New EIP fund to invest in tech that banishes emissions and gives the planet a bit of a breather

With the catchy moniker Deep Decarbonization Frontier Fund, Energy Impact Partners has captured $200 million of commitments for its $350 million fund, doubling down on its commitments to transition the world toward a sustainable future. The fund targets early-stage technologies that accelerate the transition to net-zero greenhouse gas emissions.

The Frontier Fund is built on two principles; the new wave of interest from investors to help solve the world’s challenges in decarbonization, and the increasing demand for zero-carbon energy, products and goods.

“We are looking for audacious entrepreneurs taking big swings at big problems in climate tech,” said Shayle Kann, partner in the EIP Frontier Fund. “Over the last six years we have built an ecosystem and process to drive innovation in massive, mature and technically complex industries; nowhere is this skillset needed more than the drive toward deep decarbonization.”

The Frontier Fund has started deploying funds already, with a number of investments into startups focused on decarbonizing everything from power generation to fertilizer production. Examples the firm shared with me include Form Energy, which is making multi-day energy storage cheaper; Electric Hydrogen, which is pushing industrial-scale, renewable-powered hydrogen production; Nitricity, which is making a zero-emissions nitrogen fertilizer; and Sublime Systems, which is a zero-carbon cement. 

“We’ve been investing in climate tech since EIP was founded in 2016 — before it was called climate tech. This was the wilderness period; post-clean tech, pre-climate tech. We were calling it a bunch of different things,” says Kann. “There is a massive wave of innovation that is arriving on the market right now, ranging from new technologies, new services, new business models, all oriented around ways to decarbonize the various sectors of the economy that needs to be decarbonized. Climate tech is both so overwhelming and so exciting: It’s an overarching challenge that crosses sectors. The first core part of the thesis is that there is a wave of innovation coming. The second is that there will be an acceleration of market adoption of these solutions, driven by the fact that there is a growing recognition of the need to achieve net-zero greenhouse gas emissions by mid-century or earlier and that there is a long path to go from where we are today to that end goal. That is pulling in demand for all sorts of new solutions, from corporates, consumers, investors, advocates and all the stakeholders in the game. And so those two things make us bullish on the trajectory for climate tech.”

Clean energy firm Husk signs UN energy compact as it begins solar mini-grid expansion in Nigeria, rest of Africa

Husk Power Systems, a clean energy company that has been at the forefront of fueling rural electrification since 2008, is planning to launch 500 solar mini-grids in Nigeria over the next five years.

The renewable energy firm revealed the plans today when it announced the signing of a voluntary commitment with the United Nations to grow its energy market in sub-Saharan Africa and South Asia. The commitment is contained under the 24/7 Carbon-free Energy Compact, by leading energy buyers, suppliers, equipment manufacturers and governments. The compact represents a global effort to accelerate the uptake of carbon-free electricity as a way of averting the perilous effects of climate change.

The startup currently has operations in Nigeria, Tanzania and India (Uttar Pradesh and Bihar), where it has the ambitious goal of installing at least 5,000 mini-grids by 2030 and in the process make 1 million connections – half of which will be micro, small and medium-sized enterprises. Husk launched its first six mini-grids in Nigeria November last year, and it’s looking to have 100 mini-grids operational in the country within two years.

“Husk is committed to powering households, but our focus is first and foremost on micro, small and medium enterprises (MSMEs), and public institutions like health clinics and schools. MSMEs are the engine of economies in Africa, and powering existing small businesses and encouraging the formation of new MSMEs helps create the type of economic growth and social benefit that carries over to households by creating more opportunity and more jobs,” the company’s CEO and co-founder Manoj Sinha, told TechCrunch.

The renewable energy firm is planning to launch 500 mini-grids in Nigeria in a period of five years, and is eyeing the rest of Africa for expansion. Image Credits: Husk Power Systems

The firm is now exploring growth opportunities in the western, southern and eastern regions of Africa, while prioritizing the countries that have a “supportive regulatory environment” like its current markets. In Nigeria, for example, mini-grid operators are “largely free of permit requirements for either standalone off-grid mini-grids or interconnected mini-grids.”

The Nigerian Electricity Regulatory Commission Mini-Grid Regulation (2016) stipulates the transfer of assets and financial compensation for mini-grid operators in cases where the national grid finally connects the regions where private mini-grids are operational.

Husk is one of the companies participating in the Nigeria Electrification Project, which provides performance-based grants, a sort of capital subsidy, to mini-grid developers — part of the national effort to solve the country’s chronic power supply issues.

“In terms of policy frameworks and regulation, the states where Husk works in India (Uttar Pradesh and Bihar) have supportive policies. And the Nigerian mini-grid policy is actually based on those policies, with additional improvements. As a result, Nigeria is seen to have the most conducive policy in sub-Saharan Africa at the moment, which also includes their Nigeria Electrification Project (NEP), a program administered by the Rural Electrification Agency and funded by the World Bank to provide a capital subsidy to mini-grid developers and accelerate market development,” said Sinha.

The company plans to have additional technological and business model innovations, and the use of AI and IoT to remotely manage its fleet. Image Credits: Husk Power Systems

Nigeria and India are the company’s biggest markets at the moment. A supportive environment encourages investments from private players like Husk, and bridges the energy needs of households and small businesses, especially in rural areas.

Potential markets for Husk include Kenya, which at the start of this month, recognized mini-grid power systems granting them 50% tax allowance and other tax incentives enjoyed by large-scale generators.

“We welcome the Energy Compact commitments made by Husk Power and appreciate their leadership. It showcases the business opportunity presented by the global energy transition, and how private enterprises can drive accelerated action on ending energy poverty, expand renewable energy solutions for consumptive and productive load, and improve the adoption of energy efficiency solutions by end consumers,” said UN Energy programme manager, Kanika Chawla.

According to the World Bank, mini-grids have the potential to provide half a billion people with clean energy by the end of this decade (including those using overburdened grids) with the right policies in place. They also provide cleaner and cheaper alternatives of energy, which could transform the lives of millions of people living in darkness.

Sub-Saharan Africa accounts for 75% of the world’s population with no access to renewable energy solutions and electricity. Countries like South Sudan, Burundi, Chad, Malawi, Burkina Faso, Madagascar, Tanzania are among some of the least electrified countries in the world, and could benefit from clean energy from solar or wind.

“For off-grid communities, where diesel generation is the default source of electricity, the savings to our customers are significant. Businesses can expect about a 30% reduction in their monthly energy costs by switching from diesel to solar mini-grid electricity,” said Sinha.

Husk has to date raised $40 million from investors, including the Shell energy company and the Dutch Development bank FMO. The startup, which also provides financing for household and commercial appliances, was recognized last year by the 2021 Renewables Global Status Report as the only mini-grid developer with over 100 community sites in operation.

Kencko takes in new capital to shake up how we consume our fruits, vegetables

Kencko, the plant-based, blender-free smoothie company, raised $10 million in Series A funding to expand into new categories.

Existing investor Siddhi Capital led the round and was joined by both current and new investors, including Next View Ventures, Riverside Ventures, Silas Capital, Cheyenne Ventures, Shilling Capital, Indico Capital, Mission Point, Gather Ventures and Nextblue Ventures. The latest investment brings Kencko’s total funding to over $13.5 million.

We last checked in on Kencko — which means health in Japanese — back in 2019 when the company raised a $3.4 million seed round. At the time, it was selling its fruit drink with six flavor options and was poised to launch two new products.

Today, the company has over a dozen flavor options for its organic smoothies and four flavors for its gumdrops. Its freeze-dried technology provides a way for people to get 2.5 servings of fruits and vegetables, while its gumdrops have one serving. None of the products have refined sugars, sweeteners or artificial ingredients.

Kencko is carving out its niche in a crowded global health and wellness market that is poised to be worth $7 billion by 2030. Other companies are also attracting venture capital, for example, Athletic Greens, which created AG1, a powdered beverage designed to provide daily nutrition, announced $115 million Tuesday in new funding that boosts its pre-money valuation to $1.2 billion.

With the news of the investment, Kencko unveils its newest bowls product, a heated product which will be available later in February.

Tomás Froes, co-founder and CEO, Kencko

Tomás Froes, co-founder and CEO, Kencko

Kencko is also all about diverting fruits and vegetables from landfills and was able to ship over 10 million freeze-dried smoothies in the past year which the company says is the equivalent of around 660 tons of fresh produce. The brand is also on track to be completely carbon neutral in 2022.

The company has been growing on average over 500% per year, after just three years in business, Tomás Froes, co-founder and CEO, told TechCrunch via email. At the end of the year, Kencko had nearly 360,000 members, a growth of 173% over 2020.

Froes expects to deploy the new funds into scaling and optimizing Kencko’s supply chain and in-house manufacturing. The company just passed 100 employees, and he plans to double the team in the next 12 months.

“With this raise, we’re poised to increase what we like to call ‘Kencko moments’ for our members: to offer hassle-free nutrition throughout the day,” Froes added. “We’ll continue to be focused on helping more people transition to healthier habits by increasing their day-to-day intake of fruit and vegetables. We have a number of exciting new products we are working on, and you should expect us to begin dipping our toes in brick-and-mortar retail this upcoming year.”

Sylvera takes $32M to build trust in carbon offsetting ratings

Sylvera, a UK-based startup which uses machine learning technology to analyze a variety of visual data like satellite imagery and Lidar with the goal of boosting accountability and credibility around carbon offsetting projects, has fast followed a $5.8 million seed round in May last year by closing a $32M Series A.

The round was co-led by Index Ventures, which also led Sylvera’s seed, along with New York-based global private equity and VC firm Insight Partners. Also participating in the round: Salesforce Ventures, LocalGlobe and a number of angel investors.

The 2020-founded startup has now raised a total of $39.5M to date.

It says the Series A will be used to fuel further business expansion, including by further expanding the team and beefing up technical leadership.

Expanding the platform to include universal coverage of all offsets is also on the cards.

Commenting in a statement, Dr. Allister Furey, co-founder and CEO, said: “The market is one of the world’s most powerful tools against climate change. But we need reliable data to determine the quality of carbon offsets, in order to incentivize people to invest in the projects that are actually doing good — and to reward the project developers doing good work.

“That’s why we’re building the most accurate ratings for the Voluntary Carbon Market (VCM). We’ll use the funding to expand our coverage so that, with our ratings, corporate sustainability leaders, carbon traders, and policymakers will have clarity, confidence and choice when evaluating and investing in carbon projects. This is how you move billions of dollars into carbon abatement, sequestration and removal.”

Sylvera is not disclosing how many customers it has for its ratings — which it makes available via a web app and API — but says customers so far span a mix of industries, and include the likes of Delta Airlines, Cargill, CBL (an Xpansiv market), and Bain & Company.

“We have a mix of customers spanning corporate buyers, traders and exchanges,” it adds. “Our customers are typically large institutions who have made net zero commitments, and who are the biggest buyers of carbon credits in the market.”

While Sylvera’s ratings framework is proprietary, the startup says it’s committed to publishing details of how it makes project assessments to support its goal of becoming a leading trusted source of carbon offsetting data (importantly it does not trade carbon offsets itself to avoid direct conflicts).

Its pitch is “independent, in-depth and up-to-date assessments of carbon projects” — a worthy-sounding goal in a space rife with bogus offsets and greenwashing — albeit a claim that will need independent, in-depth and up-to-date external verification of the methods, data and algorithms involved if it’s to actually gain trust.

“We are working towards making Sylvera the most trusted source of truth on carbon offsets across all types of offsets within the next two years,” the startup notes when we ask about this, adding: “To be a trusted source of data, we must be transparent. This is why we will publish our ratings framework, our model accuracy assessment protocols, and underlying model accuracy figures. We will be also publishing peer-reviewed academic papers on our advanced biomass inference work later this year with our partner researchers at leading universities around the world.”

Commenting on the Series A round in a statement, Carlos Gonzalez-Cadenas, partner at Index Ventures and Sylvera board member, added: “We won’t stand a chance of reducing the world’s carbon emissions without a well-functioning carbon offset market. Billions are spent on carbon offsets every year, yet there is a lack of transparency and accountability and, therefore, a lack of trust. Trust is absolutely essential to reach the scale required to address the climate emergency. As an independent data provider, Sylvera has seen exponential growth in demand from some of the world’s largest companies, governments, and other entities. It highlights how critical their work is, and we’re excited to expand our partnership with Sylvera.”

Dublin’s Exergyn pulls in $35M Series A for solution which replaces GHG-causing refrigerants

Dublin-based Exergyn replaces refrigerants with solid materials, thus reducing the output of greenhouse gases. The technology could be applicable in data centers.

The industrial-grade cleantech company has now raised a $35 million (€30 million) Series A round led by Mercuria, an energy and commodities company, and Lacerta Partners, a family office-backed fund. Also participating was Prague-based private equity and venture capital firm McWin.

Exergyn has a product called a solid-state shape memory alloy (SMA) which it claims could lower carbon emissions in industries such as heating, ventilating, air-conditioning, refrigeration (HVACR), automotive and aerospace. The HVACR industry accounts for more than 10% of the global CO2 emissions.

These SMAs contract and relax as they absorb and release heat, doing away with refrigerants.

According to the Montreal Protocol, the number one solution to global warming is to remove gases that have global warming potential.

In terms of competitors, the University of Maryland and the University of Ljubljana in Slovenia are looking at the space, but commercial entities operating in the same space are thin. Magnetocaloric is like an expensive cousin of SMA, but it is generally considered too expensive.

Commenting on the Series A announcement, co-founder and managing director Dr. Kevin O’Toole said: “By joining forces with thought leaders such as Mercuria, Lacerta, and McWin, we can expand our offering into multiple new and exciting verticals.”

Speaking about the investment, David Haughie, managing director at Mercuria noted: “Mercuria’s ambition is for these SMAs to negate the need for refrigerants in traditional sectors such as the cooling and refrigeration industry, allowing even more cost-efficient operation, with zero HFC-driven impact on the environment.”