Climate tech heats up in the Pacific Northwest as startups raise more than $1B since 2020

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A crane carries a portion of a Starbucks cafe being built by Vancouver, BC-based Nexi. The climate-tech company builds energy-efficient buildings made from less carbon-intensive materials than traditional structures. (nexi photo)

The Canadian company that holds the country’s record for going from launch to unicorn status in the shortest amount of time is not into software. It’s not even in fintech or biotech. It’s in climate technology, and more specifically, it’s working to green the construction sector, reducing the carbon footprint of buildings occupied by Starbucks Cafes, Popeye’s, Marriott Courtyards, and others.

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Nexi, which announced this month that it had raised a $45 million round and reached a valuation of $1 billion, is one of the latest examples of a climate tech company that’s hit it big.

The Pacific Northwest – home to established tech giants including Amazon, Microsoft and Boeing – is now fueling the development of up-and-coming climate-tech powerhouses. According to a GeekWire analysis, climate tech businesses in Washington, Oregon and British Columbia have raked in nearly $2 billion in venture capital equity. More than half of this was raised since the start of 2020.

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Vancouver, BC-based Nexi has raised a total of $128 million in funding since its launch in 2019. It has 350 employees.

“Nexii is part of this wave of change [construction] Industry more efficient and greener and economical,” said Gregor Robertson, Executive Vice President of Strategy and Partnerships. “We need to get them all together to really successfully transform the industry.”

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The construction sector is not alone in this challenge. As the world scrambles to curb carbon emissions from every possible source – construction, transportation, electricity and agriculture included – essentially every industry has to embrace its “wave of change” and find planet-saving ways of operating. is required. Experts around the world agree we need to reach carbon neutrality by 2050 To avoid the most devastating effects of climate change.

Four giant iron flow batteries manufactured by Wilsonville, Ore.-based ESS Inc. Each can provide 400 kilowatt-hours of energy storage and has an operating life of 25 years. They are shipped to “dry” installation sites and then filled with a mixture of iron and saltwater. (ESS PHOTO)

And investors are ponying up like never before to support the sector. Within the first six months of 2021, clean tech companies received $14.2 billion in capital internationally — which is a shame for all of the previous year’s total VC. research by pitchbook.

Local companies in Climate Tech that have raised the most capital since their launch include:

  • ESS Inc., an Oregon company that manufactures long-duration, iron-flow batteries went public through a merger with a Special Purpose Acquisition Company (SPAC) in May; The company was valued at over $1 billion
  • normal fusion, a BC company developing a commercial-scale fusion power plant, has raised $260.7 million
  • Nuscale Power, a Portland, ore-based business building small, modular nuclear reactors with $236 million from investors
  • red power bike, a Seattle startup selling electric bikes that has raised $175 million
  • swante, a BC company with technology that can capture carbon from industrial sources, has raised $150 million

GeekWire found more than 30 companies developing climate-friendly technologies that have received venture capital.

Leaders of climate tech companies say a number of factors drive success. Their innovations curb carbon emissions, but equally important they cut costs for their customers. Add to that consumer pressure to reduce environmental impacts and strengthen climate-related policies.

This is only the beginning of the funding boom. Venture capitalists, private equity firms and large corporations are all raising millions or even billions of dollars in climate tech funds to support companies in the space.

While the sector is seeing a huge increase in investment, it still represents a minor fraction of venture capital. Pitchbook reports that in the US, climate tech made up only 2% of VC tech deals and 7% of allocated capital.

There are more than a dozen additional climate tech companies under development in the Pacific Northwest, but they haven’t raised VC dollars.

Climate tech is “very much in the mainstream, at the forefront of investors’ minds — sustainability-oriented investors or mainstream VC firms,” ​​said Bryce Smith, founder and CEO levelten energy. “It’s considered an essential space for most investors these days, which is very different than it was five years ago.”

LevelTen, a Seattle-based company that launched in 2016 that facilitates the purchase of renewable energy, recently announced a new VC round that brought its total funding to $62.3 million.

What stands out about climate tech companies in the region is the range of innovations that are being developed and commercialized. Some draw from the historical strengths of the Northwest, which include the aviation and maritime sectors. Others branch out from institutions such as the University of Washington, Washington State University, and Pacific Northwest National Laboratory. Some startups show areas of expertise on these sites, including batteries, software engineering, and agriculture.

“If I can say anything about the group collectively, it’s how different and diverse people are developing solutions,” said David Kenny, executive director of Vertue Lab, is a Portland-based non-profit that supports early-stage climate tech startups.

Columbia Power Technologies, OR c-power, is a wave-energy company that operates out of Oregon State University. The business, which was formed in 2008, originally aimed to build a large-scale offshore wave farm that would power the grid, a vision that proved overly ambitious.

Five years ago C-Power began work on a project to generate small amounts of clean energy that could recharge offshore ships, underwater vehicles and equipment.

“The ocean is a power desert,” said the CEO reinst lesmann.

Columbia Power Technologies (C-Power) this fall will conduct sea trials of its Seray autonomous offshore power system at a US Navy test site in Hawaii. The system delivers energy through wave power that can be used to power underwater vehicles and open ocean environmental sensors. (C-Power Photo)

That’s why C-Power wants to create energy oases in the marine environment. Its new focus includes combining data server and transmission capabilities with clean power generation. it’s fall company deployed One of its autonomous offshore power systems for sea trials at a US Navy test site in Hawaii. Lessman is also trying to raise a venture capital round (C-Power has raised $10.2 million in the past, plus $30 million in grants from federal agencies). The company is taking its first order from commercial customers.

“The pipeline is definitely starting to fill up,” Lassemann said. “It’s a confluence of decarbonization, and a value proposition for reducing operating costs.”

David Griest, with a Seattle-based managing director SJF Ventures, has been investing in impact-focused companies for more than two decades. He sees a lot of companies in the climate tech space with strong business models and strong economics – companies like C-Power, LevelTen and Nexi finding a confluence between financial success and decarbonisation.

Among local businesses, SJF Ventures acquired the Kent, Wash.-based . have invested in novinium, a company that regenerates underground cables and reports that it has saved 660,000 metric tons of carbon emissions. The innovation that Griest sees from climate tech companies makes him hopeful for the future of the planet.

“I tend to be on the optimistic side,” Grist said. “I keep getting inspired every day. That’s what keeps me excited, just seeing what’s going on and all these great new ideas. Entrepreneurs keep inspiring us.”

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