Raj Kapoor, the former chief strategy officer and head of business at Lyft, doesn't think asking consumers to change their ways is an effective strategy when it comes to saving the planet. He and Josh Felser, the co-founder of Freestyle Capital, are betting that the future of climate tech is in the enterprise.
The enterprise is changing its behavior. By the end of 2021, the fortune 500 will all have the same goals, and 65% of the global GDP will be net-zero carbon emissions. Amazon dipped back into its climate fund to back a technology upstart for electric vehicles, as it made efforts to have net-zero carbon operations by 2040.
To take advantage of the awareness, Kapoor and Felser have spent the last year working on Climactic, a venture capital firm that wants to invest explicitly in startups working to fix the climate from an enterprise angle. The investors have used personal money to back eleven companies. They did not comment on any plans to raise money, but they did not file any paperwork with the SEC indicating plans to raise money.
Felser said that they are looking for companies that can help enterprises hit their net zero emissions goals.
Clean tech 1.0 was about scientific innovation, while clean tech 2.0 is about entrepreneurs creating vehicles or software that is ready to go to market sooner. The shift means that Climactic is keeping busy, investing in everything from technology hoping to measure and analyze carbon emissions, software that leads to more efficient supply chain and mobility tech for both transportation and goods.
He said that funding software doesn't mean we shouldn't be. Software is going to help in this battle.
After the ride-sharing giant sold its self-drive unit to Toyota for $550 million, the managing director of the company left. Felser launched an app #climate that aggregates the climate change actions from leading nonprofits and matches them with social media Influencers before founding Freestyle Capital. The realization that nonprofits were not going to change the planet so there had to be a for-profit, sustainable solution was one of the catalysts that led to the entrepreneurs teaming up.
Climate knowledge is light compared toOG climate investors.
Felser said that entrepreneurs are mostly asking for Climactic for enterprise sales, marketing, and pricing help, not detailed explanations on the bounds of cellular meat commercialization. A number of consultants who have been head of sales and marketing at other companies have been hired by the firm to help market revolutionary technology to the general public.
We bring a knowledge of sales, enterprise sales and marketing, product expertise, and general CEO coaching. That is missing from the climate venture community.
Chris Sacca's Lowercarbon Capital just landed an $800 million fund, 2150's new $312 million fund, and Wavemaker Impact's launch, all in a time when climate-tech focused funds are launching. Climate tech startups want to hone in on telling stories through public relations guidance, and that's something that a limited partner in VSC Ventures, like Kapoor, wants to help them do. On the other side of the table, Rivian, a recently public EV manufacturer, raised over $2 billion in one of the largest climate tech deals of the quarter, while the other side of the table was home to a battery startup launched by a co-founder ofTesla.
Climate tech investors have to wade through deceptive marketing spin that says products are sustainable when they actually aren't.
Felser said that the word sustainable was appearing in a lot of decks. He spoke to the CEO of a company that creates material for more durable clothing. The manufacturing process feels like a sustainable marketing plan, and the source of the material is not sustainable. The co-founders of the offset world are looking for red flags in startups that don't have the right verification of offsets.
The noise means that the first bets will face due diligence. The Climactic portfolio to date includes Orca Mobility, a compact autonomously delivered robot company, and Muon Space, which is building multi-modal satellite remote sensing systems.
