New climate tech fund seeks to support entrepreneurs solving climate challenges

By: Gretchen Fauske

Read the full article on Alaska Journal

Rob Roys (right), Launch Alaska’s Chief Innovation Officer, recently visited the Northwest Arctic Borough’s solar and energy storage project in Shungnak. Launch Alaska portfolio companies Blue Planet Energy and Ageto energy provided the battery energy storage system and microgrid control system, respectively, that will enable Alaska Village Electric Cooperative’s diesel-based power system to operate for hours at a time on 100 percent renewable energy. (Photo/Courtesy/Launch Alaska)

A new wave of climate technology venture capital funds emerged during the COVID-19 pandemic, including one with ties to Alaska.

The recently-announced Earthshot Ventures is spinning out from Hawaii and California-based Elemental Accelerator to invest in entrepreneurs solving climate challenges around the world. The fund raised $60 million from entities like McKinley Alaska Private Investment, who is joined by well known organizations like Emerson Collective, Microsoft, Impact Engine, and others.

Similar funds were also launched over the last year and a half, including Amazon’s $2 billion Climate Pledge venture fund, Microsoft’s $1 billion Climate Innovation Fund, and Unilever’s €1 billion climate fund. These funds are investing in startups developing technologies and services that will speed up the transition to a low-carbon economy.

Locally, Anchorage-based Launch Alaska, a climate technology accelerator that focuses on deployment of that technology in Alaska, has partnered with Earthshot Ventures to provide dealflow and access to their customer networks.

This kind of partnership is a new, more integrated approach; Earthshot Ventures combines the best parts of the accelerator model and the fund model to create a supportive environment for scaling companies to fight climate change. 

Isaac Vanderburg, CEO of Launch Alaska, says it’s crucial for Alaska to be at the forefront of the energy transition, and participating in this fund will help to do just that.

“Our state has had several decades of miraculous economic progress thanks to oil and gas, but the writing is on the wall: it’s time for us to become a new kind of energy state,” Vanderburg said.

“Fortunately, Alaska is developing a reputation as a world class proving ground for some of the globe’s most exciting climate tech companies. And now, we can connect the companies we work with to Earthshot Ventures for funding.” 

Vanderburg said that although many of the companies that participate in Launch Alaska’s program are from outside Alaska, they spend money in the state as they work on their projects and some of them are opening satellite offices, hiring Alaskans, or buying homes.

As Launch Alaska continues to operate, he hopes more and more companies will invest in the state for the long term. Additionally, the fund may be a resource to Alaska startups working in climate tech. 

“Startups have the opportunity to change the trajectory of a state’s entire economy, and the companies we work with have both the ability and the aspiration to grow to thousands of jobs,” Vanderburg said. “If we can support these companies’ growth, they will offer a way for us to continue to be an energy state, just with a different kind of energy economy than we’ve grown accustomed to.”

Companies in Launch Alaska’s current portfolio include Ampaire Inc, a startup developing electric aircraft from short-haul cargo to passenger transport; DASH Systems, an airdrop delivery solution tailored for remote areas; 60Hertz, an Alaska-based maintenance software to manage and monitor grid-tied and off-grid assets; and Dynamhex, a technology platform for companies, municipalities, and utilities to meet climate targets with data-driven solutions.

Climate technology companies backed by venture capital raised $14.2 billion globally between January and June of 2021, and the amount of venture capital funding invested in climate technology has grown a whopping 3,750 percent since 2013.

Startups seek venture funding to not just inject capital into their businesses, but also for industry connections and access to experts as they scale their companies. 

“That’s part of the special sauce we offer,” Vanderburg said. “By bringing together a venture capital fund with a deployment accelerator, we’re able to help companies get traction, access funding and tap into our network within the climate tech community.”

He expects that a number of the companies Launch Alaska works with will be interested in seeing if they’re a fit for the new fund.

Mike Jackson, Managing Partner for Earthshot Ventures, hopes they will be. 

“Launch and Elemental both know what it takes to operate in the real world, how projects get funded, how to interact with stakeholders, and how to collaborate with large energy companies,” Jackson said. “They also help entrepreneurs think through the impact they might make on the communities they serve, and how they can benefit them along with the environment by providing equity and access to clean energy.” 

He said that Alaska occupies a unique position as a resource extraction state on the front lines of climate change, and that the oil and gas industry will be a big part of solving the problem.

Under pressure from their governments, investors, and the public, oil companies like BP and Royal Dutch Shell have committed to reducing their emissions and have been selling off oil fields while investing in renewable energy. 

Other companies, like Walmart, FedEx, Coca-Cola, Alaska Airlines, and Best Buy are committed to going carbon neutral by 2040. This means that they will rely entirely on renewable energy or offset the burning of fossil fuels with the capture and storage of carbon dioxide, and will be looking to climate technology companies to help them do it.

Vanderburg said these companies have recognized the same thing Launch Alaska, Elemental Excelerator, and Earthshot Ventures have: 

“The energy transition is either going to happen to us, or we can lead it,” he said. “Deploying and scaling the technologies to combat climate change is the biggest economic opportunity of our generation.”

Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Updated: 09/20/2021 – 11:55am