Automakers have battery anxiety, so they’re taking control of the supply

Battery joint ventures have become the hot must-have deal for automakers that have set ambitious targets to deliver millions of electric vehicles in the next few years.

It’s no longer just about securing a supply of cells. The string of partnerships and joint ventures show that automakers are taking a more active role in the development and even production of battery cells.

Automakers are taking a more active role in the development and even production of battery cells.

And the deals don’t appear to be slowing down. Just this week, Mercedes-Benz announced its $47 billion plan to become an electric-only automaker by 2030. Securing its battery supply chain by expanding existing partnerships or locking in new ones to jointly develop and produce battery cells and modules is a critical piece of its plan.

Mercedes, like other automakers, is also focused on developing and deploying advanced battery technology. In addition to setting up eight new battery plants to supply its future EVs, the German automaker said it was partnering with Sila Nano, the Silicon Valley battery chemistry startup that it has previously invested in, to increase energy density, which should in turn improve range and allow for shorter charging times.

“This follows a trend that we’ve seen of automakers realizing how critical the battery is and taking more control of the production of the cells in order to ensure their own supply,” Sila Nano CEO Gene Berdichevsky said in a recent interview. “Like if you’re VW, and you say, ‘We’re going to go 50% electric by whatever year,’ but then the batteries don’t show up, you’re bankrupt, you’re dead. Their scale is so big that even if their cell partners have promised them to deliver, automakers are scared that they won’t.”

Tesla, BMW and Volkswagen were early adopters of the battery joint-venture strategy. In 2014,Tesla and Panasonic signed an agreement to build a large battery manufacturing plant, or a gigafactory as everyone is now calling it, in the U.S. and have worked together since. BMW began working with Solid Power in 2017 to create solid-state batteries for high-performance EVs that could potentially lower costs by requiring less safety features than lithium-ion batteries.

In addition to its partnership with Northvolt, VW is also in talks with suppliers to secure more direct access to supplies like semiconductors and lithium so it can keep its existing plants running at full speed.

Now the rest of the industry is moving to work with battery companies, to share knowledge and resources and essentially become the manufacturer.

Pivot Bio rakes in $430M round D as modified microbes prove their worth in agriculture

Pivot Bio makes fertilizer — but not directly. Its modified microorganisms are added to soil and they produce nitrogen that would otherwise have to be trucked in and dumped there. This biotech-powered approach can save farmers money and time and ultimately may be easier on the environment — a huge opportunity that investors have plowed $430 million into in the company’s latest funding round.

Nitrogen is among the nutrients crops need to survive and thrive, and it’s only by dumping fertilizer on the soil and mixing it in that farmers can keep growing at today’s rates. But in some ways we’re still doing what our forebears did generations ago.

“Fertilizer changed agriculture — it’s what made so much of the last century possible. But it’s not a perfect way to get nutrients to crops,” said Karsten Temme, CEO and co-founder of Pivot Bio. He pointed out the simple fact that distributing fertilizer over a thousand — let alone ten thousand or more — acres of farmland is an immense mechanical and logistical challenge, involving many people, heavy machinery and valuable time.

Not to mention the risk that a heavy rain might carry off a lot of the fertilizer before it’s absorbed and used, and the huge contributions of greenhouse gases the fertilizing process produces. (The microbe approach seems to be considerably better for the environment.)

Yet the reason we do this in the first place is essentially to imitate the work of microbes that live in the soil and produce nitrogen naturally. Plants and these microbes have a relationship going back millions of years, but the tiny organisms simply don’t produce enough. Pivot Bio’s insight when it started more than a decade ago was that a few tweaks could supercharge this natural nitrogen cycle.

“We’ve all known microbes were the way to go,” he said. “They’re naturally part of the root system — they were already there. They have this feedback loop, where if they detect fertilizer they don’t make nitrogen, to save energy. The only thing that we’ve done is, the portion of their genome responsible for producing nitrogen is offline, and we’re waking it up.”

Other agriculture-focused biotech companies like Indigo and AgBiome are also looking at modifying and managing the plant’s “microbiome,” which is to say the life that lives in the immediate vicinity of a given plant. A modified microbiome may be resistant to pests, reduce disease or offer other benefits.

Illustration showing stages of modifying and deploying nitrogen-producing microbes.

Image Credits: Pivot Bio

It’s not so different from yeast, which as many know from experience works as a living rising agent. That microbe has been cultivated to consume sugar and produce a gas, which leads to the air pockets in baked goods. This microbe has been modified a bit more directly to continually consume the sugars put out by plants and put out nitrogen. And they can do it at rates that massively reduce the need for adding solid fertilizer to the soil.

“We’ve taken what is traditionally tons and tons of physical materials, and shrunk that into a powder, like baker’s yeast, that you can fit in your hand,” Temme said (though, to be precise, the product is applied as a liquid). “All of a sudden managing that farm gets a little easier. You free up the time you would have spent sitting in the tractor applying fertilizer to the field; you’ll add our product at the same time you’d be planting your seeds. And you have the confidence that if a rainstorm comes through in the spring, it’s not washing it all away. Globally about half of all fertilizer is washed away… but microbes don’t mind.”

Instead, the microbes just quietly sit in the soil pumping out nitrogen at a rate of up to 40 pounds per acre — a remarkably old-fashioned way to measure it (why not grams per square centimeter?), but perhaps in keeping with agriculture’s occasional anachronistic tendencies. Depending on the crop and environment, that may be enough to do without added fertilizers at all, or it might be about half or less.

Whatever the proportion provided by the microbes, it must be tempting to employ them, because Pivot Bio tripled its revenue in 2021. You might wonder why they can be so sure only halfway through the year, but as they are currently only selling to farmers in the northern hemisphere and the product is applied at planting time early in the year, they’re done with sales for the year and can be sure it’s three times what they sold in 2020.

The microbes die off once the crop is harvested, so it’s not a permanent change to the ecosystem. And next year, when farmers come back for more, the organisms may well have been modified further. It’s not quite as simple as turning the nitrogen production on or off in the genome; the enzymatic pathway from sugar to nitrogen can be improved, and the threshold for when the microbes decide to undertake the process rather than rest can be changed as well. The latest iteration, Proven 40, has the yield mentioned above, but further improvements are planned, attracting potential customers on the fence about whether it’s worth the trouble to change tactics.

The potential for recurring revenue and growth (by their current estimate they are currently able to address about a quarter of a $200 billion total market) led to the current monster D round, which was led by DCVC and Temasek. There are about a dozen other investors, for which I refer readers to the press release, which lists them in no doubt a very carefully negotiated order.

Temme says the money will go toward deepening and broadening the platform and growing the relationship with farmers, who seem to be hooked after giving it a shot. Right now the microbes are specific to corn, wheat and rice, which of course covers a great deal of agriculture, but there are many other corners of the industry that would benefit from a streamlined, enhanced nitrogen cycle. And it’s certainly a powerful validation of the vision Temme and his co-founder Alvin Tamsir had 15 years ago in grad school, he said. Here’s hoping that’s food for thought for those in that position now, wondering if it’s all worth it.

Rise Gardens grows with $9M Series A to help anyone be an indoor farmer

As more consumers embrace plant-based diets and sustainable food practices, Rise Gardens is giving anyone the ability to have a green thumb from the comfort of their own home.

The Chicago-based indoor, smart hydroponic company raised $9 million in an oversubscribed Series A round, led by TELUS Ventures, with existing investors True Ventures and Amazon Alexa Fund and new investor Listen Ventures joining in. The company has a total of $13 million in venture-backed investments since Rise was founded in 2017, founder and CEO Hank Adams told TechCrunch.

Though he began in 2017, Adams, who has a background in sports technology, said he spent a few years working on prototypes before launching the first products in 2019. Rise’s IoT-connected systems are designed to grow vegetables, herbs and microgreens year-round.

Customers can choose between three system levels and get started with their first garden for about $300.

There is a “kind of joyousness” in being able to grow something, but people are looking for assistance because they don’t want to get into a hobby that will become demanding or stressful, Adams said. As a result, Rise’s accompanying mobile app monitors water levels and plant progress, then alert users when it’s time to water, fertilize or care for their plants.

“People are paying attention to food, and they care about what they eat,” he added. “Then the global pandemic played a part in this, with people leaning into growing their own food.”

In fact, customers leaned into growing food so much that Rise Gardens saw its sales eclipse seven figures in 2020, and gardens sold out three times during the year. Customers purchased close to 100,000 plants and have harvested 50,000.

The company estimates it helped keep more than 2,000 pounds of food from being wasted and saved 250,000 gallons of water since launching in 2019.

The concept of an indoor farm is not new. Incumbents include AeroGarden, AeroGrow, which was acquired by Scotts-Miracle Gro last November, and Click & Grow. Rise is among a new crop of startups that have raised funds that include Gardyn.

However, Rise Gardens is differentiating itself from those competitors by making its gardens from powder-coated metals and glass and are designed to be a focal point in the room. It is also offering ways for people to experiment with their gardens.

“We wanted something that would be flexible because once you have mastered a hobby, you will get bored,” he added. “You can start at one level and they swap out tray lids to grow more densely. We have a microgreens kit you can add, or add plant supports for tomatoes and peppers. You can also build a trellis to vine snap peas.”

Adams will focus the Series A dollars into product development, inventory, manufacturing, expansion into new markets and building up the team, especially in the areas of customer service and marketing. Rise has about 25 employees and plans to bring on another eight this year.

In addition, Rise Gardens’ products will soon be available on Amazon — its first channel outside of its website. The company is also expanding into schools in what Adams calls “version 2.0” of the school garden.

When Rich Osborn, president and managing partner of TELUS Ventures, evaluated the indoor garden space, he told TechCrunch that Adams and his team rose to the top of the list because of their background, data experience and syndication with Amazon.

Not only was consumer demand there for these kinds of products, but the sustainability and social impact created from these kinds of investments couldn’t be overemphasized, he said.

Nishan Majarian, co-founder and CEO of TELUS Agriculture, said he sees a future where there is a spectrum of food growth, and crop management will be at the plant level.

“Ever since Climate Corp. was acquired by Monsanto, there has been a massive influx into agriculture to get to the next billion-dollar exit,” Majarian added. “Agrifood is the last segmented supply chain. Every crop is different, every market is different. That makes it local, complex and fertile soil — pun intended — for startups who get capital to solve those issues and scale.”

 

What the growing federal focus on ESG means for private markets

The increasing regulation of ESG (environmental, social, governance) disclosure reporting may have started in the public markets, but will almost certainly have downstream effects for private market actors — for founders, companies and investors.

Since his confirmation as the chair of the U.S. Securities and Exchange Commission in April, Gary Gensler has made reforming ESG disclosures concerning climate change risk and human capital a top priority. The SEC’s regulatory agenda confirms as much. And Gensler is not alone in his focus on ESG at the federal level.

President Joe Biden issued an executive order encouraging regulators to assess climate-related financial risk. At the end of March, Treasury Secretary Janet Yellen wrote on Twitter that “our future livelihoods … depend on the financial sector to build a more sustainable and resilient economy.” Congress is considering measures that would require increased ESG disclosures, including the Improving Corporate Governance Through Diversity Act, the Diversity and Inclusion Data Accountability and Transparency Act and the Climate Risk Disclosure Act.

This renewed federal focus on ESG issues will bolster the SEC’s effort to create disclosure practices for public companies and mutual funds. Regardless of whether these federal policies around ESG come to pass, they reflect a momentum that will almost certainly impact private markets:

  • Firms that want to go public — whether via SPAC, direct listing or traditional IPO — may have to seriously consider board diversity or environmental reporting in conjunction with — or well in advance of — their debuts.
  • Private companies seeking to align with public companies as vendors or partners may be expected to meet specific ESG requirements before the engagement.
  • Startup founders and venture funds raising capital may work to maintain the largest target market by proactively scoping ESG engagements to ensure they meet criteria for investors who may have their own ESG-focused investment requirements.

In his confirmation hearing before the Senate in early March, Gensler said, “Markets — and technology — are always changing. Our rules have to change along with them.”

The federal government is moving to increase regulation around ESG disclosure requirements with the goals of establishing greater transparency and metrics for public companies.

The federal government is moving to increase regulation around ESG disclosure requirements with the goals of establishing greater transparency and metrics for public companies. These requirements are a response to the changing markets — demands from consumers, scrutiny from investors and a general insistence for higher corporate standards from society at large.

Private markets aren’t immune to these forces. Already, three-quarters of investors in a 2020 survey said it was very important to measure the success of sustainability initiatives, but they also said there’s been a lack of clarity on how to define and measure outcomes.

To be sure, private markets are not headed toward full-scale adoption of ESG regulations. They will not be subject to the same reporting or disclosures framework as their public counterparts. Not today, and possibly not for some time.

But we may begin to see private investors, funds and companies adapting to get ahead of ESG regulation and position themselves to effectively operate in a new — albeit adjacent — regulatory environment. In their case, the rules may not change — but the game could.

Revel turns to software to keep its e-moped fleet powered without straining NYC’s grid

Revel is turning to an app that gamifies energy use to keep its fleet of more than 3,000 electric mopeds charged without putting a strain on New York City’s power grid.

Electricity is the key ingredient for the Brooklyn-based startup, which has more recently expanded beyond shared electric mopeds and into e-bike subscriptions, fast-charging infrastructure and even an all EV ride-hailing service. It’s not just about accessing power; managing when that power is tapped will be essential for Revel to keep its operational costs as low as possible.

That’s where Logical Buildings comes in. The software company has developed GridRewards, an app that helps customers lower their monthly energy consumption and earn cash rewards in the process. The app’s “virtual power plant” software will help Revel dynamically adjust the charging schedule of its fleet to support NYC’s electrical grid resilience, according to a statement from the companies.

“As we continue to expand our electric mobility products, we plan to be an asset to the grid rather than a liability,” said Paul Suhey, Revel COO & co-founder, in a statement. “Our EV infrastructure and charging operations can play a major role in helping NYC transition to a cleaner electric grid.”

EV adoption and shared micromobility services are on the rise, so many industry players are finding ways to transfer energy between batteries and the grid. EV battery swapping company Ample says its swapping stations can be used to generate backup power in case of an emergency, and even Ford’s new pickup truck, the F-150 Lighting, can power your home in the event of an outage.

In Revel’s case, the company hopes to provide services to the grid like “demand response” operations, where charging stations shed a load when needed in order to provide immediate relief to the grid, something the company just did in NYC. During the heat wave of the week of June 28, the mobility company adjusted its fleet charging schedule to avoid peak demand times.

Revel says avoiding peak demand times also helps to create a cleaner grid because when energy is in high demand, the sources of power generation emit twice as much carbon dioxide per unit of electricity and 20 times as much nitrogen oxides.

Revel also owns a fleet of Teslas for an all-EV ridehailing service that has had to halt its services due to a cap placed on new for-hire vehicles in the city. But at present, the company will only be implementing this technology with its e-mopeds.

“As transportation electrifies, it is imperative that electric mobility companies schedule their charging operations to promote grid resiliency,” said David Klatt, Logical Buildings’ VP of operations, in a statement. “Revel is taking necessary steps to ensure it is a leader in intelligent charging operations, paving the way for the smooth electrification and decarbonization of NYC.”