GreenTech
Auto Added by WPeMatico
Planning 500,000 charging points for EVs by 2025, Shell becomes the latest company swept up in EV charging boom
Shell’s plan to roll out 500,000 electric charging stations in just four years is the latest sign of an EV charging infrastructure boom that has prompted investors to pour cash into the industry and inspired a few companies to become public companies in search of the capital needed to meet demand.
Since the beginning of the year, three companies have been acquired by special purpose acquisition vehicles and are on a path to go public, while a third has raised tens of millions from some of the biggest names in private equity investing for its own path to commercial viability.
The SPAC attack began in September when an electric vehicle charging network ChargePoint struck a deal to merge with special purpose acquisition company Switchback Energy Acquisition Corporation, with a market valuation of $2.4 billion. The company’s public listing will debut February 16 on the New York Stock Exchange.
In January, EVgo, an owner and operator of electric vehicle charging infrastructure, agreed to merge with the SPAC Climate Change Crisis Real Impact I Acquisition for a valuation of $2.6 billion — a huge win for the company’s privately held owner, the power development and investment company LS Power. LS Power and EVgo management, which today own 100% of the company, will be rolling all of its equity into the transaction. Once the transaction closes in the second quarter, LS Power and EVgo will hold a 74% stake in the newly combined company.
One more deal soon followed. Volta Industries agreed to merge this month with Tortoise Acquisition II, a tie-up that would give the charging company named after battery inventor Alessandro Volta a $1.4 billion valuation. The deal sent shares of the SPAC company, trading under the ticker SNPR, rocketing up 31.9% in trading earlier this week to $17.01. The stock is currently trading around $15 per share.
Not to be outdone, private equity firms are also getting into the game. Riverstone Holdings, one of the biggest names in private equity energy investment, placed its own bet on the charging space with an investment in FreeWire. That company raised $50 million in a new round of funding earlier this year.
“The writing is on the wall and the investors have to take the time. There’s been a flight out of the traditional investment opportunities in markets,” said FreeWire chief executive Arcady Sosinov, in an interview. “There’s been a flight out of the oil and gas companies and out of the traditional utilities. You have to look at other opportunities… This is going to be the largest growth opportunity of the next 10 years.”
FreeWire deploys its infrastructure with BP currently, but the company’s charging technology can be rolled out to fast food companies, post offices, grocery stores or anywhere people go and spend somewhere between 20 minutes and an hour. With the Biden administration’s plan to boost EV adoption in federal fleets, post offices actually represent another big opportunity for charging networks, Sosinov said.
“One of the reasons we find electrification of mobility so attractive is because it’s not if or how, it’s when,” said Robert Tichio, a partner at Riverstone in charge of the firm’s ESG efforts. “Penetration rates are incredibly low… compare that to Norway or Northern Europe. They have already achieved double-digit percentages.”
A recent Super Bowl commercial from GM featuring Will Farrell showed just how far ahead Norway is when it comes to electric vehicle adoption.
“The demands on capital in the electrification of transport will begin to approach three quarters of a trillion annually,” Tichio said. “The short answer to your question is that the needs for capital now that we have collectively, politically, socially economically come to a consensus in terms of where we’re going and we couldn’t say that 18 months ago is going to be at a tipping point.”
Shell already has electric vehicle charging infrastructure that it has deployed in some markets. Back in 2019 the company acquired the Los Angeles-based company Greenlots, an EV charging developer. And earlier this year Shell made another move into electric vehicle charging with the acquisition of Ubitricity in the U.K.
“As our customers’ needs evolve, we will increasingly offer a range of alternative energy sources, supported by digital technologies, to give people choice and the flexibility, wherever they need to go and whatever they drive,” said Mark Gainsborough, executive vice president, New Energies for Shell, in a statement at the time of the Greenlots acquisition. “This latest investment in meeting the low-carbon energy needs of US drivers today is part of our wider efforts to make a better tomorrow. It is a step towards making EV charging more accessible and more attractive to utilities, businesses and communities.”
Powered by WPeMatico
EV charging stations, biofuels, the hydrogen transition and chemicals are pillars of Shell’s climate plan
Royal Dutch Shell Group, one of the largest publicly traded oil producers in the world, just laid out its plan for how the company will survive in a zero-emission, climate conscious world.
It’s a plan that rests on five main pillars that include the massive rollout of electric vehicle charging stations; a greater emphasis on lubricants, chemicals and biofuels; the development of a significantly larger renewable energy generation portfolio and carbon offset plan; the continued development of hydrogen and natural gas assets while slashing oil production by 1% to 2% per year; and investing heavily in carbon capture and storage.
These categories cut across the company’s business operations and represent one of the most comprehensive (if high level) plans from a major oil company on how to keep their industry from becoming the next victim of the transition to low emission (and eventually) zero emission energy and power sources (I’m looking at you, coal industry).
“Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society,” said Royal Dutch Shell Chief Executive Officer Ben van Beurden in a statement.
To keep those shareholders from abandoning ship, the company also committed to slashing costs and boosting its dividend per share by around 4% per year. That means giving money back to investors that might have been spent on expensive oil and gas exploration operations. The company also committed to pay down its debt and make its payouts to shareholders 20% to 30% of its cash flow from operations. That’s… very generous.
Image Credits: Bryce Durbin
The Plan
Shell is a massive business with more than 1 million commercial and industrial customers and about 30 million customers coming to its 46,000 retail service stations daily, according to the company’s own estimates. The company organized its thinking around what it sees as growth opportunities, energy transition opportunities and then the gradual obsolescence of its upstream drilling and petroleum production operations.
In what it sees as areas for growth, Shell intends to invest around $5 billion to $6 billion to its initiatives, including the development of 500,000 electric vehicle charging locations by 2025 (up from 60,000 today) and an attendant boost in retail and service locations to facilitate charging.
The company also said it would be investing heavily in the expansion of biofuels and renewable energy generation and carbon offsets. The company wants to generate 560 terawatt hours a year by 2030, which is double the amount of electricity it generates today. Expect to see Shell operate as an independent power producer that will provide renewable energy generation as a service to an expected 15 million retail and commercial customers.
Finally the company sees the hydrogen economy as another area where it can grow.
In places where Shell already has assets that can be transitioned to the low carbon economy, the company’s going to be doubling down on its bets. That means zero emission natural gas production and a trebling down on chemicals manufacturing (watch out Dow and BASF). That means more recycling as well, as the company intends to process 1 million tons of plastic waste to produce circular chemicals.
Upstream, which was the heart of the oil and gas business for years, the company said it would “focus on value over volume” in a statement. What that means in practice is looking for easier, low-cost wells to drill (something that points to the continued importance of the Middle East in the oil economy for the foreseeable future). The company expects to reduce its oil production by around 1% to 2% per year. And the company’s going to be investing in carbon capture and storage to the tune of 25 million tons per year through projects like the Quest CCS development in Canada, Norway’s Northern Lights project and the Porthos project n the Netherlands.
“We must give our customers the products and services they want and need – products that have the lowest environmental impact,” van Beurden said in a statement. “At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society.”
Money or finance green pattern with dollar banknotes. Banking, cashback, payment, e-commerce. Vector background. Image Credits: Svetlana Borovkova / Getty Images
Money talk
For the company to survive in a world where revenues from its main business are cut, it’s also going to be keeping operating expenses down and will be looking to sell off big chunks of the business that no longer make sense.
That means expenses of no more than $35 billion per year and sales of around $4 billion per year to keep those dividends and cash to investors flowing.
“Over time the balance of capital spending will shift towards the businesses in the Growth pillar, attracting around half of the additional capital spend,” the company said. “Cash flow will follow the same trend and in the long term will become less exposed to oil and gas prices, with a stronger link to broader economic growth.”
Shell set targets for reducing its carbon intensity as part of the pay that’s going to all of the company’s staff and those targets are… eye opening. It’s looking at reductions in carbon intensity of 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, using a baseline of 2016 as its benchmark.
The company said that its own carbon emissions peaked in 2018 at 1.7 giga-tons per year and its oil production peaked in 2019.
The context
Shell’s not taking these steps because it wants to, necessarily. The writing is on the wall that unless something dramatic is done to stop fossil fuel pollution and climate change, the world faces serious consequences.
A study released earlier this week indicated that air pollution from fossil fuels killed 18% of the world’s population. That means burning fossil fuels is almost as deadly as cancer, according to the study from researchers led by Harvard University.
Beyond the human toll directly tied to fossil fuels, there’s the huge cost of climate change, which the U.S. estimated could cost $500 billion per year by 2090 unless steps are taken to reverse course.
Powered by WPeMatico
New York’s David Energy has raised $4.1 million to ‘build the Standard Oil of renewable energy’
“We intend to build the Standard Oil of renewable energy,” said James McGinniss, the co-founder and chief executive of David Energy, in a statement announcing the company’s new $19 million seed round of debt and equity funding.
McGinniss’ company is aiming to boost renewable energy adoption and slash energy usage in the built environment by creating a service that operates on both sides of the energy marketplace.
The company combines energy management services for commercial buildings through the software it has developed with the ability to sell energy directly to customers in an effort to reduce the energy consumption and the attendant carbon footprint of the built environment.
The company’s software, Mycor, leverages building demand data and the assets that the building has at its disposal to shift user energy consumption to the times when renewable power is most available, and cheapest.
It’s a novel approach to an old idea of creating environmental benefits by reducing energy consumption. Using its technology, David Energy tracks both the market price of energy and the energy usage by the buildings it manages. The company sells energy to customers at a fixed price and then uses its windows into energy markets and energy demand to make money off the difference in power pricing.
That’s why the company needed to raise $15 million in a monthly revolving credit facility from Hartree Partners. So it could pay for the power its customers have bought upfront.
Image Credits: Getty Images
There are a number of tailwinds supporting the growth of a business like David Energy right now. Given the massive amounts of money that are being earmarked for energy conservation and energy efficiency upgrades, companies like David, which promise to manage energy consumption to reduce demand, are going to be huge beneficiaries.
“Looking at the macro shift and the attention being paid to things like battery storage and micro grids we do feel like we’re launching this at the perfect time,” said McGinniss. “We’re offering [customers] market rates and then rebating the savings back to them. They’re getting the software with a market energy supply contract and they are getting the savings back. Bringing that whole bundled package together really brings it all together.”
In addition to the credit facility, the company also raised $4.1 million in venture financing from investors led by Equal Ventures and including Operator Partners, Box Group, Greycroft, Sandeep Jain and Xuan Yong of RigUp, returning angel investor Kiran Bhatraju of Arcadia and Jason Jacobs’ recently launched My Climate Journey Collective, an early-stage climate tech fund.
“Renewable energy generators are fundamentally different in their variable, distributed, and digitally-native nature compared to their fossil fuel predecessors while customer loads like heating and driving are shifting to electricity consumption from gas. The sands of market power are shifting and incumbents are poorly-positioned to adapt to evolving customer needs, so there’s a massive opportunity for us to capitalize.”
Founded by McGinniss, Brian Maxwell and Ahmed Salman, David Energy raised $1.5 million in pre-seed financing back in March 2020.
As the company expands, its relationship with Hartree, an energy and commodities trading desk, will become even more important. As the startup noted, Hartree is the gateway that David needs to transact with energy markets. The trader provides a balance sheet for working capital to purchase energy on behalf of David’s customers.
“Renewables are causing fundamental shifts in energy markets, and new models and tools need to emerge,” said Dinkar Bhatia, co-head of North American Power at Hartree Partners. “James and the team have identified a significant opportunity in the market and have the right strategy to execute. Hartree is excited to be a commodity partner with David Energy on the launch of the new smart retail platform and is looking forward to helping make DE Supply the premier retailer in the market,” said McGinniss.
David now has retail electricity licenses in New York, New Jersey and Massachusetts and is looking to expand around the country.
“David Energy stands to reinvent the way that hundreds of billions of dollars a year in energy are consumed,” said Equal Ventures investor Rick Zullo. “Business model creativity and finding ways to change user behavior with new models is just as important if not more important than the technology innovation itself.”
Zullo said his firm pitched David Energy on leading the round after years of looking for a commercial renewable energy startup. The core insight was finding a service that could appeal not to the new construction that already is working with top-of-the-line energy management systems, but with the millions of square feet that aren’t adopting the latest and greatest energy management systems.
“Finding something that will go and bring this to the mass market was something we had been on the hunt for really since the inception of Equal Ventures,” said Zullo.
The innovation that made David attractive was the business model. “There is a landscape of hundreds of dead companies,” Zullo said. “What they did was find a way to subsidize the service. They give away at low or no cost and move that in with line items. The partnership with Partree gives them the opportunity to be the cheapest and also the best for you and the highest margin regional energy provider in the market.”
Powered by WPeMatico
A startup using a new tech to make hydrogen extracts cash from Bill Gates’ climate tech fund
Four years ago when Zach Jones went to do due diligence on C-Zero, a startup out of Santa Barbara, California commercializing a new approach to producing hydrogen, for the small family office he was working for, he had no idea he’d wind up as the company’s chief executive officer.
Or that the company would wind up raising money from Breakthrough Energy Ventures, the billionaire-backed investment vehicle focused on financing companies developing technologies to reduce greenhouse gas emissions, and some of the world’s largest industrial and oil and gas companies.
At the time, Jones was working for Beryllium Capital, a small investment office out of South Dakota, and had identified a potential investment opportunity in C-Zero, a company commercializing a new way of making hydrogen developed by Eric McFarland, a professor at UCSB.
There was only one problem — McFarland had the research, but didn’t know how to run a company. That’s when Jones stepped in. His firm didn’t make the investment, but when the former Economist science writer took over, the company was able to nab a seed round from PG&E and SoCal Gas, California’s two massive utilities.
The reason for their investments is the same reason Breakthrough Energy Ventures became interested in the young company. Even with renewable energy production coming on line at a breakneck pace, much of the world will still be using fossil fuels for the foreseeable future, and the greenhouse gas emissions from that fossil fuel production needs to go to zero.
C-Zero is developing a technology that converts natural gas to hydrogen, a much cleaner source of fuel, and solid carbon as the only waste stream for use in electrical generation, process heating and the production of commodity chemicals like hydrogen and ammonia.
“Our CTO talks about running a coal mine in reverse,” Jones said.
Night image of an industrial manufacturing plant. Image Credits: Getty Images
The company’s technology is a form of methane pyrolysis, which uses a proprietary chemical catalyst to separate the hydrogen gas from other particles, leaving behind that solid carbon waste. The process, which is neither waste free (there’s that solid carbon) nor renewable (the feedstock is natural gas), is cleaner than current low-cost methods of hydrogen production and far cheaper than the more renewable ways of making hydrogen.
Making renewable hydrogen requires making electricity to send a charge through water to split the liquid into hydrogen and oxygen. And it takes far more energy to pull a hydrogen atom off of an oxygen atom than it does to split that hydrogen from a carbon atom.
“The reason that hydrogen is interesting is that it is a great supplement to intermittent renewables,” said Jones. “It’s really about energy storage… when you look at long duration storage on a daily and seasonal basis… it becomes exorbitantly expensive. Having a chemical fuel is going to be critical part of decarbonizing everything.”
Jones describes the technology as “pre-combustion carbon capture,” and thinks that it could be critical to unlocking the benefits of hydrogen for a range of industrial applications including heavy vehicle fueling, utility power generation and industrial power for manufacturing.
He’s not alone.
“Over $100 billion of commodity hydrogen is produced annually,” said Carmichael Roberts, Breakthrough Energy Ventures, the new lead investor in C-Zero’s $11.5 million funding. “Unfortunately, the overwhelming majority of that production comes from a process called steam methane reforming, which also produces large quantities of CO2. Finding low-cost, low-emission methods of hydrogen production — such as the one C-Zero has created — will be critical to unlocking the molecule’s potential to decarbonize major segments of the agricultural, chemical, manufacturing and transportation sectors.”
Joining the Bill Gates-backed Breakthrough Energy Ventures in the new round is Eni Next (the investment arm of the Italian oil and gas and power company), Mitsubishi Heavy Industries and the hydrogen technology-focused venture firm AP Ventures.
Mitsubishi Heavy Industries already has an application for C-Zero’s technology. The company is in the process of re-powering an existing coal plant to run on a combination of natural gas and hydrogen by 2025. It’s possible that C-Zero’s technology could help get there.
Beyond the lower-cost methods used in manufacturing hydrogen, C-Zero may be one of the first companies that could qualify for new tax credits on carbon sequestration established by the IRS in the U.S. earlier this year. Those credits would give qualifying companies $20 per ton of sequestered solid carbon — the exact waste product from C-Zero’s process.
Even as C-Zero begins commercializing its technology it faces some stiff competition from some of the largest chemical companies in the world.
The German chemicals giant BASF has been developing its own flavor of methane pyrolysis for nearly a decade and has begun building test facilities to scale up production of its own clean hydrogen.
Two other big European corporations are also joining the hydrogen production game as the French chemicals company Air Liquide announced a joint venture with Siemens Energy to work on hydrogen production.
Jones acknowledges that the company’s technology is only a stopgap solution… for now. In the future, as the world moves to renewable natural gas production from waste, he envisions the potential of a potentially circular hydrogen economy.
“In 100 years will this technology be around? If it is it’ll be because we’re using renewable natural gas,” Jones said. There are a lot of steps that need to be traveled to get there, but Jones is confident in the near-term success of the project.
“There’s always going to be a need for a very energy dense fuel. Liquid hydrogen is the most energy dense thing that’s out there outside of something that’s nuclear in nature,” he said. “I think that hydrogen is here to stay. At the end of the day the lowest cost of energy that has the lowest cost for avoided CO2 is what’s going to win.”
Powered by WPeMatico
LanzaJet inks deal with British Airways for 7,500 tons of low-emission fuel additive per year
LanzaJet, the renewable jet fuel startup spun out from the longtime renewable and synthetic fuel manufacturer LanzaTech, has inked a supply agreement with British Airways to supply the company with at least 7,500 tons of fuel additive per year.
The deal marks the second agreement between the U.K.-based airline and a renewable jet fuels manufacturer following an August 2019 agreement with the British company Velocys. It’s also LanzaJet’s second offtake agreement. The company announced itself with a partnership between the renewable fuels manufacturer and the Japanese airline ANA.
Through the deal, British Airways will invest an undisclosed amount in LanzaJet’s first commercial scale facility in Georgia. The fuel will begin powering flights by the end of 2022, the companies said.
It’s part of a broader expansion effort that could see LanzaJet establish a commercial facility for the U.K. airline in its home country in the coming years.
Back in the U.S. the plan is to begin construction on the Georgia facility later this year, which will convert ethanol into a jet fuel additive using a chemical process.
Fuel from the plant will reduce the overall greenhouse emissions by 70% versus traditional jet fuel. It’s the equivalent of taking almost 27,000 gasoline or diesel-powered cars off the road each year, according to the company.
The deal is the culmination of years of research and development work between LanzaJet’s parent company, LanzaTech, and Department of Energy’s Pacific Northwest National Laboratory.
Spun off in June 2020, LanzaJet was financed by an investment group including parent company LanzaTech, Mitsui, and Suncor Energy. British Airways now joins the two other strategic investors as LanzaJet eyes an ambitious scale-up program through 2025. The company plans to launch four large-scale plants producing a pipeline of renewable fuels.
“Low-cost, sustainable fuel options are critical for the future of the aviation sector and the LanzaJet process offers the most flexible feedstock solution at scale, recycling wastes and residues into SAF that allows us to keep fossil jet fuel in the ground. British Airways has long been a champion of waste to fuels pathways especially with the UK Government,” said Jimmy Samartzis, the chief executive of LanzaJet. “With the right support for waste-based fuels, the UK would be an ideal location for commercial scale LanzaJet plants. We look forward to continuing the dialogue with BA and the UK Government in making this a reality, and to continuing our support of bringing the Prime Minister’s Jet Zero vision to life.”
The LanzaJet fuel is certified for commercial flight up to 50% blend with conventional kerosene. “Considering the aviation market is 90 billion gallons of jet fuel a year, having 50% or 45 billion of production capacity and reaching that max blend level will be a great problem to have,” said LanzaTech chief executive Jennifer Holmgren in an email.
LanzaJet’s manufacturing facility in Georgia is designed to produce zero-waste fuels, according to Holmgren, and British Airways will receive 7,500 tons of sustainable aviation fuel from LanzaJet’s biorefinery each year for the next five years.
The partnership is between British Airways, Hangar 51 (International Airlines Group’s accelerator) and others.
In addition to its biofuel work, British Airways is also working with companies like ZeroAvia, the hydrogen fuels company that also received backing from Amazon, Shell and Breakthrough Energy Ventures.
“For the last 100 years we have connected Britain with the world and the world with Britain, and to ensure our success for the next 100, we must do this sustainably,” said British Airways chief executive Sean Doyle.
“Progressing the development and commercial deployment of sustainable aviation fuel is crucial to decarbonising the aviation industry and this partnership with LanzaJet shows the progress British Airways is making as we continue on our journey to net zero.”
Powered by WPeMatico
Here’s how Elon Musk’s $100 million Xprize competition for carbon removal will work
Elon Musk notified the world that he would be donating $100 million to pursue new technologies for carbon capture, methods through which carbon dioxide can be actively extracted from the atmosphere as a means to help stave off climate change. As TechCrunch reported in January when he made the tweet, Musk’s sizeable pool of monetary incentive would be going to the Xprize foundation, a nonprofit that has organized similar ambitious technology competitions aimed at developing world-changing tech. Now, Xprize and Musk have released new details of the competition.
The entire $100 million prize pool is up for grabs with this competition, which will seek solutions that can “pull carbon dioxide directly from the atmosphere or oceans and lock it away permanently in an environmentally benign way.” That’s an ambitious goal, and one that seeks methods for carbon extraction which have a net negative effect on the overall global balance of the element’s presence. Xprize aims to award up to 15 finalists $1 million each, along with three top winners, with $50 million to the Grand Prize victor, and $20 million and $10 million respectively for second and third place. Twenty-five student scholarships valued at $250,000 each will also be up for grabs specifically for student team entrants.
To qualify for victory, solutions must be able to extract one ton of CO2 per day, and be viable in a scaled, validated model at time of presentation, with the ability to scale it to “gigaton levels” in commercially viable ways in the future. Those are big goals for new technologies, but the competition’s stakes are high: Musk has frequently referred to climate change as an existential threat to humanity, and carbon capture is one key means to combat it.
Carbon capture methods exist, and some are at the center of new startups and emerging businesses, like Canadian company Carbon Engineering, which uses CO2 extracted from the atmosphere to create new types of fuel, or Air Vodka, a carbon negative vodka distilled using C02 removed from the atmosphere. Though there are a handful of companies pursuing this, the problem is that it’s typically very expensive to remove carbon in a way that is both safe and that has no subsequent impact on the environment from its resulting byproducts.
The new Xprize competition hopes to spur the development of a wide range of emerging companies in a way similar to how the 2004 $10 million private spaceflight Ansari Xprize led the development of a whole new era in the space industry. The competition will officially begin on April 22, 2021, at which time full guidelines will be made available and registration will open. Applicants will have up to four years to submit their solution, with the competition closing on Earth Day 2025 and the initial $1 million awards distributed 18 months following that. That will provide the funding necessary for teams to build out their full-scale demos to claim the top prizes.
Powered by WPeMatico
Electric moped startup Revel launches an EV charging business
Revel, the shared electric moped startup, is building a DC fast-charging station for electric vehicles in New York City, the first in a new business venture that will eventually spread to other cities.
The company said Wednesday that this new “Superhub,” which is located at the former Pfizer building in Brooklyn, will contain 30 chargers and be open to the public 24 hours a day. This will be the first in a network of Superhubs opened by Revel across New York City, the company said.
Revel didn’t build the EV charging infrastructure in-house. Instead, it is using Tritium’s new RTM75 model for the first 10 chargers at its Brooklyn site, which will go live this spring. These chargers are designed to deliver 100 additional miles of charge to an electric vehicle in about 20 minutes, according to Revel.
The EV charging business has been couched by Revel as a mission to electrify cities. The move comes as a growing number of automakers, including legacy companies like GM, Ford and VW Group, along with new entrant Rivian and EV leader Tesla, add more electric vehicles to their portfolios.
Revel’s expansion into charging marks its first new product line since launching a shared fleet of electric mopeds in 2018. Revel, founded by Frank Reig and Paul Suhey, started with a pilot program in Brooklyn and later expanded to Queens, the Bronx and sections of Manhattan. It has been on a fast-paced growth track thanks to the $27.6 million in capital raised in October 2019 in a Series A round led by Ibex Investors. The equity round included newcomer Toyota AI Ventures and further investments from Blue Collective, Launch Capital and Maniv Mobility.
Several thousand mopeds are available to rent in New York City today. Revel expanded its shared moped business to other cities such as Austin, Miami and Washington, D.C in its first 18 months of operation. Last year, the company launched in Oakland and received a permit in July 2020 to operate in San Francisco.
Shared mopeds haven’t been successful everywhere. Revel pulled out of Austin in December. Reig said at the time that the COVID-19 pandemic, which has caused ridership to fall across shared micromobility services, along with the city’s deep-rooted car culture, was proven difficult to penetrate.
Powered by WPeMatico
Amazon begins testing customer deliveries using Rivian electric vans
Amazon has started making deliveries to customers in Los Angeles using electric vans designed and built by Rivian.
The electric vans, which are part of Amazon’s 2040 climate pledge, won’t go into series production until the end of the year, according to an update Wednesday by the company. Amazon declined to reveal how many electric vans were in the test fleet.
The customer deliveries are part of continuous testing being conducted by Amazon and Rivian to measure performance as well as safety durability in various climates and geographies. Road tests first started more than four months ago. The current fleet of vehicles was built at Rivian’s facility in Plymouth, Michigan and can drive up to 150 miles on a single charge. Rivian engineers will continue to refine the vehicles for the start of production at its Normal, Illinois factory.
Image Credits: Amazon
In the meantime, these electric vehicles will continue to pop up on delivery routes in up to 15 additional cities in 2021. Eventually, Amazon plans to deploy at least 100,000 electric vans — the size of its order with Rivian — over the next several years.
Amazon and Rivian began testing vehicles four months prior to making customer deliveries, as part of the testing and development process. Amazon is also starting to modify its buildings to accommodate the new fleet of vehicles and has installed thousands of electric vehicle charging stations at its delivery stations across North America and Europe, the company said.
“We’re loving the enthusiasm from customers so far–from the photos we see online to the car fans who stop our drivers for a first-hand look at the vehicle,” Ross Rachey, director of Amazon’s global Fleet and products, said in a statement. “From what we’ve seen, this is one of the fastest modern commercial electrification programs, and we’re incredibly proud of that.”
The exterior of Rivian-built electric vans share some of the same design features found in today’s gas-powered versions. There are a few more rounded edges and an overall sleeker look to the electric vans.
The real difference is in the electric architecture and the custom features that have been integrated into the vans, including highway driving and traffic assist features; exterior cameras that can provide a 360-degree view for the driver via a digital display; a larger interior floor space in the cabin to help with drivers getting to and from the cabin compartment; surround tail lights for better braking visibility; and three-level shelving and a bulkhead cargo compartment separating door. Amazon’s Alexa voice assistant is also an embedded feature.
Powered by WPeMatico
bluShift Aerospace launches its first rocket powered by biofuels
New space startup bluShift wants to bring a new kind of propellant to the small satellite launching market, with rockets powered by bio-derived rocket fuels. These differ from traditional fuels in that they offer safety advantages during handling, and ecological advantages during production and use. The startup has been working on its solid rocket biofuel since its founding in 2014, and has received grants from the Maine Technology Institute and NASA’s Small Business Innovation Research (SBIR) program to refine its fuel formula and rocket engine design to help it get to this point.
The company achieved a milestone on Sunday with its first rocket launch — a low-altitude flight of a small sounding rocket, called Stardust 1.0. It’s a single-stage prototype, which can only carry 18 lbs of payload and is designed to achieve suborbital space. That may not seem like much, but it is enough to put small research equipment up into suborbital space, at costs that put launches within range for small companies and academic institutions.
Image Credits: Knack Factory/Courtesy Aerospace
Stardust 1.0 is designed to be reusable, though it’s still a prototype, and the company is also working on Stardust 2.0, which is a second prototype that’s expected to increase the payload capacity and act as the primary building block for its subsequent production commercial rockets, including Starless Rogue, a two-stage launcher for suborbital missions, and Red Dwarf, a three-stage, 66-lb capacity launch vehicle that can reach low Earth orbit.
Sunday’s launch looked like it might not have been on track to go well at first, with an initial attempt seeing the rocket’s ignition light — but without a takeoff. After resetting for a second try, there wasn’t any ignition. Finally the rocket did take off late in the day, with a flight that the company said “went perfectly” on a follow-up call with media.
Powered by WPeMatico
SPACs are the construct VCs need to fund clean tech
In light of climate change and escalating global energy demand, more emphasis is being placed on emerging clean technologies — ranging from renewables and energy storage to nuclear power. Although these technologies have tremendous potential, they require lots of innovation, and innovation needs abundant capital.
The issue: early-stage financing for clean tech hasn’t been plentiful, and it’s stifling the growth of new energy companies. Why is this? In general, clean tech companies lack the startup advantages of agility and flexibility.
“Moving fast” works for products such as consumer mobile apps and SaaS solutions. The clean tech sector, on the other hand, tends to involve highly regulated, capital-intensive, mission-critical infrastructure.
That has hurt both returns and well-intentioned impact. According to Cambridge Associates, venture-backed companies have returned, on average, -15% internal rate of return (IRR) since 2000. Contrast that to venture-backed companies in healthcare, which returned 24% in IRR over the same time period.
Why clean tech lacks funding
While noble in its aims to make the world a better, cleaner, safer, healthier place through technology, clean tech venture capital has suffered simply because clean tech does not fit the traditional venture capital model. Central to the venture capital model is the ability to de-risk new ideas and significantly capitalize the most promising ones, allowing for liquidity via M&A or initial public offering (IPO).
Early-stage financing for clean tech hasn’t been plentiful, and it’s stifling the growth of new energy companies.
This construct allows for the return of venture capital dollars, plus appreciation that enables VC firms to raise new funds. These capitalization events also allow the venture-backed company to accelerate growth and maximize market impact.
How this construct works is evident when comparing healthcare and clean tech. In healthcare, new innovations are de-risked by VCs. More mature innovations are acquired or reach IPO every year. As a result, the average annual ratio of dollars raised via an exit to VC-invested dollars since 2012 is 1.8. This ratio is only 0.2 for clean tech, an 800-plus percent difference in the wrong direction. This has resulted in poor returns and limited capitalization of clean tech companies.
Enter (or reenter) the SPAC
Given the state of the world’s environment and lack of abundant energy in emerging economies, we need to collectively fix this issue. Special purpose acquisition companies (SPACs) are significantly improving clean tech’s venture capital construct. According to Investopedia:
SPACs are companies with no commercial operations that are formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company.
Also known as “blank-check companies,” SPACs have been around for decades. In recent years, they’ve become more popular, attracting big-name underwriters and investors and raising a record amount of IPO money in 2019.
In 2020, more than 110 SPACs completed transactions in the U.S., capitalizing these companies with more than $29 billion.
In 2020, SPACs capitalized clean tech companies with almost $4 billion of capital, including Fisker, Lordstown Motors, QuantumScape, Hyliion, XL Fleet and others. This helped push the ratio of funds raised at exit to venture capital invested in 2020 from the previous 0.2 average to a much healthier 0.6, a 200% improvement.
In 2021, we will likely see even further improvement. Why? Because there are 43 active SPACs looking toward or finalizing merger targets with a clean tech focus, potentially providing $12 billion in growth capital. Even if there are no more new SPACs in 2021 and a historically low average of M&As and IPOs, 2021 promises continued improvement for clean tech investment.
Don’t let Nikola tarnish the pack
One of the most high-profile clean tech SPACs was Nikola Corporation. The battery-electric and hydrogen-powered truck maker has attracted much fanfare since going public last June through a reverse merger with special purpose acquisition company VectoIQ. The company’s market capitalization soared and things seemed to be going well, but things became controversial later in the year when the company was accused of making false statements about its technology and other things.
Although examples such as Nikola have the potential to tarnish the emergence of SPACs as a way to spur clean tech investing, they shouldn’t. There are plenty of examples of emerging companies that scream quality and integrity. For example, Stem*, a leader in the energy storage optimization space, is now going public, pending SEC approval, via the Star Peak SPAC.
Public markets are receiving the SPAC with enthusiasm. Assuming the merger happens, Stem will be capitalized with greater than $450 million of cash to accelerate growth and drive impact. It’s an illustration of SPACs as a positive venture capital construct that is needed to make clean tech work and become a thriving sector.
As a long-time clean tech venture capitalist myself, it is interesting that public investment via the SPAC may be the correcting element for the clean tech VC construct. For years, I assumed that corporates would step up their M&A activity at premium valuations to solve this issue, but I’ve spent a long time waiting.
Judging by activity, corporates seem content to continue playing the still very important investor/nurturer role, versus the “owning” role. Regardless, capitalizing promising clean tech companies can only mean one thing: clean-tech-related impact is coming like never before as these companies require and use capital to scale.
New and more diverse approaches to finding and funding new, great clean tech companies are sorely needed. SPACs are going to be the tool needed to bring clean tech up to par with sectors such as healthcare. It’s a development that will benefit all of us.
*Stem is a Wind Ventures portfolio company.
Powered by WPeMatico