by tyler | Apr 3, 2024 | Tech
Hello, and welcome back to Equity , a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. This is our Wednesday show, when we take a moment to dig into a raft of startup and venture capital news. No big tech here!
Keep in mind that Y Combinator’s demo day kicks off today, so we’re going to be snowed-under in startup news the rest of the week. Consider today’s show the calm before the storm.
On the podcast this morning we have BlaBlaCar’s new credit facility and how it managed to land it, how PipeDreams could be onto a new model of startup construction , GoStudent’s rebound and profitability , Hailo’s chip business and massive new funding round , and the two new brands that GGV calls home as it divides up its operations on both sides of the Pacific Ocean.
Equity is TechCrunch’s flagship podcast and posts every Monday, Wednesday and Friday, and you can subscribe to us on Apple Podcasts , Overcast , Spotify and all the casts.
You also can follow Equity on X and Threads , at @EquityPod.
For the full interview transcript, for those who prefer reading over listening, read on, or check out our full archive of episodes over at Simplecast .
by tyler | Apr 1, 2024 | Tech
There are a lot of ways to describe what’s happening to the Earth’s climate: Global warming. Climate change. Climate crisis . Global weirding . They all try to capture in different ways the phenomena caused by our world’s weather systems gone awry. Yet despite a thesaurus-entry’s worth of options, it’s still a remarkably difficult concept to make relatable.
Researchers at MIT might finally have an answer, though. Instead of predicting Category 5 hurricanes or record heat days, they’ve developed a tool that allows people to see how many “ outdoor days ” their region might experience from now through 2100 if carbon emissions growth remains unchecked.
The results might be alarming or comforting, depending on where you live.
For people in California or France or Germany , things don’t look so bad. The climate won’t be quite as hospitable in the summers, but it’ll grow a little bit more clement in the spring and fall, adding anywhere from a few days to nearly a month of outdoor weather compared with historical records. The U.K. will be even better off, gaining 40 outdoor days by the end of the century.
Not everyone will come out ahead, though. Some temperate places like New York , Massachusetts , China and Japan will lose a week or more of outdoor days. Elsewhere, the picture looks even more dire. Illinois will lose more than a month of outdoor days by the 2080s as the summers grow unbearably hot. Texas will lose a month and a half for the same reason.
Yet it’s the countries with some of the most vulnerable populations that’ll suffer the most (as scientists have been warning). Nigeria’s summers will grow even hotter and longer, lopping off nearly two months of outdoor days. India will lose almost two and a half months.
It doesn’t have to be that way. Even if the world fails to reach net zero carbon emissions by 2050 — but still manages to by 2070 — the situation will improve dramatically. Both Nigeria and India would only lose one month of outdoor days, and more northerly regions would retain some of their added outdoor days.
The MIT tool is a relatable application of a field of study known as climate scenario analysis, a branch of strategic planning that seeks to understand how climate change will impact various regions and demographics. It’s not a new field, but as advances in computational power have fostered more sophisticated climate models, it has become more broadly applicable than before.
A range of startups are using this relatively newfound predictive capability to help give shape to an uncertain future.
Many startups in the space are focused on tackling that uncertainty for investors, lenders and insurers. Jupiter Intelligence , Cervest and One Concern all focus on those markets, supplying customers with dashboards and data feeds that they can tailor to regions or even assets of interest. The startups also determine the risk of flood, wildfire and drought, and they’ll deliver reports detailing risk to assets and supply chains. They can also crank out regulatory disclosures, highlighting relevant climate risks.
Investors and insurers are sufficiently worried about how climate change will affect assets and supply chains that these startups have attracted some real cash. Jupiter intelligence has raised $97 million, according to PitchBook, while Cervest has raised $43 million and One Concern has brought in $152 million.
While major financial institutions are an obvious customer base for climate forecasting companies, other markets exposed to the outdoors are also in need of solutions.
ClimateAI is targeting agriculture, including agribusiness, lenders, and food and beverage companies, all of which have watched as droughts, floods and storms have decimated crops. As a result, water risk assessment is a key feature of ClimateAI’s forecasts, though it provides other weather and climate-related data, too. The startup has raised $37 million so far, per PitchBook.
Sensible Weather is working on markets that are a little closer to home for most of us. It provides insurance for people embarking on outdoor events and activities, from live concerts to camping and golfing. It works with campgrounds, golf courses, live event operators and more, allowing them to give customers an option to insure their outing against inclement weather. It’s an approach that’s landed the startup $22 million in funding, according to PitchBook.
As more businesses and consumers become aware of how climate change is affecting their lives, their demand for certainty will create a wealth of new markets that will offer these startups and their peers ample opportunity to expand. Climate scenario analysis, once a niche limited to academic labs and insurance companies, appears poised to enter the mainstream.
by tyler | Apr 1, 2024 | Tech
There are a lot of ways to describe what’s happening to the Earth’s climate: Global warming. Climate change. Climate crisis . Global weirding . They all try to capture in different ways the phenomena caused by our world’s weather systems gone awry. Yet despite a thesaurus-entry’s worth of options, it’s still a remarkably difficult concept to make relatable.
Researchers at MIT might finally have an answer, though. Instead of predicting Category 5 hurricanes or record heat days, they’ve developed a tool that allows people to see how many “ outdoor days ” their region might experience from now through 2100 if carbon emissions growth remains unchecked.
The results might be alarming or comforting, depending on where you live.
For people in California or France or Germany , things don’t look so bad. The climate won’t be quite as hospitable in the summers, but it’ll grow a little bit more clement in the spring and fall, adding anywhere from a few days to nearly a month of outdoor weather compared with historical records. The UK will be even better off, gaining 40 outdoor days by the end of the century.
Not everyone will come out ahead, though. Some temperate places like New York , Massachusetts , China , and Japan will lose a week or more of outdoor days. Elsewhere, the picture looks even more dire. Illinois will lose more than a month of outdoor days by the 2080s as the summers grow unbearably hot. Texas will lose a month and a half for the same reason.
Yet it’s the countries with some of the most vulnerable populations that’ll suffer the most (as scientists have been warning). Nigeria’s summers will grow even hotter and longer, lopping off nearly two months of outdoor days. India will lose almost two and a half months.
It doesn’t have to be that way. Even if the world fails to reach net zero carbon emissions by 2050 — but still manages to by 2070 — the situation will improve dramatically. Both Nigeria and India would only lose one month of outdoor days, and more northerly regions retain some of their added outdoor days.
The MIT tool is a relatable application of a field of study known as climate scenario analysis, a branch of strategic planning that seeks to understand how climate change will impact various regions and demographics. It’s not a new field, but as advances in computational power have fostered more sophisticated climate models, it has become more broadly applicable than before.
A range of startups are using this relatively newfound predictive capability to help give shape to an uncertain future.
Many startups in the space are focused on tackling that uncertainty for investors, lenders, and insurers. Jupiter Intelligence , Cervest , and One Concern all focus on those markets, supplying customers with dashboards and data feeds that they can tailor to regions or even assets of interest. The startups also determine the risk of flood, wildfire, and drought, and they’ll deliver reports detailing risk to assets and supply chains. They can also crank out regulatory disclosures, highlighting relevant climate risks.
Investors and insurers are sufficiently worried about how climate change will affect assets and supply chains that these startups have attracted some real cash. Jupiter intelligence has raised $97 million, according to PitchBook, while Cervest has raised $43 million and One Concern has brought in $152 million.
While major financial institutions are an obvious customer base for climate forecasting companies, other markets exposed to the outdoors are also in need of solutions.
ClimateAI is targeting agriculture, including agribusiness, lenders, and food and beverage companies, all of which have watched as droughts, floods, and storms have decimated crops. As a result, water risk assessment is a key feature of ClimateAI’s forecasts, though it provides other weather and climate related data, too. The startup has raised $37 million so far, per PitchBook.
Sensible Weather is working on markets that are a little closer to home for most of us. It provides insurance for people embarking on outdoor events and activities, from live concerts to camping and golfing. It works with campgrounds, golf courses, live event operators, and more, allowing them to give customers an option to insure their outing against inclement weather. It’s an approach that’s landed the startup $22 million in funding, according to PitchBook.
As more businesses and consumers become aware of how climate change is affecting their lives, their demand for certainty will create a wealth of new markets that will offer these startups and their peers ample opportunity to expand. Climate scenario analysis, once a niche limited to academic labs and insurance companies, appears poised to enter the mainstream.
by tyler | Mar 20, 2024 | Tech
Hundreds of climate-related startups have been founded in recent years, but for Casper co-founder Philip Krim, that’s not nearly enough.
“We need a lot more zero-to-one founders in this ecosystem,” he told TechCrunch. Relative to other industries, “very few folks are doing it in the climate space.”
Krim, who launched Casper in 2014, is no stranger to entrepreneurship. After taking the mattress company public in 2020 and then selling it to private equity in 2021, he turned his attention to incubating new businesses, including Haven , which helps people install home batteries. “I ultimately got bit by the climate bug and fell in love with the space.”
Through that journey, Krim met Evan Caron, a former commodity trader, and then Sharo Atmeh, a lawyer and portfolio manager. They quickly realized that they all wanted to foster the sort of fast-moving, asset-light, entrepreneurial ethos that has gripped other parts of the tech world.
One path, which is particularly well-trodden, is to start a venture fund. The trio felt they had plenty of ideas themselves, but not enough time to turn them into a reality. Instead of launching a VC fund, they’re starting with an incubator called Montauk Climate , TechCrunch has exclusively learned.
The incubator model isn’t new, but there aren’t many that are dedicated to climate. Some incubators accept founders and help them shape companies very early in their development, while others, like Atomic , Idealab and Flagship Pioneering , take the startup studio approach and conceive of the businesses themselves. Montauk Climate is one of the latter.
“We author the businesses that we want to create,” Krim said. “We’re not looking at other people’s ideas. We’re really putting together the idea, and then we bring in talent to help run that team.”
Montauk Climate is led by CIO Evan Caron, CEO Philip Krim and COO Sharo Atmeh. Image Credits: Montauk Climate
Montauk Climate is led by CIO Evan Caron, CEO Philip Krim and COO Sharo Atmeh. Image Credits: Montauk Climate
Many climate tech companies focus on problems that require hardware to solve. The Montauk team is taking a different approach. The new incubator wants to create businesses that complement those hardware-heavy efforts while also playing to their strengths around energy, software and infrastructure.
“The core science projects are either on their way or have been invented,” Atmeh said, citing wind, solar, hydrogen and geothermal. “Those kinds of bricks are now in place, and there’s a lot of room to kind of generate the mortar that needs to fit between those bricks to create connectivity between consumers, between utilities and renewables, and to help operationalize what is now a really fragmented system.”
Montauk Climate is launching with $8.5 million, led by a $7 million investment from Sheel Tyle, managing partner at Amplo. The firm will explore business opportunities in house, and once they feel like an opportunity is ripe, they’ll hire a team and commit some initial capital to the company.
“Once we have a team, once we have a business plan that we feel is really vetted and then fully underwritten, we’ll then go out to venture firms that we have relationships with to fund that business and spin it out,” Krim said. Montauk Climate will remain shareholders in its spinout companies and have seats on their boards.
The team is focusing on a handful of sectors, Caron said, including energy use in data centers, electrification incentives, weather data aggregation and insurance. Expect them to be software or platform plays. The insurance idea is the furthest along, Krim said, with a veteran industry CEO in place and a model that focuses on helping business owners manage risks from climate change.
“We should have a handful of incubated businesses launched in Q2, Q3 of this year,” he said. As the number of incubated companies expands, Montauk Climate expects to raise its own venture fund to help support them.
If those new businesses can take root, they’ll be growing in a potentially fertile landscape. Low-carbon investments were $900 billion in 2020, but they’ll need to rise to $5 trillion by 2030 , according to the International Monetary Fund. With sums like those, it’s shaping up to be a founders’ market.
by tyler | Feb 21, 2024 | Tech
Varaha has attacted investor interest as an end-to-end developer for carbon credits that it generates by working with thousands of smallholder farmers yielding crops on a total land of over 700,000 acres across India, Bangladesh, Nepal, and Kenya.
The voluntary carbon offset market will reach $250 billion by 2050 from $2 billion in 2020, according to estimates made by Morgan Stanley. However, awareness of the monetary and environmental benefits associated with carbon credits is low.
Generally speaking, carbon offsets are granted when an organization or company engages in a practice that reduces CO2 emissions, such as replacing fossil-fuel-based energy sources with renewable energy sources, or (rarely) removes CO2 from the atmosphere through technology like carbon capture. Polluters then purchase these offsets to counter the CO2 they’re emitting, which lets them claim to be reducing their emissions or heading toward “net zero” carbon emissions. This has become increasingly important as awareness of CO2’s role in global warming has grown among the public and among public-company investors, and as governments have begun to face political pressure to cut CO2 emissions.
But not all carbon offsets are created equal, and the market is largely unregulated. There have also been highly publicized instances of carbon credits being granted for projects that did little to reduce emissions, leading to more uncertainty and downward price pressure in the market.
Big entities in the space find it hard to work at the grassroots level. Some large-scale carbon credit companies prefer working on renewable energy projects, including shifting to EVs or installing solar panels to generate electricity, as they require less resources and effort to measure and monitor carbon emissions. Similarly, industry giants in various sectors such as automobile, chemicals, and pharmaceuticals have been generating nature-based carbon credits natively, which leads to conflicts and criticism against their offsets.
Enter Varaha.
After spending 17 years academically and professionally with farmers in India, agricultural engineer Madhur Jain co-founded Varaha in 2022 along with Ankita Garg (COO) and Vishal Kuchanur (CTO). Years before starting Varaha, Jain, while working with the Nobel Prize Laureate Michael Kramer at the social enterprise Precision Agriculture for Development as its country director for India, realized the need to incentivize farmers to limit crop residue burning, which contributes to a smog blanket during winters . It was early, as no methodologies were available at the time to create carbon credits from agriculture. However, the 34-year-old entrepreneur decided to start his venture once the methodologies started appearing in developed markets, including the U.S. and Europe.
Varaha now works with over 100 partners across all the geographies it presents to onboard smallholder farmers to help them follow sustainable and regenerative farming practices that result in quantifying emission reduction and soil organic carbon sequestration. This leads to the creation of nature-based carbon credits, which the startup sells to companies — mainly in Europe.
The startup has developed its measurement, reporting and verification (MRV) platform that uses a mix of remote sensing, machine learning and scientific research to quantify the sequestration (safely separating and storing harmful substances including carbon dioxide) and limit greenhouse gases from regenerative agriculture, afforestation and biochar projects. Consequently, these projects help farmers enhance their productivity, boost crop yields, save water, increase biodiversity, and improve climate adaptation.
Typically, farmers follow certain practices that eventually lead to carbon emissions. For instance, when farmers flood their farms to grow rice, Jain explained, the contact between the soil and the environment breaks due to the water layer and generates methane-emitting bacteria. This is so potent that 2% of the total global emissions today is rice methane emission, he said. Farmers can reduce that impact by limiting the use of water.
In such cases, the nature-based carbon credit approach helps generate more revenues and limits their contribution toward impacting the atmosphere.
Unlike nature-based credits, carbon credits from renewable energy projects are easy to measure and record and do not involve co-benefits to nature. Thus, Jain said they were priced anywhere between $0.5 to $4 — one-fifth to one-seventh the price of nature-based credits. However, selling carbon credits generated from nature, including agriculture, requires additional checks and balances and third-party audits.
Varaha co-founders Vishal Kuchanur, Ankita Garg, Madhur Jain (left to right) Image Credits: Varaha
Varaha co-founders Vishal Kuchanur, Ankita Garg, Madhur Jain (left to right) Image Credits: Varaha
“It’s basically like coming full circle in terms of identifying a problem much before and then now finding a solution and building towards that,” Jain told TechCrunch in an interview.
Now, the company has raised $8.7 million in an investment round led by RTP Global as the two-year-old startup strives to expand access to carbon credits for smallholder farmers and enter new markets in the next couple of years.
The fresh funding comes amid an ongoing market slowdown that has significantly impacted startups in emerging markets including India and restricted investors from taking different bets.
Varaha works with the NGO Verra, which runs a significant carbon crediting program, to get its data and measurement practices audited before generating credits. Jain told TechCrunch the startup went through the audit process last year, which took seven-and-a-half months.
For agricultural projects, the process also requires impaneled scientists to be deployed to go through the available data models and validate them to determine whether they are suitable for the regional conditions.
That said, the rigorous oversight helps bring high-quality carbon credits that can be sold globally.
Farmers get 60–65% of the carbon credit sales value, while Varaha takes a cut between 20–25%, depending on the category of the carbon credit, and 10–15% goes to its partners.
Varaha said it had already contracted and sold more than 230,000 carbon credits across a range of project portfolios and counted Klimate in Denmark, Good Carbon in Germany, and Carbon Future in Switzerland, among its key customers. It has also received interest from financial institutions and tech companies across the U.S. and U.K.
When asked why Varaha has no Indian customers for the credits it creates even though India is one of the largest carbon emitters, Jain told TechCrunch consumer behavior is pushing companies in Europe and the U.S. to reduce their carbon emissions voluntarily. “There is no parallel you can draw between India and the developed markets… there is a massive fragmentation on the ground. The piece of land for farmers is much smaller, and the farmer’s income is much smaller. So, you have to understand the underlying piece of the infrastructural challenge,” she said.
Nonetheless, the startup does see some interest coming from India, too.
“We expect that in the next six to nine months, we will have some active conversations,” he stated. “The willingness to pay a premium exists mostly in the Western world today; hence, that has been our major focus. But we do see that shifting in the next four to five years and coming towards India as well.”
Varaha plans to use its fresh fundraising to enter five to six countries in the next 12 to 18 months and has already chalked out eight to 10 markets across South Asia, Southeast Asia and East Africa. Some of these markets will be Vietnam, Thailand, Zambia and Tanzania, Jain said.
The startup also looks to hire more people in its team of 51 full-time employees to enhance its tech and science, where half of its workforce is focused, and build a sales team across the U.S. and U.K.
“We are also looking at other innovative carbon capture solutions at the farm level,” Jain said. “So piloting these solutions and building them out is another key area to focus upon for this fundraiser.”
Jain’s experience in the domain and his grounded approach convinced RTP Global to lead the Series A round — after putting a small angel ticket in its seed round in 2022.
“We watched what he is able to deliver through a year and were very impressed with the result,” RTP Global partner Galina Chifina told TechCrunch. “The team has made quite a few calls with the farmers… saw what happens on the ground, not just in the boardrooms.”
Varaha’s Series A round also saw participation from the startup’s existing investors, Omnivore and Orios Venture Partners, as well as the inaugural investment by Japan’s institutional investor Norinchukin Bank in an Indian startup. It also included investments from AgFunder and IMC Pan Asia Alliance Group’s arm, Octave Wellbeing Economy Fund. The new round brings the startup’s total funding to $12.7 million, including the $4 million seed investment from late 2022.
