by tyler | Feb 14, 2024 | Tech
Spatial computing, climate tech and applications of AI technology join the newly announced list of startup incubator Y Combinator’s newest request for startups, announced on Wednesday. In a blog post penned by YC Managing Director Dalton Caldwell, the organization put out a call for the types of startups it wants to now fund, in the latest update of its RFS — or “Request for Startups” tradition, which began back in 2009.
The firm hasn’t updated its Request for Startups list since 2018 . However, it did seek out startups that could impact the trajectory of COVID-19 amid the pandemic and asked for certain types of startups as one-offs, such as its call for government 2.0 startups in 2019 and demand for more climate tech in 2022.
Climate tech made the new list as well. And although COVID-19 was no longer a focus, healthcare still is with requests for startups focused on a way to end cancer , foundational models for biological systems , the managed service organization model for healthcare and eliminating the middlemen in healthcare .
Not surprisingly, AI technology was mentioned several times throughout the new list, too, including in areas like machine learning (ML applied to robotics, ML to simulate the physical world), “ explainable AI ,” small fined-tuned models , LLMs (large language models) for manual back office process in legacy enterprises and AI to build enterprise software . Better “enterprise glue,” was added, as well, along with new enterprise resource planning software , or ERPs.
Other candidates of interest include defense technology , new space companies and startups focused on bringing manufacturing back to the U.S .
Apple’s launch of the Vision Pro has YC hedging its bets that “ spatial computing ” may deserve some attention, too — that is, startups building for the mixed reality environment that AR/VR headsets like the Vision Pro and Meta Quest 3 have introduced.
Digital currencies and crypto technologies largely did not make the new list, beyond one request for stablecoin finance , which refers to digital currencies pegged to a fiat currency, like the U.S. dollar.
While YC will accept other startups that don’t fit any of these categories, the RFS can help entrepreneurs narrow their focus on areas that are likely to gain attention from investors and receive funding.
“The world is full of founders with expertise that could be tapped into something new and great; our hope is that this list inspires some of those people to do so — or if they’re already building, to apply to YC,” wrote Dalton.
Applications for YC’s Summer 2024 batch are now open and the deadline for early admisssion is February 20, the organization notes. The deadline for other applications is April 22.
by tyler | Jan 22, 2024 | Tech
Much of the intriguing climate tech that crosses our desks is theoretical or only just coming to market — think: tech that sucks carbon out of the sky, emerging lithium-ion battery alternatives and bio-plastics that’ve yet to seriously scale. These aren’t the sorts of things ArcTern wants to fund, managing partner Murray McCaig told TechCrunch.
The Toronto-based venture firm just announced the close of a $335 million fund (USD) — its third and largest to date. ArcTern plans to pump this capital into climate-focused startups that can deliver super quick returns.
“If you’re not making money, you’re not having impact,” McCaig told TechCrunch. “You might in the future at some point,” the VC conceded, in a nod to firms like Bill Gates’ Breakthrough Ventures, which makes longer-term bets on emerging tech. However, McCaig said ArcTern is aiming for “impact that happens over the next 10 years, because the next decade is the most critical time for decreasing our global carbon emissions.”
The investor appears to be referencing the Intergovernmental Panel on Climate Change here. The UN environmental group has said nations must halve greenhouse gas emissions by the end of the decade to limit warming to a global average of 1.5 degrees celsius. Sticking to that target may help humanity avoid the most disastrous climate scenarios, but really that warming figure should be as low as possible, as soon as possible .
In any case, ArcTern has drawn a line in the proverbial sand. The investment firm is focused on startups that utilize proven tech in new ways, while researchers and investors with longer-term appetites focus on stuff that’ll take a while to potentially pan out. Of course, there are plenty of ways to decrease emissions that typically have little to do with startup profits, such as reducing air travel and improving public transit.
Materially, one of the areas ArcTern is focused on is decarbonizing mobility . Though electric vehicle sales have slowed lately, McCaig sees this as a “blip.” The VC believes North America is about to reach a tipping point where EV adoption takes off like a rocket, as it has in Norway .
ArcTern’s recent transportation bets include Seattle-based battery analytics company Recurrent . Another is Los Angeles-based battery-electric commercial vehicle maker Harbinger Motors . (Of course, not everyone will perceive the same tipping point in a given sector. Take, for example, hydrogen passenger vehicles; are they a pipe dream, or will we soon see hydrogen fueling stations popping up just around the corner ?)
Along with Toronto, ArcTern has teams in San Francisco and Oslo. “Climate tech tends to be fairly distributed around the globe, more so than AI and software, which tends to concentrate in California,” added McCaig.
Investors in ArcTern’s newest fund include TD Bank and Credit Suisse. The venture firm’s second fund clocked in at $150 million (USD), while its first — a seed fund — totaled $30 million.
by tyler | Jan 15, 2024 | Tech
Spend some time with people in the climate tech world and you’ll soon learn that a lot of them share something in common: They’re not used to having a lot of money.
That’s because for years, climate represented a cost for many businesses, not an opportunity. Fortunately, that’s started to change recently as investors have rushed into the space, seeking opportunities in “double-digit trillion-dollar markets” that are “largely decoupled from general tech investing,” Joshua Posamentier, managing partner at Congruent , told TechCrunch+.
Investment in climate tech has been gathering pace over the past five years or so. While the sector wasn’t entirely immune to the slowdown that gripped the rest of the startup world over the past couple of years, we did see signs of a rally in the third quarter.
This continued strength is due in part to both U.S. and European commitments to climate-forward industrial policies. Between the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law in the U.S. and the Green Deal in the EU, nearly $1 trillion in tax credits, grants, and other incentives are available for climate- and energy-related investments and purchases.
But that trillion-dollar forecast actually might be a conservative one. The IRA alone might yield more than that since many of the tax credits are uncapped; Goldman Sachs estimates the law’s climate provisions might pay out $1.2 trillion in incentives, spurring some $3 trillion in private investment.
That’s not enough to get the U.S. or the EU’s economy to net-zero carbon emissions (or to make up for historical emissions), but it’s a down payment so large it can be hard to keep track of it all.
In fact, climate tech today finds itself in the unusual position of being so awash in cash (relatively speaking) that there are a number of websites, apps and startups rushing to track it all and help companies and customers make the most of the incentives.
“Unfortunately, there’s no comprehensive database out there for all of these rebates and incentives,” said Thomas Stephens, co-founder of Upfront , a startup that’s cataloging incentives for merchants.
For companies, it’s a cost of doing business to gather and understand and integrate those incentives into their sales proposals, according to Tom Carden, head of engineering at Rewiring America , a nonprofit that advocates for the electrification of the economy.
by tyler | Jan 1, 2024 | Tech
One of the major stories that defined the tech sector in 2023 was layoffs . Companies large and small shed over 240,000 jobs in the last year, and while the trend has cooled of late, it hasn’t stopped, with nearly 7,000 jobs cut in November alone.
But there have been bright spots. Climate tech is one sector that has been hiring , and 2024 looks like it will be continuing the trend.
Clean energy jobs have grown 10% in the past two years, outpacing the economy as a whole, according to a report by industry group E2 . Through 2032, when the Inflation Reduction Act is set to expire, the fastest-growing job fields include wind turbine technician (45% growth) and solar photovoltaic installer (22% growth), according to the Bureau of Labor Statistics .
For startups, 2023 was more muddled. As investors closed their pocketbooks, founders had to make hard choices about how to extend their runways. Some had to resort to layoffs, but not everyone. Many founders I’ve spoken with continue to emphasize that they’re hiring for a variety of roles.
Deal Dive: Training the workforce for the clean energy transition
For those laid off from the general tech sector, climate tech would appear to be an appealing pivot, and for many, that’s proving to be true. Nearly every company needs software developers, project managers and designers. Is there a need for 240,000 of them? Probably not yet. And some that look like a close fit might require a bit of climate or energy knowledge on the part of the applicant.
In other words, there’s a skills gap.
by tyler | Dec 28, 2023 | Tech
Australia is a land of natural wonders, from the Great Barrier Reef and Daintree Rainforest to Kakadu National Park and the Blue Mountains. But because of the country’s naturally dry and biodiverse climate, it’s particularly vulnerable to extreme weather events that have been exacerbated by climate change. All of those wonders have been affected in recent years by bushfires, extreme heat waves, rising temperatures and floods.
Queensland is dealing with the worst flooding in history in the aftermath of Cyclone Ilsa. That’s on top of the aftermath of La Niña last year, which brought severe flooding and record-breaking rainfall to Eastern Australia. And before that, during the Black Summer of 2019 and 2020, the country lived through its most catastrophic bushfire that burned over 30,000 square kilometers of land and killed 3 billion animals. Add to this, around 90% of the Great Barrier Reef’s coral has been bleached white from rising sea temperatures.
Australia has experienced its fair share of a climate catastrophes, which has only fueled its climate tech startups into action.
The island continent is sparsely populated throughout most of its flat, dry, sunny center — referred to as the Red Centre — and has the perfect conditions to collect solar and wind energy. Large-scale solar and wind farms have spread across the country in recent years, causing renewable energy generation to increase from 16% in 2011 to 32% in 2022. Australia’s government has set a target of getting its grid to 82% renewable by 2030.
“Now there’s this perfect confluence of environmental issues, policy support and technological readiness that makes climate tech, particularly coming out of Australia, well positioned to really hit the next level of scale over the next five years,” said Jack Curtis, chief commercial officer at Neara .
But lack of capital needed to get startups to a scale-up phase could block access to Aussie innovation — an issue that is making itself known across the startup sector.
Neara works with utilities companies worldwide. It recently raised another USD$24 million to help its customers — like Southern California Edison — future-proof their infrastructure by creating 3D models to reflect and simulate how utility assets behave in the real-world environment in scenarios like drought or flooding.
The hype for climate tech in Australia is real, as long as it can be sustained. Local VCs are most excited about the sector this year, with climate and cleantech dominating in funding and deal count in Q3 2023. Startups in that sector raised $116 million in the third quarter, an increase from the $60 million invested in the segment in Q2 and $40 million in Q1, according to Cut Through Venture data . [Note: Numbers are in AUD unless otherwise stated.]
It’s been an upward trend for the past couple of years. In 2022, climate tech in Australia raised $553 million in capital, compared to $338 million in 2021, according to a report from Climate Salad, a community of Australian climate tech stakeholders. The goal was to raise another $1.5 billion this year, but the sector has fallen short due to delayed and unsuccessful capital raises, according to company co-founder Mick Liubinskas.
“We have a large number of companies that are looking at a Q1 2024 raise and more capital from international investors,” he said.
Startup founders say securing big checks is their biggest hurdle, but it’s the most important one to mount if they want to scale and survive.
