. Human ingenuity repurposed the former City Road London Underground station into an underground air extraction system. It draws warm air from the tunnels, still in use by the London Underground’s Northern Line.

Not only will the project reportedly lower indirect emissions but also cut heating costs by 10%, benefitting the residents connected to the network – a case of district energy providing succour to tenants by passing on the savings.

What is even more heartwarming, according to the company that supplied the technology to the project (see story on page XX) is that it can be replicated in underground networks the world over.

As if by coincidence, the subterranean labyrinthine depths of London constitute the theatre for yet another instance of human ingenuity and resourcefulness. Growing Underground is a farming enterprise that is using long-forgotten World War 2 tunnels used as shelter during air raids conducted by the Luftwaffe. About 100 feet beneath London’s Clapham, growers working for the enterprise are busy harvesting micro-greens using hydroponic technology, which uses 70% less water, when compared to traditional farming practices. The produce is pesticide-free and provides an opportunity to Londoners to eat fresh and without the guilt from knowledge that the greens on their plate are the result of burning copious volumes of climate-threatening fossil fuels in transporting them to their doorstep. The project is redefining food supply chains for the better and lowering food wastage by increasing shelf life.

Such examples as the Islington district energy scheme and Growing Underground serve as inspiration for us to consider abandoning some of the hackneyed approaches that are not taking us far in our quest for a better planet. They are about courage and speak of a certain frontier spirit that we ought to consider embracing.